Lawmakers warn against bringing the “add-on” aviation fee model to rail transportation

Washington (March 3, 2020) – Senators Edward J. Markey (D-Mass.), Elizabeth Warren (D-Mass.), and Richard Blumenthal (D-Conn.) today sent a letter to Amtrak expressing their concern about the company’s decision to introduce new change and cancellation fees for its two most affordable classes of passenger tickets. Under Amtrak’s new rules, passengers purchasing the lowest-cost “saver” fares will no longer be able to receive a refund or change their tickets 24 hours after their purchase. Meanwhile, travelers on Amtrak’s standard “value” fare will now face a 25 percent penalty for cancellations and a 15 percent fee for changes made within two weeks of departure.

“These policy changes are likely to have the largest impact on passengers who can least afford to pay new fees,” write the Senators in their letter to Amtrak CEO Richard H. Anderson. “Moreover, they also reflect a disturbing move toward the same kind of anti-consumer business practices that are prevalent in the airline industry.”

A copy of the letter can be found HERE.

In their letter, the lawmakers express opposition to replicating the add-on fee model in rail transportation. They also asked Amtrak to answer questions that include:

• How many passengers will be affected by each of these new fees and how much will the average passenger pay towards these fees?
• How does Amtrak expect passengers to benefit from its new fare policies?
• Has there been any appreciable increase in cost when a passenger changes or cancels their ticket since Amtrak previously changed its reservation rules in 2018?
• Does Amtrak intend to introduce new restrictions or fees on baggage, in addition to its new policies for cancellation and ticket changes?

Starting in 2007, many airlines began charging add-on fees for ancillary services like ticket cancellations, reservation changes, and checking bags. Since that time, this business practice has grown exponentially: in 2007, domestic airlines collected $1.4 billion in baggage, cancellation, and change fees; by 2018, this amount skyrocketed to $7.6 billion, an over fivefold increase.

Senator Markey has long called out this anti-consumer business practice because it artificially decreases the base charge for a ticket relative to the true cost of flying, resulting in some passengers actually paying more. Moreover, the charge levied is often unconnected to the actual cost of providing the service.

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