Airlines redesigned the way you choose your seat—and raked in $12.4 billion in the process
Want extra legroom on your flight? There’s a fee for that. Care for a window or aisle seat? Pay up. There once was a time when airlines didn’t charge extra for certain seats, but over the past two decades, so-called ancillary fees have become a regular—and costly—part of modern air travel. In fact, they’ve been designed right into the buying process. And soon, airline executives will answer for that. A new Senate report released this month found that from 2018 to 2023, five major and low-cost airlines brought in $12.4 billion in revenue from seat fees. In part, investigators blame rising fees on tactics like dynamic pricing and “dark patterns” meant to deceive customers and boost the airlines’ bottom line. Such tactics have created a windfall for an industry that’s already recorded record profits this year. The blame lies in part on the user experience of the airline ticketing interfaces themselves. “Airline websites and mobile applications bury critical information, such as the cost of selecting a particular seat, at later stages of the booking process,” the report reads. “At some airlines, proprietary algorithms use consumer data to help set the price of fees so that different people attempting to book the exact same flight at the exact same time may be charged different prices for checking a bag.” Airlines’ great unbundling It’s part of a larger unbundling strategy in the industry that’s designed to charge customers separately for goods and services, according to the report. Consumers once knew the seat they’d have for an up-front fee, but would-be travelers now have to navigate a veritable maze of add-ons, seat maps with varying prices, and luggage charts before clicking “pay.” Now executives from the investigated airlines—American, Delta, United, Spirit, and Frontier—have been called to testify on the seat fees before the Senate Permanent Subcommittee on December 4. Early ancillary fees can be traced to Spirit Airlines, the low-fare carrier that lowered ticket prices in 2006 and charged for everything else. After the start of the Great Recession, other airlines followed Spirit’s lead, with American, Delta, and United introducing a $15 first-checked-bag fee in 2008. More fees followed. Today American, Delta, and United charge $35 to $40 to check your first bag, while carry-on bags, advanced seat assignments, and Wi-Fi all cost extra. Turns out it’s pretty complicated to fly basic economy (which is itself a new tier to navigate). Meanwhile, airlines are investing more in luxury experiences that come with premium price tags. On Tuesday British Airways announced major improvements to its first-class seating inspired by luxury hotels. Delta is upgrading its seats and opened a luxury lounge at New York’s John F. Kennedy International Airport. Even travel-size toiletries have gotten a luxury makeover for high-income travelers. In theory, the fees now under scrutiny began as a great deal for people who were willing to travel light and without any frills, but investigators found that consumers now face higher costs, increasingly complex fees, and few ways to avoid them. “Unbundling has not lowered the cost of flying for consumers, who now face additional charges to fly with carry-on or checked bags or to sit next to their minor children,” the report’s authors wrote. These costs are only expected to rise without any “meaningful limitation,” according to investigators, who found ancillary fees are “unconnected to the actual cost of providing the service they cover.” The report, which follows new Department of Transportation rules about fee disclosures announced this year, recommends that Congress require airlines to provide more granular fee data and strengthen fee disclosure, and calls for further investigation into potential abuses and whether current airline ancillary fee practices comply with transportation tax law.
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Want extra legroom on your flight? There’s a fee for that. Care for a window or aisle seat? Pay up. There once was a time when airlines didn’t charge extra for certain seats, but over the past two decades, so-called ancillary fees have become a regular—and costly—part of modern air travel. In fact, they’ve been designed right into the buying process. And soon, airline executives will answer for that.
A new Senate report released this month found that from 2018 to 2023, five major and low-cost airlines brought in $12.4 billion in revenue from seat fees. In part, investigators blame rising fees on tactics like dynamic pricing and “dark patterns” meant to deceive customers and boost the airlines’ bottom line. Such tactics have created a windfall for an industry that’s already recorded record profits this year.
The blame lies in part on the user experience of the airline ticketing interfaces themselves. “Airline websites and mobile applications bury critical information, such as the cost of selecting a particular seat, at later stages of the booking process,” the report reads. “At some airlines, proprietary algorithms use consumer data to help set the price of fees so that different people attempting to book the exact same flight at the exact same time may be charged different prices for checking a bag.”
Airlines’ great unbundling
It’s part of a larger unbundling strategy in the industry that’s designed to charge customers separately for goods and services, according to the report. Consumers once knew the seat they’d have for an up-front fee, but would-be travelers now have to navigate a veritable maze of add-ons, seat maps with varying prices, and luggage charts before clicking “pay.”
Now executives from the investigated airlines—American, Delta, United, Spirit, and Frontier—have been called to testify on the seat fees before the Senate Permanent Subcommittee on December 4.
Early ancillary fees can be traced to Spirit Airlines, the low-fare carrier that lowered ticket prices in 2006 and charged for everything else. After the start of the Great Recession, other airlines followed Spirit’s lead, with American, Delta, and United introducing a $15 first-checked-bag fee in 2008. More fees followed.
Today American, Delta, and United charge $35 to $40 to check your first bag, while carry-on bags, advanced seat assignments, and Wi-Fi all cost extra. Turns out it’s pretty complicated to fly basic economy (which is itself a new tier to navigate).
Meanwhile, airlines are investing more in luxury experiences that come with premium price tags. On Tuesday British Airways announced major improvements to its first-class seating inspired by luxury hotels. Delta is upgrading its seats and opened a luxury lounge at New York’s John F. Kennedy International Airport. Even travel-size toiletries have gotten a luxury makeover for high-income travelers.
In theory, the fees now under scrutiny began as a great deal for people who were willing to travel light and without any frills, but investigators found that consumers now face higher costs, increasingly complex fees, and few ways to avoid them.
“Unbundling has not lowered the cost of flying for consumers, who now face additional charges to fly with carry-on or checked bags or to sit next to their minor children,” the report’s authors wrote. These costs are only expected to rise without any “meaningful limitation,” according to investigators, who found ancillary fees are “unconnected to the actual cost of providing the service they cover.”
The report, which follows new Department of Transportation rules about fee disclosures announced this year, recommends that Congress require airlines to provide more granular fee data and strengthen fee disclosure, and calls for further investigation into potential abuses and whether current airline ancillary fee practices comply with transportation tax law.
