In a recent report unveiled by US Senator Richard Blumenthal, Chair of the US Senate Permanent Subcommittee on Investigations (PSI), it was revealed how major US airlines are boosting profits by utilizing additional fees, often dubbed as “junk” fees, which ultimately lead to higher costs for travelers. This strategic use of algorithms to set fees, combined with targeted pricing based on customer data, has enabled airlines to frequently adjust their prices, particularly when it comes to seat fees.

Blumenthal expressed concerns about tactics like dynamic pricing that not only burden travelers but also significantly boost airline revenue. The upcoming Senate hearing on December 4th will provide an opportunity for airlines to justify these practices before the Subcommittee on Investigations.

The report shed light on the practices of major airlines such as American Airlines, Delta Air Lines, United Airlines, and ultra-low-cost carriers Frontier Airlines and Spirit Airlines. It was revealed that Frontier and Spirit paid substantial amounts to gate agents and staff to enforce bag policies, often resulting in passengers being charged extra fees or missing their flights.

Moreover, the report highlighted a significant increase in revenue from seat fees across all five airlines during the period of study. The total revenue generated from seat fees between 2018 and 2023 amounted to a staggering $12.4 billion collectively for the five airlines. Interestingly, the fees charged were not directly correlated to the costs of services like checked baggage transport or advance seat assignments.

Furthermore, it was discovered that Frontier, Spirit, and United possibly skirted federal transportation excise taxes by categorizing certain charges as non-taxable fees. This maneuver allowed them to avoid paying the 7.5% tax imposed on passenger air travel by labeling specific services as “optional”.

The forthcoming Senate hearing will feature executives from these major US airlines and provide a platform for deeper scrutiny into their pricing strategies. Stay tuned for updates on this critical investigation into airline fee practices.