Are airlines swindling travelers? Senate committee thinks so.

A report released by the Senate commerce committee on Thursday says that the extra fees charged by airlines have no connection to the actual costs incurred by the companies and should be investigated by the Department of Transportation for being 'unfair or deceptive.' 

Jeff Roberson/AP/File
An American Airlines jet is pushed back from its gate at O'Hare International Airport Tuesday, June 16, 2015, in Chicago.

The government should stop airlines from charging extra or hidden fees for things liked checked baggage and seat reservations, according to a new Senate report.

The report, released by the Democratic staff of the Senate commerce committee on Thursday, says that the extra fees charged by airlines have no connection to the actual costs incurred by the companies and should be investigated by the Department of Transportation for being “unfair or deceptive”. Over the past decade, frequent travelers have grown accustomed, albeit begrudgingly, to paying extra for checked luggage or flight changes. But now the commerce committee says these customers are being misled and overcharged, and that officials should verify just how transparent airline pricing really is.

“The traveling public is being nickel-and-dimed to death,” Bill Nelson (D-Fla.), the panel’s top Democrat, said.  “What’s worse is that many flyers don’t learn about the actual cost of their travel until it’s too late.” 

For example, customers are often charged extra for checked baggage despite the fact that it costs airlines next to nothing to carry an extra piece of luggage, the report says.

"Many airlines charge a fee for a second checked bag that is substantially higher than the fee for the first checked bag, even though there appears to be no cost justification other than increased profit for doing so," the report details.

Another of the main concerns presented by the committee was regarding flight seating. The report detailed that consumers who purchase tickets online are often only shown seats that require additional fees, or are led to believe that it is necessary to reserve a seat for an extra fee prior to the day of the flight. Consequently, many consumers pay the extra fee without realizing that the airline would later assign them an available seat free of charge.

Moreover, the committee’s report found that travelers are often not provided with clear information regarding airline policy for flight cancellation or changes. In many cases, the cost of changing a flight can be equal to the original cost of the ticket, even if the change is made months in advance. Change and cancellation fees currently cost between $60 and $200 for domestic flights, and between $50 and $1,000 for international flights, Fortune reported.

The Senate committee report details numerous recommendations. For one, it suggests the government should require that airlines charge fees for checked baggage and carry-on baggage that have a clear connection between the costs incurred by the airline and the amount charged. Second, airlines should also provide better and earlier disclosure about ancillary fees to help consumers compare costs, and place clear disclosures that “preferred seat” charges are optional. Penalty charges for flight changes should be limited to an amount less than the original cost of the flight.

Mr. Nelson said he plans to press his colleagues to act on the report’s recommendations when the Senate begins its work on legislation reauthorizing the Federal Aviation Administration. 

A recent study by Idea Works Company revealed that airlines around the world raked in an extra $38 billion in extra fees in 2014, a 1,400 percent increase since 2007. In 2014, US airlines collected $3.53 billion in baggage fees and $2.98 billion in change and cancellation fees.

“The three largest airlines, Delta, United, and American, declined to provide the Senate committee with requested information regarding total revenues from the past three years for preferred seats, priority boarding, Wi-Fi passes, advanced seat selection, and trip insurance,” the report noted. 

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