While few people like paying the various ancillary fees that most airlines assess in some way these days, virtually no one will like the ultimate outcome if the government were to prohibit or control them, which would be higher overall ticket prices and fewer flights.
Fees added onto the actual cost of the ticket are not new, of course; airlines have charged a change fee for people who buy low-price "economy ticket" for some time, and this fee has climbed. In the last few years the airlines have implemented a la carte pricing and begun charging people for different optional services such as checking in luggage, seat selection, and a few now offer basic economy fares that preclude travelers who purchase such tickets from putting a bag into the overhead bin as well.
To some people, such fees amount to a fleecing of consumers, and a few politicians have banded together in an attempt to assuage that feeling. There is bipartisan legislation afoot in the Senate that would limit change fees, baggage fees, and other ancillary fees to the "actual cost" of providing those services, which is nominal, as strictly defined.
While to those who"™ve changed their nonrefundable ticket and pay a change fee, such a shift might be welcome; however, this is not a step forward for consumers. The main problem is that the nominal cost of these services is completely different from the impact of not charging such fees.
People who buy nonrefundable tickets that have a change fee generally go to some lengths to avoid having to change their flight. This is the overt intent of such a charge.
Thanks to sophisticated pricing software, most airlines have greatly reduced the number of empty seats on an airplane. Discouraging people from changing their flights with a change fee helps ensure the airline makes a profit by keeping planes full to cover the tremendous cost of operating a flight. The better airlines are at accomplishing it, the lower their per-person costs are. In a competitive market this will, in turn, lead them to reduce prices to capture as many travelers as possible.
The Senate proposal to limit the price an airline may charge for changing a ticket to some measure of cost is nonsensical: while actually a changing a ticket costs an agent a few seconds of time and a click on an icon, the opportunity cost–which is what matters, from the perspective of an economist–is much higher, which is a reduction in the number of seats sold…
