By David Shepardson
WASHINGTON (Reuters) - A U.S. Senate panel on Tuesday criticized rising airline fees for seat assignments and luggage and will call air carrier executives to testify on Dec. 4.
Senator Richard Blumenthal, who chairs the Permanent Subcommittee on Investigations, will convene a hearing titled "The Sky’s the Limit -- New Revelations About Airline Fees" with senior executives from American Airlines (NASDAQ:AAL), United Airlines Delta Air Lines (NYSE:DAL) , Spirit Airlines (OTC:SAVEQ) and Frontier to testify.
Blumenthal's report disclosed the five airlines collectively earned $12.4 billion in revenue from seat fees between 2018 and 2023 and said last year for the first time United earned $1.3 billion in seat fees -- more than the $1.2 billion it earned from checked bag fees, the report said.
Blumenthal's panel spent a year investigating, finding carriers are increasingly using algorithms to set fees, targeting pricing based on customer information and said some carriers may be avoiding federal transportation excise taxes by labeling some charges as nontaxable fees.
His committee found ultra-low cost carriers Frontier and Spirit paid $26 million to gate agents and others between 2022 and 2023 to catch passengers allegedly not paying for bag fees or having oversized items.
Frontier personnel can earn as much as $10 for each bag a passenger is forced to check at the gate, the report said.
Frontier said: "the commission for 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." Spirit and United did not comment.
Airlines for America, a trade group, said the optional fees that customers can choose, adding average domestic round-trip fares, including fees, were 14% lower in 2023 real terms versus 2010.
Delta said it is committed to "providing a choice of fare products that best meets our customers’ specific travel needs."
Blumenthal said Congress should require airlines to provide more detailed fee disclosures. He said the USDOT should investigate potential abuses in incentive-based collection of fees.
Airlines sued to block USDOT's new rule on upfront disclosure of airline fees, while airline CEOs in 2018 successfully lobbied against bipartisan legislation to mandate "reasonable and proportional" baggage and change fees.