Representatives of Delta, American, United, Frontier and Spirit appear committed to continuing the legal fight against a regulation that would require airlines to disclose full fares -- including ancillary fees -- when a flight search is conducted.
During a hearing of the Senate Permanent Subcommittee on Investigations on Dec. 4, committee chairmen Sen. Richard Blumenthal (D-Conn.) sought commitments to drop the suit, which had led to a federal circuit court ruling that stayed implementation of the disclosure rule.
"We've had a lot of commitments this morning to transparency, but you're all in court trying to block the Department of Transportation's rule," Blumenthal said, before asking the five airlines one-by-one about dropping the case.
None would commit to doing so.
"The DOT is an important partner, and I will tell you that many of the things in that rule we already do at Delta, but I will also say that the rule is overly proscriptive," said Peter Carter, who leads Delta's legal affairs team. "So, it's not so much the spirit of transparency, which we embrace and we execute, but it's more the detail."
Pressed further by Blumenthal, Carter reiterated that Delta does disclose all of its fees, but that he wouldn't commit to dropping its case against the fee disclosure rule.
Under the regulation, which was finalized in April, airlines and ticket agents would be required to tell consumers at the start of the booking process what fees they charge for a first or second checked bag, a carry-on bag and for canceling or changing a reservation.
In July, a three-judge panel from the Fifth U.S. Circuit Court of Appeals found that the "rule likely exceeds DOT's authority and will irreparably harm airlines."
Wednesday's hearing came in follow-up to a Nov. 26 report issued by the investigations subcommittee, which questioned the airline practice of charging fees for seat selection and also whether United, Spirit and Frontier are paying the 7.5% air transportation excise tax on those fees.
United chief commercial officer Andrew Nocella took issue with that allegation during his opening remarks at the hearing, saying that committee investigators looked in the wrong place for records of United's payments.
"United has always paid the 7.5% transportation tax on all seat fees but it's not displayed in the booking path because United pays this directly to the Treasury," Nocella said.
The report also zeroed in on Spirit and Frontier policies to pay gate agents to flag customers who haven't paid for carry-on-bags. In 2022 and 2023, Spirit and Frontier paid more than $26 million in employee incentives to collect fees, the report stated. At Frontier, customer service agents receive $10 for each fee collected for carry-on bags at the departure gate. Spirit pays a $5 commission. In 2023 alone, Frontier agents received $11.4 million in such payments.
Blumenthal questioned Frontier chief commercial officer Bobby Schroeter about those incentive payments, which he labeled "bounty payments."
But Schroeter said the focus of the payments is to ensure compliance with the airline's rules, rather than to make money.
"This program isn't about revenue. This program is about creating a fair and equitable setup for our customers," Schroeter said.
He added that employees can be removed from the incentive program if they receive a heightened level of complaints.
Blumenthal concluded his questioning by showing a video of a Frontier gate agent telling a customer that his bag was too big to stow as a free personal item, even though the bag clearly fit in the sizing bin at the Frontier gate.
"The frustration in that passenger's voice is felt every day by countless passengers arriving at the gate with basically no choice. Their flight is leaving in minutes. They have no appeal," Blumenthal said.