Sen. Schumer wants airfare investigation

Getty Images

Sen. Charles Schumer (D-N.Y.) is calling for a federal investigation of U.S. airfares amid falling gas prices. 

Schumer, who has frequently criticized airlines fees, said the departments of Transportation and Justice should take a look at the fact that airfares have not fallen as U.S. gas prices have dipped to their lowest levels in years recently. 

“At a time when the cost of fuel is plummeting and profits are rising, it is curious and confounding that ticket prices are sky-high and defying economic gravity,” Schumer said in a statement. “So I’m urging the feds to step in and do a price investigation on behalf of consumers who must buy holiday travel tickets that can break the bank."

ADVERTISEMENT
Schumer added that airlines have previously used increases in gas prices to justifying charging passengers more for flights. 

“The industry often raises prices in a flash when oil prices spike, yet they appear not to be adjusting for the historic decline in the cost of fuel; ticket prices should not shoot up like a rocket and come down like a feather,” he said. “That is why I urge the DOJ and DOT to immediately investigate why airline profits are not more efficiently being passed down to consumers.”

The group that lobbies for airlines in Washington said the financial picture for U.S. carriers was not as cut and dry as Schumer is suggesting. 

“Declining fuel prices are good news for everyone as they lower personal costs and enable industries such as airlines that rely heavily on fuel to reinvest in their business and their customers," Airlines for America said in a statement. "Carriers continue to use improving finances to pay down the nearly $72 billion they are carrying in debt, acquire new aircraft, improve the onboard product, enhance airport facilities and amenities, reward employees through profit sharing and provide dividends to investors.

“While fuel prices have abated from their historic highs, fuel is just one cost, and it’s important to note that for the first nine months for the nine publicly traded U.S. passenger carriers, operating expenses rose 3.1 percent in 2014," the airline group continued. "This is a capital-intensive business, and airlines are making significant investments, including taking delivery of 317 new planes this year alone."  

Consumer groups have criticized airlines for increasing charges for items like checked luggage and flight changes in recent years, although the companies have argued in past years that the fees were necessary to deal with rising gas prices. 

Airlines for America said “air travel remains one of the best consumer bargains, given its superior speed and price compared with other modes of transportation.

"From 2000-2013, U.S. Consumer Price Index rose 35 percent, whereas average domestic airfare rose 15 percent," the airline association said. "Thus, adjusted for inflation, the average round-trip domestic fare fell 15 percent.

"Airlines should be treated like every other business," the group continued. "When the price of coffee beans falls, no one asks Starbucks why his or her latte does not cost less. You want Starbucks to expand its stores and products, give back to its baristas and reward investors. Airlines are no different.”

U.S. airlines made a $3.1 billion profit in the three-month period of 2014 from the beginning of July to the end of September, according to data that was released on Monday by the Department of Transportation.  

The third-quarter profit margin included $960 million from luggage fees and $759 million from charges for reservation changes, according to the Transportation Department’s Bureau of Transportation Statistics. 

—This story was last updated with new information at 11:11 a.m.