WASHINGTON - The ancillary fee model or the extra fees and add-on costs, which has become a central part of the revenue stream for major US airlines, is neither fair nor transparent, states a new critical Senate report.
The report 'The Unfriendly Skies: Consumer Confusion Over Airline Fees' by the Office of Oversight and Investigations Minority Staff comes at a time of growing traveler frustration over airline fees, which have greatly expanded both in scope and price during last 10 years to include items like preferred seat reservations, bags and ticket changes.
According to one recent study, airlines around the world pocketed a record $38.1 billion in extra fees last year an increase of more than 1400 percent since 2007.
"The traveling public is being nickel-and-dimed to death," Sen. Bill Nelson (D-Fla.), the panel's top Democrat, says in a statement accompanying the study's findings. "What's worse is that many fliers don't learn about the actual cost of their travel until it's too late."
Nelson adds that he intends to "press his colleagues to act on the report's recommendations when the Senate begins its work on legislation reauthorizing the Federal Aviation Administration."
Among the recommendations of the Senate panel is that there has to be better and earlier disclosure of ancillary fees on the Department of Transportation's Aviation Consumer Protection website to better assist the flying consumers compare costs among airlines on charges like checked baggage and carry-on baggage fees, airline change fees and preferred seat charge to have a clear connection between the costs incurred by the airline and the fees charged.
Among the criticisms in the report is that there seems to be little if any connection between the price of a fee and the "service" for which the fee is being charged.
"For example, 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 says.
Similarly in the case of ticket change, the report feels the charge should be "a reasonable amount tied to lead time prior to departure and a maximum percentage of the original fare paid." Currently, in some instances, penalties for changing flight plans can double the cost of travel even when the change is made far in advance of the flight.
Among the other recommendations is that the airlines should "promptly refund fees for any bags that are delayed more than 6 hours on a domestic flight."
The review found that consumers generally did not receive prominent or clear flight change and cancellation fee disclosures when they purchased tickets from airline websites.
The report by the Department of Transportation and consumer watchdog groups concludes that the ancillary fees model "does not always result in fairness or transparency for the traveling public".
Objecting to some of the criticism and recommendations, Jean Medina, spokeswoman for the Airlines for America trade group, told The Associated Press, "It would be difficult to find an industry that is more transparent than airlines in their pricing.
"The fact that a record number of people are traveling this summer further demonstrates that customers always know what they are buying before they purchase."