WHAT’S THE PLAN FOR ‘JUNK FEES’?
Seeking efficiency sometimes leads to ‘unbundling’ charges
If you have ever booked flights only to see the price at checkout look much higher than the fare you originally picked, you’re not alone. With many airlines charging fees for extras such as seat selection, checked baggage and more – depending on the fare category you choose – the cost of air travel can end up being steeper than it appears at first glance. h President Joe Biden has pledged to take aim at those extra costs, which he calls “junk fees,” and renewed his pledge to crack down on them during his State of the Union address on Feb. 7. Here’s what travelers need to know about what those fees are and why airlines charge them:
What are airline ‘junk fees’?
“‘Junk fees’ (is) a delicious turn of phrase that encompasses a bunch of different types of fees that I think really irk people,” said Scott Keyes, founder of Going, formerly known as Scott’s Cheap Flights. While he said the phrasing is “a little bit of Rorschach test” for the types of extra charges that most annoy an individual traveler, in an air travel context, it could include costs like seat selection fees, which may not be clear to customers when they first see fares.
“I think one of the things that’s annoying for travelers is not just the feeling nickeled and dimed, but also the mental load of having to decipher, ‘What does my ticket actually include?’ ” he told USA TODAY.
Biden has specifically called airlines out for charging families to sit together, though Keyes said there are already ways around that. Even if travelers book a basic economy ticket, which does not typically include the option to choose seats in advance, he said most of the time airlines will assign families seats together.
If they don’t, travelers can always ask a ticket agent if they can do so, make that request to a gate agent, or even ask a fellow passenger to swap with you after you board.
“The airlines don’t necessarily want to highlight the ways that families can sit together because that would rob them of a potential revenue source, all those families today who are just going ahead and paying the money to reserve their seats because they don’t want to take the risk that they could be separated on the plane,” he said.
The ways fees manifest on a passenger’s bill differ from airline to airline – and even within airlines – Keyes said. Frontier Airlines, for instance, makes much of its per-passenger revenue from fees rather than airfare, while Southwest Airlines prides itself on having “basically no fees,” he said. Most others are somewhere between the two.
Why do airlines charge those fees?
For starters, having an initial “lower headline price” makes air travel look cheaper, Keyes said. Airfares are taxed differently than fees.
Plane tickets – and anything the ticket includes – are subject to a 7.5% excise tax, Keyes said, but that tax excludes optional fees. “So, in some ways, it’s quite a bit more efficient for airlines from a tax perspective to be unbundling,” he said.
Airlines have also gotten better at controlling costs over the past decade, and competition from budget airlines, which took a “much more unbundled approach,” prompted full-service carriers to offer a more bare-bones basic economy fare, he added.
What is administration doing?
The Department of Transportation proposed a rule late last year that would force airlines and online booking platforms to clearly disclose fees to travelers early in the booking process alongside fare and schedule information. The DOT previously added a similar rule requiring airlines to include all taxes in the first mention of a fare when advertised.
Beyond the DOT proposal for airlines, Biden also asked regulators to look at hotel, bank, credit card, ticket sales, and other common fees that are often not disclosed in the list price for a service.
“We’re making airlines show you the full ticket price upfront and refund your money if your flight is canceled or delayed,” Biden said during his State of the Union speech. “And we’ll prohibit airlines from charging up to $50 roundtrip for families just to sit together. Baggage fees are bad enough – they can’t just treat your child like a piece of luggage.”