United States airline executives are preparing to face a Senate subcommittee as they defend their practice of implementing seat surcharges. This comes after a report from the Senate Permanent Subcommittee on Investigations revealed that American, Delta, United, Spirit, and Frontier collectively earned a staggering $12.4 billion in seating fees between 2018 and 2023. The panel has accused the airline industry of imposing what they refer to as “junk” fees in order to rake in billions of dollars in revenue.
The report highlighted that seats with additional legroom, preferred locations towards the front of the aircraft, or window and aisle seats come with a higher cost attached to them. This practice has been heavily criticized by lawmakers and consumer advocacy groups who argue that these fees are unfair and burdensome for passengers. The Senate subcommittee has taken a keen interest in this issue, prompting airline executives to provide an explanation for their pricing strategies.
American’s chief strategy officer, Stephen Johnson, defended the airline’s seat selection products in written evidence submitted to the inquiry. Johnson emphasized that the seat selection fees are entirely voluntary and that they offer passengers the option to pay for seats in more desirable locations. This practice, according to Johnson, caters to customers who value the convenience of sitting in preferred spots on the aircraft.
In response to the growing scrutiny from the Biden administration and lawmakers, airline executives have emphasized their commitment to offering different levels of economy service and introducing add-on prices for seat selection and checked luggage. These additional charges were once included in the price of a ticket but have now become a significant source of revenue for airlines as they struggle to recover from the devastating impact of the COVID-19 pandemic.
The focus on generating revenue through premium seat offerings has become a key strategy for airlines looking to bolster their financial performance. Johnson explained that the cost associated with securing a seat in a different fare class or with extra legroom is reflective of the additional value provided to passengers. Similar information regarding potential bag and other fees is also transparently communicated to customers to ensure transparency in pricing.
Spirit and Frontier, two airlines known for pioneering the fee-based model in the U.S., have faced challenges in recent years. Spirit, in particular, filed for Chapter 11 bankruptcy in November following a series of setbacks, including a failed acquisition attempt and increased competition in the industry. Despite these challenges, airlines like Delta, United, Frontier, and Spirit remain committed to offering a range of services to passengers while exploring new ways to maximize revenue.
Delta, United, Frontier, and Spirit executives are scheduled to testify before the Senate subcommittee at a 10 a.m. ET session. This hearing presents an opportunity for airline executives to address concerns raised by lawmakers and provide insights into their pricing strategies and revenue-generating initiatives. As the debate over seat surcharges continues to unfold, the outcome of this hearing could have far-reaching implications for the future of the airline industry in the United States.
