Proposed fee categories

• Baggage
• Reservation cancellation and change fees
• Booking fees, including fees for telephone reservations
• Priority check-in and security screening
• In-flight medical equipment
• In-flight entertainment/Internet access
• Sleep sets
• In-flight food/nonalcoholic drinks
• Alcoholic drinks
• Pet accommodation
• Seating assignments
• Charges for lost tickets
• Assistance fee for unaccompanied minor
• Frequent-flyer points/points acceleration
• Commissions on travel packages
• Travel insurance
• Duty-free and retail sales
• One-time lounge passes

The Department of Transportation has proposed a rule requiring airlines to report all ancillary revenue to the DOT’s Bureau of Transportation Statistics.

Airlines currently submit quarterly reports on revenue from baggage and reservation change fees. Under the proposed rule, the DOT would gather data on ancillary revenue in 16 additional categories (see list at left).

Fees collected from services other than checking bags and changing reservations are currently reported to the DOT collectively as miscellaneous.

The DOT noted that collection of airline-fee data was recommended by the Government Accountability Office in a July 2010 report.

The DOT proposes to glean detailed information on ancillary fees from charges listed by the Airline Tariff Publishing Co.

ATPCO, collector of fare and fare-related data, has more than 200 subcodes for items the DOT proposes to report, the department said.

Inflight beveragesThe DOT said it is not requiring the airlines to break out the data; rather, the DOT would "use the ATPCO list of charges as a reference in developing a new reporting form."

The DOT said its goals are informing consumers and airline analysts about the total amount of fees that airlines are collecting from passengers, and helping to "determine the impact of the increasing use of these fees on the Airport and Airway Trust Fund."

One of the trust fund's revenue sources is the U.S. government's 7.5% excise tax on airfares and "fees required as a condition of receiving domestic air transportation," such as some change and cancellation fees. Funds are used toward capital-improvement projects at airports.

However, most ancillary fees, including bag fees, are not subject to the excise tax.

Spirit Airlines CEO Ben Baldanza has said that offering customers a menu for extra services helps the airline keep fares very low. Such a strategy enables an airline to collect more revenue that avoids the excise tax, plus reduce the amount that is taxed — if the airline is able to reduce base fares by charging extra for ancillaries.

In the "last few years," during which time airlines have added more a la carte services, revenue to the Airport and Airway Trust Fund has "slightly decreased," the DOT said.

Comments on the proposed rule will be accepted through Sept. 13. The DOT expects to issue a final rule next spring.

Comments can be submitted to the Federal Docket Management System at www.regulations.gov, Docket ID No. RITA-2011-0001.

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