On Wednesday, December 4th, 2024, lawmakers on Capitol Hill hosted a high-stakes hearing that saw airline executives receive extensive criticism, primarily relating to the use of excessive fees for early boarding, better seats, and additional perks that many believe should come standard in ticket prices. Senator Richard Blumenthal, a Democrat from Connecticut, was the chairman of this panel and was quick to point out in his reviews that new federal action may be necessary to combat these predatory fees.
Blumenthal also noted that he believes the government should evaluate whether both legacy airlines and low-cost carriers
should be fined for their use of these so-called “junk fees,” which he believes significantly raise prices for passengers. The senator also noted that these seating fees are pure profit for the airlines as there are virtually no costs associated with assigning a seat to a passenger. Despite these sky-high fees, however, passengers do not appear to be concerned, with passenger numbers continuing to hit record highs throughout 2024.
Blumenthal and other senators had strong language for airline executives
Blumenthal was not alone in expressing his displeasure, with Republican Senator Josh Hawley also questioning why carriers can still charge passengers different baggage fees, all of whom purchased tickets for the same flight, referring to the system as a “Russian roulette.” A report released by the Senate earlier this week revealed that over $12.4 billion in revenue was generated by carriers from these seat fees alone between 2018 and 2023. Blumenthal noted that his panel spent an entire year investigating the algorithms that airlines use to set these fees.
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According to BWHL, carriers are working to find customer-specific pricing schemes that attempt to charge passengers as much as possible for each seat selection. Blumenthal described the situation as follows:
“Airlines these days view their customers as little more than walking piggy banks to be shaken down for every possible dime.”
Airlines across the globe today are finding even more sophisticated ways to develop pricing algorithms. According to Reuters, Air France-KLM has recently announced a partnership with Google Cloud for this purpose.
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The airlines do have a defense for their actions
The meeting of the Permanent Subcommittee on Investigations, which Blumenthal chairs, welcomed executives from American Airlines, United Airlines, Delta Air Lines, Spirit Airlines, and Frontier Airlines on Wednesday. In their defense, these airlines have noted that fees are extremely transparent and that passengers should be well aware of the tickets that they have purchased.
Photo:Â christopheronglv | Shutterstock
Across the board, airlines have been quick to point out that their most restrictive ticket products (which come along with the highest fees) are designed to reach the most budget-conscious travelers. This allows them to provide options for every different kind of customer, making them pay only for exactly what they will need.
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There is certainly an argument to be made that the advent of these fees has allowed airlines to reduce airfares significantly. When indexed to inflation, Simple Flying found that average airfares in the United States have fallen sharply post-COVID, even during a period of high oil prices, high interest rates, and sky-high passenger demand.