By Sam Kemmis | NerdWallet Getting upset at junk fees is like getting upset at the flu. Sure, I’m annoyed both when I get sick and when I have to pay $20 for my seat of choice, but it’s pointless to get mad at the viruses or airlines responsible. They’re just doing their jobs: One maximizing self-replication, and the other, profit.
Since budget airlines rose to prominence over a decade ago, airlines have been exploiting a quirk in human purchasing psychology: We’re attracted to low initial prices and tend to overlook high total costs when fees are “dripped” out slowly. Indeed, it’s been shown that consumers systematically make suboptimal decisions when prices are dripped throughout the checkout process rather than disclosed up front, according to a 2020 study in Harvard Business School’s journal Marketing Science. Just as a virus will exploit a weakness in the human immune system to reproduce itself, airlines have quickly realized that offering the lowest base fare possible and the highest fees is a great way to increase profit.
A 2023 report from IdeaWorksCompany, an airline industry reporting firm, and CarTrawler, a travel software provider, notes that ancillary revenue (i.e., fees) as a percentage of total revenue more than doubled from 6.
7% in 2014 to 14.7% in 2023. Junk fees exist because they work, and they won’t go away until they stop working.
In April, the U.S. Department of Transportation (DOT) rolled out new consumer protections for air passengers.