Update: US Aviation Sub-committee Hearing on Airline Add-on Fees

(Dive Travel Business News - July 15, 2010) -- A report released Wednesday by the Government Accountability Office (GAO) indicates that the growing number of airline ancillary fees can be confusing and misleading to consumers and ought to come with better disclosures.

There have been many intended and unintended consequences of the unbundling fees from ticket prices. According to the GAO report:

• Airlines generated nearly $8 billion in revenues from baggage fees and reservation change and cancellation fees alone in the past two years;
• While that extra revenue helped boost the bottom lines of some cash-strapped airlines, it also made it much harder for consumers to comparison-shop for tickets, particularly on third-party travel sites;
• Since more travelers trying to avoid add-on fees are now carrying on more luggage, that has helped cause flight boarding delays, longer airport screening lines and other problems.
• And since airlines don't have to pay excise taxes on the baggage and other fees they rake in like they do with the money they get from airfare, the government has missed out on $186 million in taxes that could have been used for airport improvements.

U.S. Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee warned airlines that Congress will act if they don't slow down on the fee front.

"I just want to say to the airlines ... if they don't exercise restraint, there's going to be a continuing outcry from the traveling public," Oberstar said. "And then you're going to have some kind of regulation that you won't like."

The Department Of Transportation recently announced it is considering new rules that would require airlines to fully disclose all fees; prohibit airlines from advertising fares that don't include all mandatory fees, taxes and charges; and make it easier for consumers to compare full ticket prices between airlines.

"We believe the proliferation of these fees and the manner they're presented to the traveling public can be confusing and in some cases, misleading," DOT general counsel Robert Rivkin told members of the House panel.

The DOT plans to announce any rule changes by the end of the year.

U.S. Rep. Jerry Costello (D-Ill.), who chairs the aviation subcommittee hearing, indicated that if the DOT doesn't do something to help make airline fees more transparent for consumers, Congress would.

"I frankly do not believe that we're going to get where we need to be if we don't do this through rule making or by taking action through Congress," he said.

See also; US Hearing on Hidden Fees Starts Today.

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