Visibility of fees for bags, services not good enough, U.S. agency says
WASHINGTON — Finding the best deal on a flight has become a lot more difficult, thanks to hefty baggage and service fees that consumers often don’t know about until they show up at the airline counter, congressional investigators say.
Those fees are not part of the ticket price, meaning they can easily go unseen until it’s too late for the consumer to shop around. Amounting to billions of dollars for the airlines, the fees also are exempt from an excise tax, and some lawmakers want to reclaim that money for the Treasury.
Airlines, travel agents, online travel services and other ticket distribution channels should be required to disclose fees for checked baggage, changed reservations and other services in a clear and consistent manner, the Government Accountability Office said in a report released Wednesday.
Since 2007, many airlines have been charg-
ing for services that were traditionally included in the price of a ticket. That’s improved airline bottom lines in a tough economy but raised the ire of travelers who find themselves nickel-and-dimed into higher costs.
During the past budget year, 10 U.S. airlines collected $7.8 billion in such fees, congressional accountants say. The leader was Delta Air Lines, the world’s largest airline, with $1.6 billion.
The government charges a 7.5 percent excise tax on airline tickets to pay for the air traffic system. The IRS ruled last year that optional fees aren’t subject to the excise tax. The report says the government could have raised $186 million last year if checked bag fees alone had been taxed.
Airlines say fees benefit passengers because they allow airlines to keep ticket prices down and consumers pay only for services they use.
David Castelveter, a spokesman for the Air Transport Association, which represents major airlines, said airlines already disclose the fees consumers are most concerned about, like checked bag fees, on their websites. But Gerald Dillingham of the GAO told the hearing airline fees “are not very transparent.”
American, Continental, Delta, US Airways and United all charge $25 for the first checked bag and $35 for the second, according to the booking website Kayak. JetBlue charges $10 and up for additional legroom. AirTran charges $6 for passengers to get seat assignments in advance, and sells exit row seats for $20 extra.
The Transportation Department is considering requiring airlines to disclose two ticket prices to passengers: a “full fare” with all mandatory charges such as taxes, and “full fare-plus” with the extras.