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Airlines Get Billions From Unbundled Services

July 18th, 2010 07:46 admin Leave a comment Go to comments

Hugh Pickens writes “In hearings before Congress, the Government Accountability Office (GAO) said that airlines reported revenue of $7.9 billion from baggage fees and reservation change and cancellation fees in calendar years 2008 and 2009 — fees on unbundled services that once were considered part of the ticket price. ‘We believe that the proliferation of these fees and the manner in which they are presented to the traveling public can be confusing and in some cases misleading,’ says Robert Rivkin, the Department of Transportation’s general counsel. Published fares used by consumers to choose flights don’t ‘clearly represent the cost of travel when these services are added.’ However, Spirit Airlines President and CEO Ben Baldanza defended the practice of unbundling, saying it allows his airline to charge lower fares (PDF) and allows the customers the choice to purchase the services or not.”

Source: Airlines Get Billions From Unbundled Services

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