GAO study: Airlines fleecing customers with nickel-and-dime charges

New government data flies in the face of airline industry claims that it’s never been a better time to fly, the National Consumers League (NCL) said in a statement released on Sept. 22.

The report released by the U.S. Government Accountability Office (GAO), which is available here, examined the rapid growth in nickel-and-diming by the airline industry, which has piled billions of dollars of fees on the backs of the flying public.

Sally Greenberg
“The GAO report reflects many of the concerns that consumer groups like NCL have expressed about how the airlines are increasingly fleecing passengers via so-called ‘ancillary fees’,” Sally Greenberg, NCL Executive Director, said. “This new data contradicts the industry myth that ancillary fees make flying cheaper. The report exposes the truth about these fees -- that their explosive growth has created a massive profit center for the airlines.”

Highlights from the report include:
  • The growth of ancillary fees has created a giant tax break for airlines, depriving airports of much-needed revenue needed for maintenance and upgrades. For example, the GAO estimated that in 2016 the government lost out on $309 million in tax revenue thanks to baggage fees being exempted from taxation.
  • Airlines’ fee revenues increased in every reported category. From just two fee categories -- baggage fees and change/cancellation fees -- the airlines collected $7.1 billion 2016 alone, an increase of 13 percent since 2010.
  • Contrary to industry claims that fees help airlines provide a lower-cost service to the flying public, the GAO found that consumers who pay to check a bag pay more in total to fly than they did when a checked bag was included as part of the fare.
  • The study also identified glaring differences in airlines’ a la carte systems, which could leave many consumers frustrated and confused. Different airlines are offering “preferred seats” options but are providing different amenities in their packages. This creates a scenario where a consumer could purchase a preferred seat expecting additional legroom as they have come to expect on another airline, only to receive a seat with minimal leg room.
“The nickel-and-diming of passengers by the airline industry is a huge pain point for consumers,” John Breyault, NCL vice president of public policy, telecommunications and fraud, added. “Yet, the airlines want us to believe that these fees allow consumers to fly for less and that consumers don’t mind them. Those industry claims are mythology.”

To help even the playing field between passengers and airlines, the National Consumers League supports the FAIR Fees Act sponsored by Senator Ed Markey (D-MA) and Senator Richard Blumenthal (D-CT).

The legislation has received bipartisan support and is included in the Federal Aviation Administration’s reauthorization bill, which is pending in the U.S. Senate.

The FAIR Fees Act would require that fees for baggage, ticket changes, cancellations, and other services be justified by cost to the airlines. NCL believes that this common-sense consumer protection bill would help return sanity to air travel, help end the airlines’ massive tax breaks, and increase competition between the Big Four airlines at a time that they are seeking even greater levels of control over the nation’s air traffic control system.

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Photo provided by NCL 
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