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Bill would limit airline fees

Targeting one of the most common gripes about airline travel, two U.S. senators have proposed legislation to limit airline baggage fees, change fees and other fees.

The clever name for this legislation: The Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act. It would prohibit airlines from imposing fees "that are not reasonable and proportional" to the cost of services. It would also direct the U.S. Department of Transportation to review other airline fees.

"Airlines should not be allowed to overcharge captive passengers just because they need to change their flight or have to check a couple of bags," said U.S. Sen. Edward Markey, D-Mass., who introduced the legislation with fellow Sen. Richard Blumenthal, D-Conn., in a written statement. "There is no justification for charging consumers a $200 fee to resell a $150 ticket that was cancelled well in advance."

"This measure will ground the soaring, gouging fees that contribute to airlines' record profits and passengers' rising pain," Blumenthal said in written statement, adding that "airlines are increasingly resorting to nickel and diming consumers with outrageous fees."

Airlines collected more than $5 billion in bag fees and change or cancellations fees in the first nine months of 2015.

Atlanta-based Delta Air Lines charges the most fees of any U.S. carrier, according to data from the U.S. Department of Transportation. In the first three quarters of the year, Delta charged $682.9 million in cancellation or change fees and $661.3 million in baggage fees.

A collection of consumer groups is behind the bill to limit the fees, including the National Consumers League, Consumers Union, U.S. Public Interest Group, Travelers United and Consumer Federation of America.

Though the bill may have little chance of becoming law, the legislation is expected to be filed as an amendment to a key Federal Aviation Administration reauthorization bill being taken up by the Senate Commerce committee on Wednesday.

Markey and Blumenthal say under their legislation, airlines would only be authorized to charge fees that cover the costs of baggage handlers, ticket agents, baggage processing "or anything that reasonable pertains to checking a bag." And for change fees or cancellations fees, airlines would be "authorized to charge fees that cover the cost of processing the new tickets and any potential loss of revenue due to the cancellations, noting that any loss of revenue may be minimal or even zero because the airline can resell the seat for a potentially higher fare."

But airline industry group Airlines for America called the bill "nothing more than an effort to reregulate an industry that was deregulated to the consumer benefit in 1978."

A4A said cancellation and change fees exist because airline seats are perishable and they help reduce "no-show" passengers and the need to overbook.

When a passenger changes a reservation, the airline considers its ability to sell the seat and the risk of losing revenue.

Passengers can also pay more to buy refundable  fares, A4A pointed out.

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About the Author

Business reporter Kelly Yamanouchi covers airlines and the airport.