Should The Gov’t Get Involved In Baggage Fees?

The airline industry is one of the most heavily regulated industries in the world, despite the Airline Deregulation Act of 1978 (Public Law 95-504).

 

 

Nearly every aspect of an airline’s operations are subject to regulation … but airlines are free to charge what they’d like for fares and services, provided they do not violate any anti-trust laws.  Passengers may not always like airline fees, but in a free market each airline is free to choose its own business model, although Senator Mary Landrieu (D-LA) would like to see the U.S. Federal Government step in and dictate what fees an airline can and cannot charge.

 

Sen. Landrieu has introduced the Basic Airline Standards to Improve Customer Satisfaction Act, also known as BASICS, to the U.S. Senate.  Sen. Landrieu’s BASICS Act would legally require airlines to allow passengers one checked bag and one carry on bag at no fee, stating, “Many airlines consider checking a bag not to be a right, but a privilege – and one with a hefty fee attached. The Airline Passenger BASICS Act will guarantee passengers one checked bag without the financial burden of paying a fee, or the headache of trying to fit everything into a carry-on.”

 

What Sen. Landrieu’s sentiments about airline baggage are missing is this … airline travel is not a right. There is no guaranteed right to airline travel … and we should probably have a guaranteed right to health care in the United States before a guaranteed right to airline travel.  People flying with airlines are free to choose an airline that does not charge for checked baggage, such as Southwest Airlines, or choose to avoid an airline that charges for carry on bags, such as Spirit Airlines.

 

Sen. Landrieu goes on to say, “Passengers have been nickeled and dimed for far too long and something has to be done about it. Air carriers should be required to provide a minimum standard of service.”

 

The fact is that there are minimum standards of service, and they are related to safety, security and recently airline performance during delays, with airlines facing fines failing to meet these minimum standards.

 

Part of Sen. Landrieu’s BASICS Act is fueled by Secretary of Homeland Security Janet Napolitano’s testimony before the Senate Homeland Security subcommittee, which Sen. Landrieu chairs. In Sect. Napolitano’s testimony she states that airline checked baggage fees have increased the Transportation Security Administration (TSA) carry on screening cost by an estimated US$260,000,000 annually, however the Department of Homeland Security (DHS) is hazy in how this figure was derived.  Sen. Landrieu argues that the additional US$260,000,000 in TSA expenses for screening are being shouldered by taxpayers, while failing to acknowledge that a large portion of commercial aviation security costs are funded through taxes and fees levied against passengers when purchasing airline tickets.

 

Without a complete breakdown of the TSA’s calculations on how the agency determines its perceived passenger screening costs, it is hard to verify the agency’s claims that airline checked baggage fees are costing an addition US$260-million annually. As the agency’s primary function is passenger screening and that airlines have long since allowed passengers one-carry on and one personal item, even prior to the TSA’s ban on liquid and airline checked baggage fees, it is problematic that the agency has failed to properly factor in the costs of screening passengers into its annual budget.  In 2011, the TSA’s annual budget was US$8,164,780,000 with an estimated Aviation Security budget of US$5,796,993,800 and an addition Checkpoint Screening Security Fund of approximately US$326,591,200. These budgets allocations should certainly factor in the costs of screening each airline passenger, as well as their allowed carried on items. As each airline is allowed to create their own carry on baggage policy, which is required to be approved of by the Federal Aviation Administration (FAA), and enforced by the FAA, the TSA’s failure to factor in the financial costs of screening passengers and their carry on baggage shows a lack of pre-planning and fiscal responsibility.

 

If Sen. Landrieu wants to require airlines to allow one checked bag and one carry on bag at no fee, she is likely to force airlines start charging passengers for their ‘personal item’ or have airlines adjust the carry on and checked baggage allowable sizes and weights so that all bags are oversized or over weight … which would then force the FAA and Department of Transportation (DOT)  to step in to regulate carry on and checked baggage size and weights. Getting the FAA and DOT to step in and regular carry on and checked baggage size and weight can deprive some airlines of a competitive advantage and cost needless taxpayer dollars regulating something that need not be regulated.

 

With all the regulations airlines must adhere to, and the industry constantly falling into financial crisis, the last thing the U.S. Government should be doing is tampering with airline business and pricing models. Airlines have finally found a consistent revenue stream to aid with the rising costs of fuel and the public’s demand for rock bottom prices. Depriving an airline of its ability to make business choices related to generating a positive revenue stream is not only unnecessary but is also reckless and for some airlines could destroy their entire (and profitable) business model.

 

Do I like checked baggage fees? No, I do not … but I also don’t like the government spending money to implement new regulations that need not exist in the first place.   Hopefully the Basic Airline Standards to Improve Customer Satisfaction Act looses its baggage tag while changing flights and ends up in a dark shuttered storage unit never to be reunited with its owner.

 

Happy Flying!

 

@flyingwithfish

Comments

  1. If anything, I’d love to see a reciprocity rule. If an airline imposes a change penalty, the same penalty should apply for schedule changes the airline makes. If the airline charges a checked bag fee, the same fee should apply to the airline when a passenger is required to check a bag due to lack of carry on space.

  2. I’m not familiar with a blog that “awaits moderation” for a comment for three hours.

    Seems a bit weak, Aand not appropriate at all in tody’s blogland.

    You must be very special.

  3. Absolutely outrageous. The government has no right telling an airline what it can and cannot charge for it’s services. Not only will this not help, this will hurt the majority of consumers, who will be stuck paying higher fares because airlines shave to come up with that lost revenue from somewhere. I guess if this passes (<0% chance) they can (and should) charge per bag (and for weight where applicable) handled at the counter. Same prices, no DIY, problem solved.

  4. Colleen,

    Sometimes comments don’t get moderated for a day, I apologize for the delay. My blog is not my full time job, I tend to juggle multiple projects, while taking care of my three young kids. I am in the midst of catching up on a back log of blog posts due to family health issues, kids being home for Thanksgiving since Wednesday and today being the first day I am not working and chasing kids, quite frankly moderating blog comments is at the end of my to do list.

    I appreciate your taking the time to read Flying With Fish and leaving comments,but comments requiring moderation are done manually.

    Happy Flying!

    -Fish

  5. What an airline charges for tickets, bags, drinks or movies is no business of the government.

    The one area of sympathy I have with the regulators is when it comes to transparency, although airlines are not the worst culprits here. To my mind, when a price is advertised, all compulsory charges should be included. This would include all taxes, misc fees, booking fees etc. Also, if a roundtrip is required then you should only be allowed to advertise a roundtrip price. Without full transparency it is very difficult for consumers to compare prices properly and it opens the door for unscrupulous operators to deliberately mislead.

  6. The government should not interfere with fees levied by the airlines. However for fee an airline levies the passenger should expect a minimum level of service. So if I pay for the “privilege” of checking my bag I expected to be there when I arrive. So lost bags and delayed bags should be promptly compensated with no ifs or buts.

  7. Why do politicians fail to understand that every time they create rules and regulations for private industry, that the companies they are regulating are simply going to jack up the price of what they sell to consumers? If I have to pay either way, then leave the system alone! When the government gets involved the overall cost goes up even higher than it was before due to the layers.

  8. I say let the airlines charge bag fees! They one I work for does not charge for bags, and has experienced record load factors month after month, quarter after quarter – and NOT necessarily in tandem with any drastic fare sales. Airlines who gouge their customers with ancillary fees are driving their customers away. Customers of ANY industry want all-inclusive pricing. maybe I’m preaching to the choir here… 🙂

    Bag fees are not the answer to save an airline’s bottom line. Just look at AMR.

  9. Agree – The government has no place in the baggage discussion.

    Thanks for the great blog….even with “awaits moderation.”

  10. HikerT,

    I’m 100% in agreement with you. Everything the airline does with respect to the consumer is completely one-sided.

    Unfortunately, the claim that EVERYTHING is weather-related. If not at your departure, or destination, at some other place where your departure aircraft was two days ago.

    Sorry… weather-related. Enjoy your stay here at the regional airport.

  11. “Absolutely outrageous. The government has no right telling an airline what it can and cannot charge for it’s services”

    They do when the taxpayers continuously save them from bankruptcy.

  12. If they force the airlines to allow a checked bag for “free” the fares will just magically go up $50 across the board. So people who don’t check bags like me will have to pay for a checked bag. People should only pay for the service they use.

  13. It seems Brazil has rules restricting baggage fees. I just flew budget airline Pluna from Santiago to Buenos Aires. On all Brazil origin/destination tickets they cannot charge for the first bag but charge US$30 on tickets for their other countries. Perhaps they just boost Brazil ticket prices. It would be interesting to look into the details and effects, and what that may mean if the US followed suit.

  14. The “extra” screening the TSA is allegedly doing is a red herring.

    The bags are either going through the checkpoint or into the belly of the plane. Where these bags are screened has little or no impact on the overall number. If anything the total number of bags has probably decreased since airlines began charging.

    If TSA can’t move screeners from checked baggage screening to passenger checkpoints, that’s their problem.

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