Flyers Face Skyrocketing Airline Fees, Senate Report Finds

NEW YORK CITY – As area airports prepare for a record-breaking surge in holiday travel, a Senate investigation released on Tuesday has found that seat selection and baggage fees are soaring to record highs.

Conducted by the Senate Permanent Subcommittee on Investigations and Connecticut Senator Richard Blumenthal’s office, the investigation analyzed data from five major airlines: American, Delta, United, Frontier, and Spirit.

It found that between 2018 and 2023, these airlines took home $12.4 billion in seat fee revenue, collectively increasing revenue from seat fees by 50 percent during the same period, from $2 billion to $3 billion.

Baggage fees, by far the largest category of airline add-on charges, brought in a staggering $25.3 billion between 2018 and 2023. During this period, seat and bag fees brought in nearly $40 billion, an amount comparable to the GDP of Nepal or Estonia.

“Ancillary fees are no longer incidental–they’ve become a cornerstone of airline profitability,” the report states, highlighting the growing cost of seat upgrades, advanced selection options, and checked luggage.

Higher Costs – And Fewer Choices

For New Yorkers traveling through major hubs like John F. Kennedy, LaGuardia, and Newark Liberty International, bag and seat fees often pile on top of already high base fares.

Spirit Airlines’ maximum baggage fee surged to $99 for a carry-on in 2023, a fee which is charged to passengers at the gate (and not those who pay ahead of time). Frontier Airlines, meanwhile, charged up to $99 for a carry-on and $138 for checked luggage. And earlier this year, United Airlines began charging basic economy customers $65 to check a bag at the gate.

For standard economy baggage, Delta Airlines and American Airlines charge $35 and $40 respectively (American charges $35 if you pay online). United, too, charges $35 or $40 for standard economy baggage, depending on when and how a traveler pays.

In addition to baggage fees, seat selection costs have also risen sharply.

Spirit’s premium “Big Front Seat” saw a sixfold price increase between 2018 and 2023, soaring from $140 to $899. And United Airlines charged up to $319 for an extra-legroom seat last year, up from $256 in 2018.

Critically, the price of these fees is “not tied to the airline’s cost of providing the service,” which means that if you pay $50 to check a bag, that $50 doesn't necessarily reflect the real cost to the airline for handling your luggage (the fee might be much higher than what the airline spends).

American, for example, appears to charge much more for baggage than it costs the carrier to handle that baggage, the report found.

To set bag and seat fees, Frontier uses a service, Navitaire Dynamic Pricing, that “incorporates machine learning models into pricing algorithms designed to optimize revenue results.” At a committee hearing, a Frontier executive stated that the algorithm “engages in price experimentation, meaning that it periodically sets prices at different levels in order to determine the optimal fee that customers are willing to pay.” Spirit also contracts with Navitaire, executives said.

American, Delta, and United, on the other hand, said they “do not use dynamic pricing to set the price of ancillary fees.” That doesn’t necessarily positively impact the consumer experience, however, and in 2023, United had the largest possible potential variation in prices for extra legroom seats of the three legacy carriers, with prices for an extra legroom seat ranging from $19 to $319.

Per the report, approximately 68 percent of the U.S. air travel market is controlled by four carriers: American, Delta, United, and Southwest Airlines. Of these, only Southwest doesn't charge travelers for bags. The airline began charging for advance seat assignments this fall.

Families, Budget Flyers Hit Hardest

Families are often pressured to pay for seat assignments to ensure they sit together, particularly on budget airlines where unassigned seating is standard. Frontier and Spirit were singled out in the report for not showing seat selection prices until after customers enter personal details during the purchase process, a practice Spirit admitted was designed to increase ticket sales by reducing booking abandonment.

“Families with children face unfair choices when flying,” the report states, noting that only American and Frontier guarantee adjacent seating for families under federal guidelines.

Budget-conscious travelers are also disproportionately affected. Frontier and Spirit both rely on carry-on bag fees that are assessed at the gate if passengers’ items exceed size limits. Frontier, which incentivizes its gate agents with cash bonuses for enforcing baggage policies, reported a nearly 300 percent increase in complaints about baggage issues after implementing the incentive program.

In 2022 and 2023, Spirit and Frontier paid more than $26 million to incentivize gate agents and others to collect bag and other fees, according to the report.

A spokesperson for Frontier told Patch that the commission is "simply designed to incentivize our team members to ensure compliance with bag size requirements so that all customers are treated equally and fairly, including the majority who comply with the rules."

Soaring Fees Outpace Base Fares

Charges for carry-ons and extra legroom seats are sometimes higher than the airfare itself. In 2023, Spirit reported that 35 percent of its passengers paid more in add-ons than in ticket costs, up from 26 percent in 2018.

This means even a seemingly low-cost fare can balloon once baggage and seat fees are added. According to the Senate investigation, this trend has been exacerbated by airlines advertising artificially low base fares while shifting more of the total cost into non-taxable ancillary charges.

The report also highlighted how bundling strategies like United’s “Economy Plus” and Frontier’s “Business Bundle” allow airlines to repackage previously standard services – like seat selection or checked luggage – as optional add-ons. These practices, the report argues, make it harder for passengers to understand the total cost of their trip.

Calls for Accountability

The report calls for greater transparency in airline pricing and fee disclosure, and recommends that the Department of Transportation (DOT) require airlines to report detailed revenue data for ancillary fees, similar to current reporting for baggage charges. The report also urges Congress to pass laws mandating upfront disclosure of all fees during the booking process.

“Passengers should not have to enter personal information just to find out the true cost of their flight,” the report states.

The Department of the Treasury is urged to investigate whether airlines are complying with federal tax laws. Under these laws, ancillary fees are exempt from the 7.5 percent transportation tax if they bear a “reasonable relation” to the cost of providing the service. The Senate report, however, noted that none of the airlines examined could demonstrate that their fees align with this requirement.

"We apply excise taxes to all products and services that are not optional in accordance with [Internal Revenue Service] rules and regulations," a Frontier spokesperson said.

What It Means For Travelers

For New Yorkers flying out of the city’s airports, the Senate report's findings offer a sobering look at the state of air travel. With the December holiday season just around the corner, travelers should budget carefully and consider all potential add-ons before booking flights.

While federal regulations require airlines to display the full price of airfare, ancillary fees like seat selection and checked luggage remain murkier. Without additional rules, the report warns, passengers will continue to face hidden costs that erode the affordability of air travel.

A United representative had no comment on the report.

A spokesperson for Spirit issued the following statement:

Spirit Airlines has a long history of offering affordable, low-fare flights, which has made travel more accessible for the public. We are transparent about our products and pricing, our airport policies ensure Guests are treated fairly and equally, and we comply with all tax laws and regulations.

We respectfully disagree with numerous statements and conclusions contained in the report. With that in mind, we believe it's time to come together and discuss meaningful initiatives that would even the playing field between larger and smaller airlines to benefit all travelers, including those who rely on airlines like Spirit. We look forward to explaining our position at a scheduled hearing on Dec. 4.

Spirit recently filed for bankruptcy. CEO Ted Christie reportedly received a $3.8 million retention bonus a week before the Florida-based carrier filed for Chapter 11.

Frontier issued the following statement:

Frontier works every day to increase consumers’ access to affordable air travel and to ensure that it provides the best possible value to its customers. Our unbundled services model has democratized air travel, enabling millions of individuals, families, and small businesses who otherwise would not or could not afford to travel the opportunity to travel by air. It has also had the additional competitive effect for consumers of inducing other airlines, particularly non-[ultra-low cost carrier] airlines, to reduce their fares and to introduce new, lower-fare products into the marketplace.

A Delta spokesperson issued the following statement:

Delta looks forward to continued dialogue with the Subcommittee including appearing at next week’s hearing. For more than a year, Delta has voluntarily responded to the Subcommittee’s sweeping requests, including providing documents and information, responding to numerous rounds of requests and follow-ons, and providing a senior level employee and subject matter expert at the Subcommittee’s request for a lengthy interview to discuss ancillary fees. Next to safety, Delta’s number one priority is taking care of our people and our customers and includes our commitment to providing a choice of fare products that best meets our customers’ specific travel needs.

Patch has not yet heard back from American but we'll update this story when and if we do.

Hearing In December

On Dec. 4, the Senate Permanent Subcommittee on Investigations will hold a hearing, “The Sky’s the Limit–New Revelations About Airline Fees,” at which executives representing the five major airlines analyzed in the report will testify.

Have you had an experience at an NYC airport recently that you think Patch should know about? Email michael.mcdowell@patch.com.