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Government wants to know all the fees airlines are charging

WASHINGTON — Five dollars for a pillow, $10 to jump ahead in the boarding line — all those annoying airline fees can add up.

Now the Transportation Department is proposing that airlines tell it — and the public — exactly how much they're making on those fees. A rule proposed Friday by the department would require airlines to break down those fees by the type of item or service purchased, from pillows and blankets to entertainment and snacks.

Making airlines report more information about the amount and types of fees will make the total cost of flights more transparent, Transportation Secretary Ray LaHood said.

"In an era of rising fees, passengers deserve better information about how airlines are performing," he said.

The proposed rule would also require that airlines report more useful statistics about lost or damaged luggage and mishandled wheelchairs.

Airlines received $3.4 billion from baggage fees and $2.3 billion from reservation change fees in 2010. There is no federal excise tax on those fees, although they are counted when calculating income taxes.

Revenue from seating assignments and on-board sales of food, drinks, pillows, blankets and entertainment also isn't subject to excise taxes. Until now, airlines haven't been required to report revenue from those items separately to the government.

Taxes on airline tickets go toward subsidizing airports and the nation's air traffic control system. There has been some grumbling in Congress that ancillary fees have enabled airlines to hold down their fares and the taxes they pay to support air transportation.

Steve Lott, a spokesman for the Air Transport Association, which represents major airlines, said the association is reviewing the proposal.

"We support transparency and believe customers should always know what products and services they are paying for," Lott said.

Under the proposal, airlines would be required to report 16 additional categories of fees, in addition to baggage and reservation change fees, the department said.

In April, the department proposed a series of consumer protection regulations, including a requirement that airlines prominently disclose all potential fees on their websites. Airlines also will have to include taxes and government-imposed fees in the fares that they advertise.

The proposal announced Friday would also require airlines to report the total number of bags checked. Airlines already report the number of mishandled bags relative to the number of passengers flown. However, more passengers are choosing not to check bags to avoid fees, decreasing the number of checked bags overall.

Reporting all checked bags would allow passengers to compare the number of lost or damaged bags relative to the number of bags handled by the airlines, which is a more useful comparison, the department said.

In 2010, carriers reported a mishandled baggage rate of 3.57 per 1,000 passengers, an improvement over 2009's rate of 3.99.

Billions from baggage

Airlines received $3.4 billion from baggage fees and

$2.3 billion from reservation change fees in 2010. Under a proposal, airlines would be required to report 16 additional categories of fees, including fees for such things as pillows, snacks and entertainment.

Government wants to know all the fees airlines are charging 07/15/11 [Last modified: Friday, July 15, 2011 10:14pm]
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