The big risk in airlines' new fondness for add-on fees is that all the various zingers and surcharges could spark a backlash. That threat is now becoming real, but the backlash isn't coming from consumers -- it emanates from the United States Senate.
By now almost everyone has heard of Spirit Airlines' new plan to charge $45 for carry-on luggage in an effort to streamline the boarding process and relieve plane congestion. By their own account, Spirit is essentially banning carry-on luggage and steering passengers toward checked baggage or none at all.
"Bring less; pay less. It's simple," said Ken McKenzie, Spirit's chief operating officer, in a statement announcing the fees.Unfortunately, seven Democratic senators have decided that charging for carry-on luggage is practically un-American, and they have unveiled new legislation aimed at airlines and baggage fees. Sen. Charles Schumer (D-NY) and four other senators penned the Block Airlines' Gratuitous Fees Act, or BAG Fees Act, which will tighten up a loophole that lets airlines pay no tax on nonessential fees like bag surcharges. The tax itself isn't crippling; it's only 7.5%, less than what most people pay in sales tax.
The other legislation introduced Tuesday was the Free of Fees for Carry-On Act, a bill that would prohibit fees for carry-on luggage and make airlines publicize detailed information about fees to customers upfront. Essentially, the act would make those passengers who routinely gatecheck for free pay up. How is that helping consumers exactly?
A gatecheck, where a passenger brings on a too large carry-on bag and it is checked by a flight attendant usually for free, is the only time a consumer actually gets past all the baggage fees. The gatecheck is now used routinely by some who knowingly bring on oversized luggage. Is it gaming the system? Of course! But that's what happens when airline bosses assume paying $25 to $50 for a checked bag is perfectly fine.
The new legislation, despite all the hollering and simulated outrage, does nothing but look out for the interests of the airlines or the government itself. The Free of Fees act actually enforces a fee where one didn't exist before. The BAG Act only fills the coffers of the federal government -- although it's a pretty anemic fee that won't even dent the millions of dollars in revenue such fees already generate. None of the legislation enacts any punitive fees or provides meaningful consumer protection.
So now we have senators spending hours telling TV cameras how much they hate having unfair fees heaped onto poor, average Americans. It's unlikely their efforts will do much to actually alleviate the burden, but it may also foreshadow the kind of regulatory friction airlines could generate by continuing down their current, fee-laden path.