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A New Surprise Airline Fee

The Wall Street Journal. logo The Wall Street Journal. 9/14/2017 Scott McCartney

There’s a new snag at the airport catching fliers by surprise: the gate-service fee.

It’s not a fee to use a gate. (Maybe someday!) Instead, United and American have created a fee to discourage travelers who buy their lowest fare, Basic Economy, from bringing a carry-on bag that doesn’t fit under the seat.

With Basic Economy on United and American, you lack privileges to put a bag in an overhead bin unless you have elite status or a qualifying credit card. But if you don’t figure that out before boarding or try and sneak one on anyway, the two airlines charge the standard baggage fee to check the bag at the gate, usually $25 if it’s your first checked bag. Then, they hit you with an additional $25 fee.

United calls it a gate-handling charge. American labels it a gate-service fee. It’s really a penalty on top of a fee.

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Most passengers don’t get charged a baggage fee when planes run out of overhead bin space and bags must be checked. They are entitled to two carry-on items: a small one under the seat and a larger one overhead. Not so with Basic Economy on United and American. (Delta’s Basic Economy does allow an overhead bin bag.)

Vishnu Bhargava and his wife were flying on United from San Francisco to Boston in late July and didn’t notice the conditions of Basic Economy tickets. He checked in the night before, paid for one checked bag and planned to bring two carry-ons. He didn’t read the small print.

When they got to the gate, they were told their carry-on bags would have to be checked. His cost $50—the standard bag fee plus the gate handling charge. His wife’s was $60, since she had already checked one bag. United charges $35 for a second bag, plus the extra fee.

“I was shocked,” says Mr. Bhargava, a retired physician from India. “Whatever I saved with Basic Economy, I had to pay more. This fee is not at all fair.”

United says it communicates with customers about the Basic Economy rules throughout the booking process and prior to airport arrival. “We do everything we can to make sure customers do not reach the gate with a bag that needs to be gate-checked,” spokeswoman Maggie Schmerin says.

She declined to comment on why the gate-handling charge is added to the baggage fee. In the past, United has said that blocking overhead-bin carry-ons from Basic Economy passengers has sped up departures, since gate agents tag and check fewer bags.

American says it decided to impose the additional fee to encourage Basic Economy passengers to check bags at the ticket counter instead of the gate. “The whole guiding principle here is that it’s important for Basic Economy passengers to check all bags larger than a personal item,” spokesman Josh Freed says.

Checking more bags at the ticket counter avoids tying up agents with last-minute discussion and credit card transactions, he notes. “Things are better if they are not last-minute,” he says.

The past decade has seen airlines fall in love with fees, often charging for services once included in basic coach fares. Baggage fees began at major airlines in 2008. The fee to change a ticket rose to $200 for domestic trips about four years ago. Fees for many other functions, from carry-on pets to reserving seats together to sending unaccompanied minors, also have increased.

In 2016, U.S. airlines collected $4.2 billion in baggage fees, according to the Bureau of Transportation Statistics, and another $2.9 billion in ticket change and cancellation fees. That $7 billion equaled more than half of the $13.5 billion in total U.S. airline profits for 2016, according to BTS.

Gate-service fees arrive amid continuing confusion over heavily restricted Basic Economy fares. Many shoppers see the lowest prices on comparison-shopping sites and don’t realize those tickets don’t get advanced seat assignments or other basics. Even the name of the fare can be confusing: Isn’t Basic Economy what we’ve been buying all these years when we grab the cheapest coach price? The fares are more bare-bones than basic.

Jay Hines, a project manager for a New York health-care technology company, was warned by United about the Basic Economy baggage limit when he checked in at the airport in early August. He was surprised at so many restrictions on a $485 round-trip fare to Denver, and figured the $50 he paid to check his bag round-trip wiped out any savings. The threat of the gate-service charge added to his anger.

“It’s a little bit cruel and unusual punishment,” he says. “They charge you for checking the bag. They don’t have to impose a penalty.”

Disclosing the intricacies of Basic Economy fares and each airline’s policies, not to mention little-known new fees, becomes difficult for independent travel-sellers. That’s especially true when so much ticket-buying is migrating to phones apps with small screens and limited space for fine print.

At Carlson Wagonlit Travel, a major business-travel vendor, more than 50% of clients have chosen to block Basic Economy fares from displays because those companies decided the restrictions aren’t appropriate for their business travelers. The downside to CWT: not having the lowest fare to display can fuel the perception that third-party websites offer lower prices than corporate booking sites, CWT Chief Executive Kurt Ekert says. And disclosing all the restrictions is nearly impossible, especially on a mobile platform, he says.

Like many, Mr. Ekert wasn’t aware of the $25 gate-service charge.

“There’s no way you can describe that nuance,” he says. In terms of airline strategy, “you could say it’s deceptive, or very intelligent, depending on how you want to describe that,” Mr. Ekert says.

Related video from WSJ: What to Know Before Booking a Flight

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