Airlines are the epitome of the “junk fees” practices that draw the ire of consumers nationwide, prompting a comprehensive federal regulatory response. Many amenities and services that used to be standard during a flight now cost a fee, and they add up quickly. In 2021, airlines earned nearly $5.3 billion in baggage fees and $7 million in cancellation and change fees alone. These staggering figures are drained from the pockets of consumers, often through a pernicious tactic called “drip pricing.” Airlines bait consumers by advertising a low-ticket fare, then as the consumer spends the time and energy to input their information and click through each page, more and more fees are added on. This deceptive conduct hides the true cost of the transaction, making comparison shopping almost impossible.
Ironically, air travel is one of the few industries that is required to provide up-front information to consumers about mandatory fees through the Full Fare Advertising Rule, adopted in 2011. This rule, however, does not require airlines to provide this same kind of up-front information about “ancillary” or optional fees. Over the years, airlines have created a system that requires payment of a fee for things that many consumers use whenever they travel but because they are considered “ancillary,” airlines are not required to disclose them in the same way. Hiding fees through a drip pricing model makes it almost impossible to comparison shop for airline tickets.
The Department of Transportation (DOT), airlines’ sole regulator, has recognized the reality that many consumers purchase these ancillary services and pay additional fees. It has proposed a rule to expand these fee disclosure requirements for airlines and bring much needed transparency to the sale of airline tickets. If adopted, airlines would be required to disclose more fees earlier in the purchase process. Importantly, the DOT’s proposal would not prohibit airlines from charging any particular type of fee, but instead focuses on ensuring that airlines are more up-front with consumers about how much their air travel will cost. Here are some basic facts about the rule proposal:
Who would have to disclose the fees? Any entity that advertises or sells tickets to consumers in the U.S. (including domestic foreign airlines, ticket agents, and corporate and online travel agencies).
What new fees would have to be disclosed?
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- Baggage fees, including fees for first, second and checked bags;
- Change and cancellation fees;
- A statement about whether the consumer can receive a refund if they cancel the purchase within 24 hours; and
- Family seating fees, including whether the airline charges extra for a passenger to sit next to their child(ren) under the age of 13.
How would fees have to be disclosed? Fees would have to be available “on the first page when a consumer conducts a search,” instead of hidden through links to other pages. They would also need to be provided to consumers who purchase on the phone or in person.
What happens if they are not disclosed? The DOT has stated that the failure to comply with these provisions would be an unfair and deceptive practice, and the seller would be required to refund the fee and possibly be subject to enforcement action by the DOT.
This would be a welcome change for air travel consumers but may not do enough to effect meaningful change. Here are additional steps we would like to see the DOT undertake relating to air travel fees:
- Enforce existing rules. Adopting expanded rules is good progress, but unless the rules are enforced, they become meaningless and ineffective. The DOT has brought very few enforcement actions against airlines in the past decade.
- Prohibit family seating fees. Families should be able to sit together without paying a fee. This is a quintessential junk fee.
- Require disclosure of all seat reservation fees, not just family seating.
- Subject large revenue-generating fees to transparency requirements. Airlines are already required to submit fee data to the DOT, and these statistics should likewise be routinely reviewed.
Here is a link to the DOT’s Enhancing Transparency of Ancillary Airline Fees notice of proposed rulemaking. The comment deadline has passed, but the DOT has indicated that it will accept late comments and may reopen the comment period.