Seat selection charges generated $12.4 billion in revenue for 5 carriers between 2018 and 2023

Airlines are increasingly using ancillary or “junk” fees to boost revenues, resulting in higher costs and negative experiences for travelers, according to a staff report from the U.S. Senate Permanent Subcommittee on Investigations. Sen. Richard Blumenthal, chair of the subcommittee, said, “Our investigation has exposed new details about airlines exploiting passengers with sky high junk fees.” This report, he said, “pulls back the curtain on tactics like dynamic pricing that burden travelers and boost airline revenue.”

This week (Dec. 4), the subcommittee will hold a hearing with executives from five major airlines (American Airlines, Delta Air Lines, United Airlines, Frontier Airlines and Spirit Airlines) to discuss the rise of these fees and their impact on consumers.  Among the subcommittee’s findings were:

• Frontier and Spirit paid $26 million to gate agents and other personnel between 2022 and 2023 to catch passengers allegedly not following airline bag policies, often forcing those passengers to pay a bag fee or miss their flight. Frontier personnel can earn as much as $10 for each bag a passenger is forced to check at the gate.
• Airlines leverage advanced technology and specific customer data to set and constantly adjust the prices they charge. This is particularly the case for seat fees, which can vary enormously from flight to flight and customer to customer.
• As seat fees have grown more expensive and farther-reaching, all five airlines saw seat fee revenue increase in the period studied. Previously undisclosed airline data provided to the subcommittee show that seat fees, which did not exist at most airlines 20 years ago, generated $12.4 billion in revenue for American, Delta, United, Frontier and Spirit collectively between 2018 and 2023.
• Each of the five airlines told the subcommittee that the amount of a given fee is not directly tied to the airline’s cost of providing the underlying service, such as transporting checked baggage and assigning seats in advance of a flight. In fact, when asked to provide the total cost or average cost per passenger incurred by the airline for providing several fee-based services, each of the five airlines told the subcommittee that, in the regular course of their business, they do not track or maintain cost information with sufficient granularity to know how much it costs to provide each underlying service.

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