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Airline executives questioned by Senate over rising ancillary fees

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Airline executives questioned by Senate over rising ancillary fees
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Christina Ly Credit cards writer | The Points Guy

Executives from five major U.S. airlines faced scrutiny in a Senate subcommittee hearing over rising add-on fees, which have led to passengers paying more than the base ticket price. The hearing included testimonies from leaders of American Airlines, Delta Air Lines, United Airlines, Frontier Airlines, and Spirit Airlines. These airlines defended their fee structures as transparent and beneficial for providing customers with more options.

Senator Richard Blumenthal expressed dissatisfaction with these fees, stating that travelers feel like "piggybanks to be shaken down." A report by the Senate Permanent Subcommittee on Investigations criticized airlines for obscuring the total cost of travel through additional fees.

Airlines argue that their pricing strategies offer more choices and lower prices. Stephen Johnson of American Airlines testified that not every passenger wants the same thing. Andrew Nocella of United Airlines stated that they provide "transparent, readily accessible pricing information."

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Lawmakers characterized ancillary fees as a profit-driven tactic. Senator Josh Hawley described flying as a "terrible experience." According to a report, American, Delta, United, Frontier, and Spirit generated $12.4 billion in seat fee revenue between 2018 and 2023.

Airlines for America defended the practice by stating that Americans can choose services they want to pay for. However, lawmakers criticized commissions paid to gate agents by some airlines when customers pay last-minute bag fees. Bobby Schroeter of Frontier argued that such programs enforce airline policies fairly.

Spirit has discontinued its commission practice according to Matt Klein. Lawmakers also criticized airlines' opposition to a Department of Transportation rule requiring clear disclosure of ancillary fees upfront.

The hearing also touched on concerns about airlines' relationships with banks through cobranded credit card programs. Senator Roger Marshall promoted his Credit Card Competition Act aimed at reducing swipe fees but faced criticism for potentially harming credit card rewards programs.

The future actions remain uncertain as lawmakers called for further investigations into airline tactics and clearer data on ancillary revenue collected by airlines.

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