Nuisance or nefarious? Airline fees push the limits

Margaret Waldman's surprise airline "refund fee" is a mystery. Solving it could be a bad sign for all of us.

Waldman, a retired writer who lives in Oakland, Calif., decided to cancel a recent flight to Spain, which should have been no problem. The Department of Transportation (DOT) has a 24-hour rule that says most tickets have to be refunded if you notify the airline within a day. Fully refunded.

Instead, Iberia charged Waldman a $25 fee.

"Iberia's customer service department told me this is standard company policy," she says. "My understanding is this is against the law."

Is it my imagination, or are the number of complaints about nuisance airline fees on the rise?

It's hard to tell. The government doesn't track complaint data on fees. But it does have a complaint category for "ticketing" and "customer service" — two areas where fee-grievances are likely to be filed. And the number of complaints in those categories climbed from 3,736 in 2013 to 3,966 last year.

A likely culprit: nuisance fees. This relatively new strain of surcharges, quietly imposed on unwitting airline passengers, are often hard to explain and even harder to justify. They can include extras like Waldman's refund fee, mandatory-looking airline seat fees or higher fees for items passengers already pay for, like luggage.

Waldman's puzzle took a little time to solve. Turns out the flight for which she wanted a refund was within Europe. So the DOT's 24-hour refund rule — which requires reservations to be held at the quoted fare without payment, or canceled without penalty, for at least 24 hours after a reservation is made — didn't apply.

Consuelo Arias, a spokesman for Iberia, said the airline allows passengers to hold a reservation for a day. After that, it imposes a refund fee on certain tickets. Arias said Iberia had done Waldman a favor by refunding her ticket. Technically, it was completely non-refundable.

"Once the ticket has been issued, the normal fare conditions apply," he says. "This ticket wasn't refundable, nor could it be changed. We did refund it, but did apply the refund fee."

But still, a $25 "refund" fee? Come on.

All of which brings us to Frontier Airlines. It's been exploring the "frontiers" of fees lately, much to the displeasure of passengers such as Cherylyn LeBon. She paid $868 for four tickets from Washington to Las Vegas on the Denver-based airline recently. LeBon, who is traveling with two young children, expected to pay more for her luggage, but when she finished her reservation, it also asked her to shell out extra money for a seat assignment.

"When did they start charging for seats?" she asks. "That's news to me."

Technically, Frontier charges extra if you want to reserve a seat, according to the airline.

But that's not the message LeBon received. When she refused to pay $4 to $16 per seat, a large pop-up appeared on her computer screen. "ARE YOU SURE?" it asked. "Ensure you aren't separated from your pals or family. Prices may be higher at check-in." To her, that looked like Frontier might charge her even more for a seat when she got to the airport, at best — and at worst that it would ensure she would be separated from her family if she didn't act now. So she paid $16 for each seat.

Frontier is pushing the limits when it comes to other fees, too. Earlier this month, it raised luggage fees, even though fuel prices had fallen. Fees for bags paid for through Frontier's call centers, at the airport, or through another website, jumped by $5 a bag. And the "gate check" fee for a bag carried to the gate that exceeds the permitted dimensions for carry-on luggage rose from $50 to $60, according to the airline.

Lately, airlines haven't even bothered to explain themselves when they add these surcharges. They do it because they can and because people are compelled to pay.

"They're ridiculous," says Amrita Holden, a managing partner for an energy company in Anaheim, Calif. Charges for seat reservations and luggage should be included in the fare, says Holden, who is shocked by the lack of disclosure of the fees and the increasingly defiant attitude with which airlines apply them.

Of course, not everyone is down on the new fees. After all, when fees rise, fares sometimes fall. If you learn to play the system, you can save money. That's Beth Ellen Nash's position, after first being stung by Spirit Airlines' notorious fees.

"Now that I've been flying them a few times, I appreciate that I only pay for the services I want," says Nash, an education consultant from Madison, Wis. "I do not pay $3 for a can of soda. Once I learned their system, I appreciate their bare-fare approach to only pay for what is actually important to me."

True, there are a few passengers who have figured out a way around the airline nuisance fees. But the only clear winners in this game are the airlines. Most passengers will pay higher prices to fly than they expected — and that's wrong.

How to not get stuck with an airline nuisance fee

• Fly the airlines that are up front about prices. Carriers like Southwest Airlines include the price of two bags in their fare. "Ultra" low-cost airlines like Spirit Airlines and Frontier Airlines charge extra for anything that isn't nailed down, including a carry-on bag. JetBlue has built a reputation as an airline that didn't nickel-and-dime passengers, but it's shifting to a fee-based fare system.

• Read the fine print. Airlines are required by law to disclose their fees. They don't always do it in a customer-friendly way, so you have to pay close attention when booking online, or ask questions when buying a ticket by phone. That's where the nuisance fees flourish. Make sure you cover the basics, like luggage fees, seat reservation fees and charges for items like boarding passes.

• Tell the government. The Department of Transportation's Aviation Consumer Protection Division can help if you encounter a fee that hasn't been adequately disclosed. The agency may be able to help you secure a refund and even change the way the fee is disclosed in the future. Ultimately, the federal government needs to take a role as fees proliferate.

Christopher Elliott is a consumer advocate and editor at large for National Geographic Traveler. Contact him at chris@elliott.org or visit elliott.org.