Vis­i­bil­ity of fees for bags, ser­vices not good enough, U.S. agency says

Austin American-Statesman - - BUSINESS & PERSONAL FINANCE - By Joan Lowy

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.

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