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Hidden fees have airline passengers in a frenzy

Airlines are nickel-and-diming passengers, and now a coalition of three travel advocacy groups is fighting back.

A $25 fee to check a first bag. An in-flight snack for $5. Tired of all these airline fees? Well, you could take a nap on the plane, but you'll have to pay $7 or $8 for a pillow and blanket.

Airlines are nickel-and-diming passengers, and now a coalition of three travel advocacy groups is fighting back.

A new website unveiled earlier this week,, is designed to be a forum for travelers upset about unbundled airfares and unexpected fees. The site, which was developed by the Business Travel Coalition, American Society of Travel Agents and Consumer Travel Alliance, invites travelers to share stories about surprise fees and sign a petition protesting them.

The organized protest over hidden airline fees is the latest salvo in the battle over enhanced protections for air travelers — a battle that will loom increasingly large as the deadline for comments on the latest proposals from the Department of Transportation (DOT) approaches on Sept. 23.

“Airline passengers have rights and should be able to expect fair treatment when they fly,” said DOT spokesman Bill Mosely. “We want to raise the bar for airlines when it comes to treating passengers fairly.”

Big bucks and backdoor price increases
The DOT is looking to expand on the passenger protections laid out in last spring’s tarmac-delay rules. The agency is proposing, among other things, to require fair-price advertising, increase compensation for denied-boarding situations (i.e., involuntary bumps), expand tarmac-delay rules to cover small airports and international carriers and promote better disclosure of baggage fees and other ancillary charges.

Among the wide-ranging proposals, the ancillary-fee issue will almost certainly have the greatest impact on the greatest number of travelers. Last year, U.S. airlines took in $7.8 billion in ancillary revenues — $2.7 billion in baggage fees alone — and they’re on a pace to top that this year.

À la carte airline fees are also getting the attention of Congress, where Rep. James Oberstar (D-Minn.) has labeled them “backdoor price increases” because they apply to services and amenities that have traditionally been included in the cost of flying. More to the point, perhaps, the fees are exempt from the 7.5-percent excise tax that’s levied on each airline ticket sold.

The result, say opponents of the exemption, delivers billions of dollars in tax-free revenue to the airlines and a multimillion-dollar hit to the government programs that fund airport improvements — $186 million from baggage fees alone last year, according to the Government Accountability Office.

All of which is setting the stage for a battle that will likely affect far more fliers than last spring’s tarmac-delay rules. The issue is not the fees themselves — they’re here to stay — but rather, how they’re accounted for and, more important, how they’re disclosed.

Which is where things get sticky.

Tussling over transparency
Today, the bulk of airline tickets sold in the U.S. are split fairly evenly between airline websites and third-party vendors, such as Expedia, Kayak and retail travel agents. “On the airline sites, the fees aren’t always clearly displayed or easily discovered,” said Kevin Mitchell, chairman of the Business Travel Coalition. “The other 50 percent are totally in the dark because they don’t have any ancillary fee data at all.”

The problem, say the new website’s backers, is that the airlines are unwilling to share that ancillary data with the global distribution systems (GDSs) that power the vast majority of bookings, which, in turn, makes comparison shopping a challenge. “Comparing travel costs without fee transparency is like trying to read a book with half the pages missing,” said Paul Ruden, senior vice president for the American Society of Travel Agents.

Not so, counters David Castelveter, spokesman for the Air Transport Association, the airline-industry trade group: “Customers already have complete access to all of the à la carte, ancillary fees being charged by our members. If [third-party vendors] want to have the same access, they need to develop that technology and bear the cost of it.”

Meanwhile — and even as the GDSs have begun developing such technologies — the fight over fees promises to heat up as the public-comment deadline on DOT’s proposed rules approaches. In the coming weeks, industry representatives will likely file their own comments; Congress may consider legislation closing the excise-tax exemption, and transparency advocates will be busy organizing a Mad as Hell Day on Sept. 23.

Resolving the underlying dispute, of course, will have to wait until DOT publishes its final rule, which will likely happen sometime next spring. Given what’s at stake, and the fact that the department is currently proposing an effective date 180 days after that, it’s a safe bet that somebody’s going to be mad as hell for some time to come.