A New Airline Fee Infuriates Passengers

Summary

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WSJ Your Money Briefing

Episode: A New Airline Fee Infuriates Passengers
Host: JR Whalen
Guest: Scott McCartney, Wall Street Journal columnist
Date: September 15, 2017

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Episode Overview

In this episode, host JR Whalen speaks with WSJ Middle Seat columnist Scott McCartney about the latest airline practice driving passengers up the wall: a new fee imposed on travelers buying basic economy fares. The discussion centers on how these added fees, especially so-called "gate service fees," increase confusion and frustration for flyers, while blurring the lines of what’s really included in a basic economy ticket. The conversation also considers the broader implications for consumers and the challenges these evolving fare structures create for both travelers and independent travel agencies.

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Key Discussion Points & Insights

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1. The New Fee: "Gate Handling" / "Gate Service Fee"

[00:50 - 02:38]

• Fee Structure Confusion:

  • Basic economy fares with United and American Airlines prohibit carry-on bags in the overhead bin—unless you're an elite frequent flyer or have an airline credit card.
  • Delta allows basic economy passengers to bring overhead bags, adding further inconsistency.

• Gate Penalties:

  • If passengers arrive at the gate with a full-sized carry-on, they must not only pay the standard $25–35 checked bag fee but also an additional $25 "gate handling charge" or "gate service fee" (depending on the airline).
  • This penalty does not apply if bags are checked at the ticket counter, not the gate.

• Purpose:

  • The fees are designed to modify passenger behavior, pushing them toward checking baggage earlier—but often cause confusion since long-standing travel habits are upended.

  "For many people ... they have brought carry on bags to the gate forever and ever and ever. And now you're telling them they have to check in the lobby and not at the gate. It's really confusing and frustrating."
  — Scott McCartney [01:54]

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2. The Terminology Problem: "Basic" Isn’t So Basic

[02:43 - 03:29]

• Many passengers assume "basic" means the usual coach class experience, but in reality it strips away traditional perks.

• McCartney notes that some say the class should be called "third class," since it includes notably fewer privileges than standard coach.

  "Many of us think basic means, you know, kind of the basic stuff that we've been buying in coach for years ... but there's a difference between 'basic' and 'bare bones.'"
  — Scott McCartney [02:57]

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3. Disclosure Challenges: Transparency on Travel Sites and Devices

[03:43 - 05:03]

• Airline websites do disclose most fees—if you know where to look.

• Third-party travel sites (Orbitz, Expedia, etc.) and aggregators present major problems:

  • Basic economy is often shown most prominently due to its low price.
  • Important fare restrictions, such as "gate service fees," are typically buried in fine print or are hard to find, particularly on mobile devices.

  "If you look on Google flights, there may be some faint wording there ... but you’re really not going to know what you’re in for until you click through and get to the airline website."
  — Scott McCartney [04:31]

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4. Real-World Passenger Experiences

[05:29 - 06:46]

• Case Study 1: A family flying United purchased basic economy tickets, unaware of the baggage rules. They checked in online for one checked bag, arrived at the gate with two carry-ons, and were told this was "illegal," resulting in extra penalty fees.
• Case Study 2: Another traveler paid $485 for a basic economy roundtrip (New York–Denver) and was shocked at the stripped-down privileges for such a non-discounted fare. He was warned at the ticket counter about the penalty and avoided it, but felt the policy was "a little bit cruel and unusual punishment."

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5. The Disappearing Savings: Are Basic Economy Fares Worth It?

[06:46 - 07:58]

• For families or anyone checking bags, any upfront savings on basic economy are quickly lost to fees and penalties.

• In one example, a couple paid $110 in bag fees roundtrip for their carry-on bags—far more than the $30–50 they saved by not buying a regular economy fare.

  "If you are going to take a bag with basic economy, you ought to buy the higher fare because you’re at the least going to have to pay the bag fee and in the worst case may get hit with this stealth penalty collected at the gate."
  — Scott McCartney [07:51]

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6. Impact on Independent Travel Agents

[07:58 - 09:09]

• Third-party and independent travel sellers struggle to keep up with the ever-evolving, airline-specific rules and to accurately inform customers.

• Online purchases tend to foster a "click-through" mindset, so critical fare details can be easily overlooked—unlike inconsequential music-buying terms, misunderstanding airline fine print can mean real penalties for customers.

  "In most cases ... if I agree to the terms and conditions on buying music on iTunes or whatever, I’m not going to get penalized because I didn’t read it carefully. But with airlines, you can get penalized for not reading it carefully. I think a real trap for consumers."
  — Scott McCartney [08:38]

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Notable Quotes & Memorable Moments

• "There's a micromanagement aspect to this ... we want you to check your bag at this point and not at that point. And that's different from every other time you've had to get on an airplane."
  — Scott McCartney [02:43]

• "Somebody said, well, they ought to call it third class because, you know, you have fewer rights and privileges than other coach passengers."
  — Scott McCartney [03:17]

• "The savings on Basic Economy disappears really fast ... add that in and the $30–$50 they saved up front ... that savings disappeared long ago."
  — Scott McCartney [07:13]

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Key Takeaways

• Buyer Beware: Understand all the restrictions before purchasing a basic economy fare, especially if you plan to travel with more than a personal item.
• Read the Fine Print: Don't rely solely on summaries from travel sites—always review airline-specific baggage and penalty policies.
• Is It Worth the Savings? Calculate all potential fees in advance; basic economy can quickly become more expensive than standard economy if you don’t adhere strictly to its limitations.

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Summary prepared for listeners who want the essential insights from WSJ’s “A New Airline Fee Infuriates Passengers” without enduring the confusion first-hand.

Transcript

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] WashingtonWise this Is yous Money Matters

[B]

from the Wall Street Journal. Welcome to youo Money Matters. I'm JR Whalen in New York. What infuriates air travelers more than cramped seating? Its fees. And airlines have a new fee to add to passengers paying. Wall Street Journal Middle State columnist Scott McCartney joins us with details. So, Scott, not only does an additional airline fee add to the frustration felt by passengers, but you write in your column that many of them who buy the basic economy fare really never saw this one coming.

[C]

Yeah, that's right. It gets so confusing that it's really hard to figure out what you're supposed to do as a passenger. When you buy a basic economy fare on United and American, you don't get to put a bag in the overhead bin. Now you do if you're an elite level frequent flyer or you have an airline sponsored credit card and you do on Delta with basic economy, but you don't otherwise on United and American, okay, fine, that gets disclosed. And you know you're going to have to pay the bag fee. But you bring your carry on bag to the gate and you know, some people may realize they're going to have to pay the fee at the gate. Some people may not and may have missed that, not read all the terms and conditions. But if you bring that back to the gate, you're also going to have to pay what United calls a gate handling charge and what American calls a gate service fee. And this is essentially a penalty on top of a fee. So you pay your $25 checked bag fee to check the bag if it's your first bag, 35 if it's your second bag on a domestic flight. And then you also have to pay the $25 penalty and you don't have to pay it if you happen to check the bag at the ticket counter. It's all on where you are checking the bag. And this gets down to airlines imposing penalties to try and drive passenger behavior. But you know, for many people, this is man, they have brought carry on bags to the gate forever and ever and ever. And now you're telling them they have to check in the lobby and not at the gate. It's really confusing and frustrating. Some passengers who get hit with this

[B]

fee drive passenger behavior. They're driving them up a wall. Is what it sounds like.

[C]

Yeah, no, I think that's right. There's a micromanagement aspect to this that, you know, we want you to check your bag at this point and not at that point. And that's different from every other time you've had to get on an airplane. And it's because we sold you a different fare. But we called that fare basic. But, you know, many of us think basic means, you know, kind of the basic stuff that we've been buying and coach for years and years and years. There's a difference between basic and bare bones or, or basic. And somebody said, well, they ought to call it third class because, you know, you have fewer rights and privileges than other coach passengers. I think the name can even be confusing and misleading.

[B]

So passengers going for the basic economy fare think that, you know, I'm going to beat the system a little bit here because I've got a good bare bones fare. But the lesson here is there really is no such thing as a free lunch, right?

[C]

Yeah, I think so. I think so. It's really tricky. If you buy Basic economy on an airline website, they do a pretty good job of disclosing it. You're going to have to look pretty hard. Now, you may not drill down far enough to find the gate service fee. It may be pretty clear to you that you can't bring an overhead bag on and you're going to have to check the bag. Not necessarily so clear where you have to check the bag, but if you're buying, if you're searching on Orbitz or Travelocity or Expedia or Google Flights or any one of dozens and dozens of flight search stuff, it gets really tricky because the basic economy fares are going to be cheaper than regular coach fares. They're going to show up first in the display. If you look on Google flights, there may be some faint wording there that says as a basic economy, but you're really not going to know what you're in for until you click through and get to the airline website. And on sites that actually sell you the tickets, they've got a tough job of disclosing all this stuff, especially when you think about it. People are buying more and more on their phones. Where is it on that 4 inch phone that you're going to disclose to somebody the terms of the gate service fee?

[B]

Yeah. How small would that print have to be? Right.

[C]

Right.

[B]

Now you spoke to some people in your column. We want to get to that in just a moment. We're speaking with Wall street journal's Scott McCartney about surprise airline fees. And you're listening to your Money Matters from the Wall Street Journal. Welcome back, everyone. Thanks for listening. So Scott, you spoke with some people in your column about their experience with these fees and you ran into a

[C]

really hearing about a lot of frustration with one family. She bought the tickets. She wasn't really sure what Basic Economy was. I think he didn't know what they were in for. He checked in the night before on United and was allowed to do that because they were checking one bag, but they planned to bring two carry ons too. And so they got all the way to the gate before they were told that this was illegal and they were going to be penalized for it. Another traveler, you know, he had a $485 ticket from New York to Denver. Not exactly bare bones cheap, but that was a basic economy fare. And he was kind of incredulous that for $485 you get stripped down privileges with that in coach. But he did get warned in the ticket lobby that he was going to have to check there or pay the penalty. And so he did. But just thought, you know, it was, I think the term he used a little bit cruel and unusual punishment for travelers to have to comply with all this stuff.

[B]

So whether you're paying a fee as a basic Economy passenger or you're not paying a fee, if you pay a higher tier fee, there's room for your bag on the plane. It's just a question of how much do you have to shell out.

[C]

Yeah. Yes. So with, with these folks, you know, the savings on Basic Economy disappears really fast with the, with the husband and wife traveling together, they ended up paying $110 to check their carry on bags. The bags got there as checked baggage for their San Francisco to Boston flight. They're going to have to pay to check them on the way home as well. You add that in the 30 to $50 they saved up front buying Basic Economy instead of the regular coach fare, that savings disappeared long ago. If you are going to take a bag with Basic Economy, you ought to buy the higher fare because you're at the least going to have to pay the bag fee and in the worst case may get hit with this stealth penalty collected at the gate.

[B]

You also mentioned that the surprise fees and the hard to understand airline policies, they also make it kind of difficult for independent travel sellers in their business.

[C]

Yeah, they do. It really gets tough because the independent travel seller has to disclose all of these rules and you know, to sort of inform the traveler. The rules are different airline to airline and now fee to fee. And so, you know, as they try and do the best they can to inform customers, it gets really tough. Also gets tough because, you know, we're so ingrained to, you know, terms and conditions come up on all kinds of purchases and you just click, yes, I agree, and you go on. And so in most cases, if I agree to the terms and conditions on buying music on itunes or whatever, I'm not going to get penalized because I didn't read it carefully. But with airlines, you can get penalized for not reading it carefully. I think a real trap for consumers.

[B]

Wow. So it's buyer beware and do your homework. That seems to be the law here. Well, that's The Wall Street Journal's Scott McCartney on one of the more bothersome things in life, airline fees. Scott, thank you so much for joining us.

[C]

Good to be with you, JR and

[B]

thank you for listening to your Money Matters. I'm JR Whalen in New York at the Wall Street Journal.

[A]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] WashingtonWise.