Airline executives pushed back against claims of travel “junk” fees in a testy exchange with lawmakers. during a Senate hearing on Wednesday.
Members of the panel led by Democratic Sen. Richard Blumenthal accused airlines of charging obscure fees, exploring consumer-specific pricing, and even paying gate agents when they get passengers to check carry-ons at the gate.
“Travelers are quite simply fed up with hidden sky-high fees, and they are right to worry about the future,” said Blumenthal. “Our investigation found that airlines are exploring new ways to charge customized fees to each passenger using algorithms and maybe even AI.”
Executives from five airlines, including the main carriers, defended their business models throughout the hearing. American Airlines (AAL) said, for example, that it does not charge for carry-on or personal items and does not charge customers for sitting next to their children.
“If passengers do select an ancillary product, we clearly disclose any fees in advance of booking,” Steve Johnson, vice chair and chief strategy officer of American Airlines, told lawmakers at the hearing.
Low-cost carriers Spirit (SAVEQ) and Frontier (ULCC), which offer unbundled services, also pushed back against criticism over a-la-cart fees. “This transparent model enables Frontier to keep its base fares extremely low for the benefit of consumers,” said Robert Schroeter, Frontier’s senior vice president and chief commercial officer.
Frontier defended a practice called out by lawmakers that involved paying gate agents $10 each time they identify a passenger trying to board with a personal item that is too big and requires a fee.
“We recognize this is a tough job and, therefore, we incentivize them to do that,” Frontier’s Schroeter said.
In an exchange with a United Airlines (UAL) executive, Blumenthal criticized the air carrier for not providing current information on how much they make on all their checked bags.
“We look at our profitability very carefully by market, by flight, and by region, but we do not look at our profitably by baggage,” said Andrew Nocella, United executive vice president and chief commercial officer.
The executive went on to say it “costs a lot of money” to transport luggage, saying a new baggage system they put in Houston cost $360 million to install.
Sen. Blumenthal also criticized the executives for not pledging to drop a suit against the Department of Transportation‘s new rule requiring upfront disclosure of airline fees. The regulation was temporarily blocked by an appeals court over the summer.
