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Airline's Recent Decision to Charge Passengers A Whopping $45 for Carry-on Baggage Exploits Unintended Tax Loophole

Airlines, In Effort to Shift Costs, Have Been Jacking-Up Baggage Fees to Increase Profits; Recent Decision by Airline Opens Door for Other Airlines to Follow

Senators: This Fee Crosses The Line; Passengers Have Had Enough With More and More Fees

WASHINGTON, DC-U.S. Senators Charles E. Schumer (DN.Y.), Robert Menendez (DN.J.), Ben Cardin (DMD), Frank Lautenberg (DNJ), Blanche Lincoln (DAR), Amy Klobuchar (DMN) and Jeanne Shaheen (DN.H.) announced new legislation Wednesday to confront airlines that are socking travelers with new fees for carryon luggage.
The legislation comes after Spirit Airlines announced last week that it would begin charging customers a whopping $45 for carryon luggage. The policy could spur other airlines to follow suit and impose a similar fee. The senators' legislation is designed to rein in this new practice and restore basic fairness to airline travel.
The bill is called the Block Airlines' Gratuitous (BAG) Fees Act, or the BAG Fees Act.
"Airline passengers have always had the right to bring a carryon bag without having to worry about getting nickel and dimed by an airline company," Senator Schumer said. "This latest fee crosses the line and is a slap in the face to travelers. Our legislation will rein in the airlines and keep air travelers from being gouged every time they board a plane."
Senator Menendez said: "The way this is going, one day they'll want to make your seat's recline coin operated. It seems that air carriers are crossing a line that will end of pricing middle class families right out of being able to fly, and that's not right. While airlines have a right to set prices, families should have the right to bring a change of clothes with them and not be gouged for it."
"Carryon luggage is where people keep items essential to their health, work, and safety like laptop computers, medications, food to eat on the plane, baby formula, eye glasses and other items that need to be kept close at hand. These are personal items that airline passengers should not be charged to keep with them in the cabin.  When we tried to include such a ban in the FAA Reauthorization last month, we were blocked and told it was improbable airlines would ever charge for carryon bags. Well, so far one airline has announced their intention to make fees for carryon bags a reality. We cannot allow these flood gates to open." said Senator Cardin, who has also authored another legislation that would impose an outright ban on carryon fees.
"As airlines continue to pile on fees for even the most basic services, the rights of passengers are being left at the curb," said Senator Lautenberg.  "Airlines are taking advantage of a tax loophole and reaping financial benefits at the expense of travelers.  It's time to say enough is enough.  Let's put an end to passenger mistreatment and restore consumer protections."
"In airline travel, 'service with a smile' has been replaced by 'service with a cash register,'" said Senator Klobuchar.
"Charging consumers for overhead carryon luggage is skyway robbery," said Senator Shaheen.  "It is outrageous that American families, who are already feeling the squeeze in this economy, are now being punished for something that is completely beyond their control.  I am hopeful this legislation will prevent airlines from forcing more unreasonable and unfair fees onto their customers."
During this tough economic time, the airline industry has sought to keep ticket prices low while maintaining their bottom line by adding supplemental fees to airline travel. In the past year, some airlines have added fees for checked baggage, extra legroom, seat assignments, peanuts, and event trips to the bathroom. For the most part, passengers have begrudgingly accepted these new fees. But the latest fee that the airline industry is seeking to impose on travelers breaks with a longstanding practice of allowing travelers to carry luggage onto the plane for free.
Since the inception of commercial air travel, customers have always been given the opportunity to bring one carryon bag with them to store in the overhead compartment without fear of being slapped with an additional fee. Carryon luggage is particularly essential for weekend travelers, day trippers, and overnighters. The new fee will greatly add to the cost of travel for both business and leisure travelers. Families with children will also be hurt, as parents almost always need a carryon item in order to store vital items like medicine, baby formula, or diapers.
The timing of the fee will also likely impact those trying to take their family on a summer vacation.
The senators' legislation would confront this proposed fee by designating carryon baggage as a necessity for air travelers. Airlines currently pay a 7.5cent tax to the federal government for every dollar they collect in fares, but no tax is imposed on fees collected for nonessential services. Last January, the Treasury Department issued a ruling that deemed carryon bags as nonessential for air travel. As a result, airlines can impose fees on these bags without paying any tax to the federal government on the revenues they collect. This creates a tax incentive for airlines to try to bilk consumers in the form of fees rather than by increasing the fares. The senators said Wednesday that if this tax loophole regarding carryon bags did not exist, the airlines would likely not seek to charge travelers for this baggage.