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Congress considers cracking down on ‘soaring’ airline fees

March 13, 2016 at 3:52 PM EDT
Congress is considering regulating airline fees for reservation changes, checked luggage and leg room, under a bill introduced this week called the Forbidding Airlines from Imposing Ridiculous Fees Act. Bloomberg Media aviaiton and travel associate editor Justin Bachman joins Alison Stewart to discuss.
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ALISON STEWART: Congress is considering regulating one of the most unpopular aspects of flying: those airline fees for reservation changes, checked luggage, and even leg room.

A bill introduced this week is called, literally, the Forbidding Airlines from Imposing Ridiculous Act, or FAIR.

Joining me now from Dallas to discuss the issue and the proposed remedies is Bloomberg Media aviation and travel associate editor Justin Bachman.

Justin, who sponsored this legislation, why, and why now?

JUSTIN BACHMAN, Bloomberg Media: It’s from two senators in the Northeast, Ed Markey of Massachusetts and Richard Blumenthal from Connecticut.

And I think what they’re responding to is just sort of a growing chorus from the public, at least the public who is sitting at the back of the airplane, that things are getting a little tight and a little bit uncomfortable.

ALISON STEWART: What kind of fees are being targeted as egregious?

JUSTIN BACHMAN: This bill talks about the fees that airlines charge when you want to change a ticket, cancel your ticket, and also the fees that you get charged when you check a bag or two or three.

Most airlines, it’s up to 10. And when you get up to 10 bags, the fees can be pretty high.

ALISON STEWART: Can you give me an example how high these fees can go?

JUSTIN BACHMAN: Yes.

If you are flying internationally, and you wanted to change your ticket, and it’s a non-changeable ticket, non-refundable-type ticket, you are paying up to $200 for that change fee.

ALISON STEWART: And is that what really has people exercised?

JUSTIN BACHMAN: That’s probably the most egregious what can happen when it comes to fee revenues.

So, I think the change fee is really the one that a lot of people tell their folks in Congress, we don’t like this.

ALISON STEWART: How much are we talking about that airlines are making at this point on these kind of fees?

JUSTIN BACHMAN: It’s — altogether, it’s well over $5 billion a year from the industry.

And that’s a large amount of money that goes directly to the bottom line. So, fees have become a very critical aspect of, you know, airline profitability these days.

ALISON STEWART: If we pull out a little bit, this isn’t just about baggage fees necessarily. This is about regulation. Can you explain that a little bit more?

JUSTIN BACHMAN: Yes.

This — in 1978, Congress passed a bill to deregulate the airline industry, so that there was no government intervention in what fares should be, what routes would be, where airlines fly.

And now we’re really talking about an area where Congress would get involved and say, there are some rules on what you can charge and not charge the public for bags and ticket changes and that. So, this would be a really fairly substantial change that — you know, that — that imposes a pretty big hurdle for this bill to get forward.

ALISON STEWART: You’re writing about it. You said it was a long shot. Is that the reason?

JUSTIN BACHMAN: It’s a long shot, yes, because of the fact that Congress would get into pricing, and Congress really does not get into the business of pricing for companies.

ALISON STEWART: I have to imagine the airline industry is pushing back on this.

How so?

JUSTIN BACHMAN: They put out a statement that they don’t like this bill.

The question is, how far does it advance before they really need to push back? But if this goes anywhere, you will see a very concerted and a very strong effort from the airline industry.

ALISON STEWART: Justin Bachman from Bloomberg Media, thanks for sharing your reporting.

JUSTIN BACHMAN: Thanks.

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