Tuesday, November 22, 2011

Senate Introduces Legislation to Curb Baggage Fees

The latest idea in domestic aviation regulation comes courtesy of Senator Mary Landrieu (D-La.) who has introduced legislation intended to prevent airlines from charging for checked bags. See Chris Isidore, Bill Would Scrap Checked Baggage Fee, CNN Money, Nov. 22, 2011 (available here). Landrieu put forth two alternative proposals, one that would completely prohibit airlines from charging passengers for the first checked bag, and a second that would tax airlines for baggage fees, ostensibly to help offset TSA expenses resulting from the increased volume of carry-on bags since bag-check fees were introduced. It is unclear at this point whether the bill is simply pre-holiday pandering, or if concerns about TSA costs and support from consumer and travel advocacy groups will give it a legitimate chance of passage. Restricting the use of baggage fees and forcing airlines to distribute costs more widely through the less-targeted mechanism of higher ticket prices hardly seems like a good idea. U.S. carriers are estimated to have collected $3.4 billion in baggage fees last year, revenue the airlines cannot afford to lose. To put the cost of the proposal in perspective, the Air Transport Association estimated that participation in the EU ETS would cost U.S. carriers $3.1 billion in total from 2012-2020. Thus, were this bill to receive serious support, it would seemingly undermine any claims by the U.S. government that its objections to participation in the EU ETS are motivated by concern for the industry's ability to bear the costs of emissions regulations. 


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