ATLANTA — A Senate Subcommittee report found airlines have brought in more than $12 billion in fees from things that used to come with the price of a ticket.
These so-called “junk fees” were the focus of a 55-page report released on Tuesday.
The report found that these fees have become a vital revenue stream for Delta, United, American, Frontier, and Spirit Airlines over the last five years and have become a larger share of their revenue. All the while making it more difficult for consumers to compare the actual total price of flying between companies.
“In my view, the airlines are pushing the boundaries on what kind of price discrimination you can actually do,” Emory professor Ramnath Chellapa said.
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The business professor went through the report with us. The report found five major airlines collected more than 12 billion in fees from seat selection alone between 2018-2023. The fees could have consumers charged more for anything from extra legroom seats to the ability to book a seat ahead of time.
“They have unbundled a lot of the features from the ticket prices. So basically, they are charging you a bare minimum seat and literally charging of everything else,” Chellappa said
The report also found that the two low-cost airlines, Spirit and Frontier, participated in a program that gave bonuses to gate agents for every bag a passenger had to check at the gate (which would usually cost the consumer an additional fee).
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Additionally, the report found that some airlines had dynamically priced fees. That means the cost of seat selection or checking a bag could have varied based on what an algorithm thought someone would pay.
“Not only are these fees being tacked on, but how can we dynamically change the price of these fees”, Chellappa said.
The report found that in one case, the algorithm setting prices could vary from person to person. That means fees could vary from person to person even if they bought the exact flight at the exact same time.
The Senate Permanent Subcommittee on Investigations plans to hold a hearing with officials from American, Delta, United, Frontier, and Spirit next week.
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