Senators critical of U.S. airlines for raking in billions in so-called junk fees

Nov. 26 (UPI) -- A new Senate panel report highly critical of "junk fees" used by major airlines to charge passengers has lawmakers ready to question airline executives at a hearing in Washington, D.C., next month.

"Our investigation has exposed new details about airlines exploiting passengers with sky high junk fees," Sen. Richard Blumenthal, D-Conn., chair of the U.S. Senate's Permanent Subcommittee on Investigations, said Tuesday in a statement.

It discovered American, Delta, United, Frontier and Spirit had raked in an accumulated $12.4 billion in just seating fees alone from 2018 to 2023.

The Senate's PSI launched its investigation last year. It sought to extract information from the three major air carriers American Airlines, Delta Air Lines and United Airlines and the two budget-friendly carriers Frontier and Spirit Airlines.

Blumenthal says the report "pulls back the curtain" on business tactics used by the airlines like dynamic pricing that "burden travelers and boost airline revenue," he added.

It arrived as roughly 6 million Americans are prepping to travel this Thanksgiving holiday via plane.

The majority report revealed that major U.S. airlines increasingly have used ancillary fees -- more popularly known as "junk" fees -- in order to boost company revenue but which have resulted in higher costs and bad experiences for travelers.

According to the Senate report, Frontier workers have the option earn as much as $10 in commission for each bag a passenger is forced to check at the gate. It says Frontier and Spirit had paid out nearly $26 million to gate agents from 2022 and 2023 to catch passengers allegedly not following bag policies and often forced passengers to pay a bag fee or to miss a flight as a result.

In a statement, Frontier stated the commission structure for its gate agents is "simply designed to incentivize our team members to ensure compliance with bag size requirements so that all customers are treated equally and fairly, including the majority who comply with the rules," CNBC reported.

Spirit, however, claimed the airline is "transparent" about its products and pricing, adding that "our airport policies ensure guests are treated fairly and equally, and we comply with all tax laws and regulations."

The report suggests, among other things, the airlines have been leveraging "advanced technology" and specific customer data to set and constantly adjust prices which varied from customer to customer.

Federal law requires a 7.5% tax on what is charged to passengers for air transport, according to the panel, which some carriers had allegedly classified as "optional" in order to skirt a tax on the charge. It's said that Frontier, Spirit, and United may have avoided paying the federal transportation excise tax by labeling some items as "nontaxable."

But Airlines for America -- a trade group that represents the largest of America's air carriers -- pushed back on the Senate report, saying it serves as "just another holiday travel talking point."

"The report demonstrates a clear failure by the subcommittee to understand the value the highly competitive U.S. airline industry brings to customers and employees," the group stated. It argued that the Senate subcommittee failed to "recognize that under the one-size-fits-all pricing scheme that we had before deregulation, only the wealthiest Americans could fly."

The Biden administration took a number of steps over the last four years to successfully eliminate so-called "junk fees" on U.S. consumers.

"I know that some airline CEOs have expressed hopes that [Trump] administration will be less passenger-friendly and more corporate-friendly than [the Biden] administration," Transportation Secretary Pete Buttigieg said last week.

Meanwhile, top executives at American, Delta, United, Frontier and Spirit will be in the nation's capital to face lawmakers at the Permanent Subcommittee on Investigations' hearing on Dec. 4 inside the Dirksen Senate Office Building.

The outgoing transportation secretary had previously said the passenger protections put in place by Biden's administration "deservedly enjoy broad public, bipartisan support," Buttigieg added.

Blumenthal's office says the Connecticut Democrat will seek to have them to justify business practices during testimony at a hearing titled: "The Sky's the Limit -- New Revelations About Airline Fees."

"As we head into the Thanksgiving weekend," Blumenthal's statement added, "we regret that travelers will be charged millions of dollars in fees that have no basis in cost to the airlines but simply fatten their bottom lines."