Family Seating in Air Transportation
Regulatory Impact Analysis
RIN 2105-AF15
Office of the General Counsel, Office of Regulation and Legislation
July 2024
U.S. Department of Transportation
Office of the General Counsel
Family Seating in Air Transportation: Regulatory Impact Analysis 1
Executive summary
This regulatory impact analysis evaluates the benefits, costs, and transfers associated with a
Department of Transportation proposed rule to require air carriers to seat children aged 13 and
under next to at least one accompanying adult without charging a separate seating fee. The
proposed rule meets the threshold for a significant regulatory action as defined in section
(3)(f)(1) of Executive Order (E.O.) 12866, “Regulatory Planning and Review,” as amended by E. O.
14094, “Modernizing Regulatory Review,” because it is likely to have an annual effect on the
economy of $200 million or more.
Table ES-1 provides a summary of the economic analysis. Benefits, which we did not quantify,
are due to the reduction in disutility to passengers from separation of families traveling by air.
Families can be reassured that they will be seated together during air travel. Some families
could experience a reduction in stress and anxiety associated with air travel. Passengers who do
not travel with children will no longer be burdened with being seated next to children who are
separated from their parents. Airlines will incur implementation costs, which are quantified.
Because benefits are not quantified, it is not possible to estimate net benefits.
Most quantifiable economic impacts are transfers, which are benefits and costs that have exactly
offsetting effects and do not contribute to the net benefits calculation. The total price of air
travel for families who currently purchase seat reservations will decrease, which creates a
transfer of consumer surplus to them. The elimination of seating fees for families encourages
additional travel and airfares will increase. Solo passengers and families who do not currently
purchase seat reservations will lose consumer surplus due to the airfare increase. The increase
in in airfare offsets the increase in consumer surplus to families who pay for seat reservation in
the baseline, but the effect is small. Airlines initially will incur revenue losses as well.
An important determinant of the quantifiable impacts is the percentage of passengers who
purchase seat assignments in the baseline. This percentage is not known with certainty, and we
apply market research that suggests about 37 percent of consumers might be willing to pay for
a seat reservation. The 37 percent is applied to the estimated 9.7 percent of passengers who
travel as families as well as the remaining 90.3 percent of passengers who travel solo.
Evaluation of the transfers created by the proposed rule provide insight into its distributional
consequences. There is a gain in consumer surplus to families due to elimination of their
seating fees and a loss in consumer surplus to other passengers from higher fares. We estimate
that that the proposed rule would initially reduce airline revenue by about $85 million in the first
year after full implementation.
Family Seating in Air Transportation: Regulatory Impact Analysis 2
Table ES-1: Summary of economic impacts, first year (2022$, millions)
Benefits (+)
Reduced disutility to passengers from separation
of families traveling by air
Unquantified
Costs (-)
Implementation costs
$5-21
Net societal benefits (costs)
Not applicable
Transfers (0)
Increase in consumer surplus from elimination of
seating fees for families (airlines to families)
$910
Decrease in consumer surplus for solo air
passengers (solo passengers to airlines)
$760
Decrease in consumer surplus for families who do
not pay for seat reservations in the baseline
(families to airlines)
$51
Airline revenue loss (airlines to consumers)
$85
Family Seating in Air Transportation: Regulatory Impact Analysis 3
Contents
1 Introduction ............................................................................................................................................. 4
2 Need for regulation ................................................................................................................................ 4
3 Requirements of the proposed rule .................................................................................................... 5
4 Baseline for the analysis ......................................................................................................................... 6
4.1 Current family seating policies ................................................................................................................ 6
4.2 Airline passengers who travel as families ............................................................................................ 8
4.3 Seating fee revenue and charges ........................................................................................................... 9
5 Economic impacts of the proposed rule ...........................................................................................11
5.1 Framework for analysis ............................................................................................................................ 11
5.2 Price effects .................................................................................................................................................. 14
5.3 Benefits .......................................................................................................................................................... 16
5.4 Costs ............................................................................................................................................................... 17
5.5 Transfers ........................................................................................................................................................ 21
5.5.1 Consumer surplus gains for families who currently pay for seat reservations .......... 21
5.5.2 Reduction in consumer surplus due to airfare increases................................................... 21
5.5.3 Revenue effects ................................................................................................................................. 22
5.6 Comparison of benefits and costs ....................................................................................................... 22
5.7 Additional impacts .................................................................................................................................... 22
5.8 Sensitivity analysis ..................................................................................................................................... 24
6 Regulatory alternatives ....................................................................................................................... 24
6.1 No action ...................................................................................................................................................... 24
6.2 Guaranteed family seating without fee restrictions ...................................................................... 25
7 Summary ................................................................................................................................................. 25
Appendix A Implementation cost estimates at 3 and 7 percent discount rates ......................... 27
Family Seating in Air Transportation: Regulatory Impact Analysis 4
1 Introduction
This rulemaking would amend 14 CFR Part 259, Enhanced Protections for Airline Passengers, to
require air carriers to seat children aged 13 and under next to at least one accompanying adult
without charging a separate seating fee. This final rule meets the threshold for a significant
regulatory action as defined in 3(f)(1) of E.O. 12866, “Regulatory Planning and Review
,”
1
and
amended by E.O. 14094, “Modernizing Regulatory Review”
2
because it is likely to “have an
annual effect on the economy of $200 million or more.” This regulatory impact analysis (RIA)
evaluates benefits, costs, and other economic effects of the rule.
In conducting this analysis, the Department engaged an expert in the economics of the airline
industry, and this RIA draws heavily from the expert analysis. Specifically, we asked the expert to
identify primary economic impacts, quantify key values needed to evaluate those economic
impacts, and provide a quantitative analysis of the primary impacts to consumers and airlines of
a policy that prohibits airlines from charging a fee for families to be seated together. The expert
report (“expert report”) has been added to the rulemaking docket.
3
2 Need for regulation
The Department views family seating as a basic service that should be provided to passengers
without a separate fee for advance seat selection. Most airlines say that their gate agents and
flight crew will attempt to seat families together during the boarding process, but not all
guarantee family seating unless travelers have purchased seat assignments in advance or
purchased a fare with seat assignment included. Airlines often recommend that families who
need to be seated together consider paying the advance seat assignment fee to be assured of
adjacent seating. The Department is concerned about the stress and anxiety experienced by
families when they are not able to ensure family seating in advance of travel.
Many U.S. airlines offer basic economy, or another equivalent low-cost ticket that comes with
more limitations than a standard economy ticket. These low-cost economy ticket options may
not allow passengers to select a specific seat assignment. If a passenger wants to ensure a
specific seat assignment in advance of the flight, such as a window or aisle seat or being next to
a child, many carriers advise consumers who purchase low-cost economy tickets to either pay an
advance seat assignment selection fee, or purchase seats in a higher fare class that permits the
passenger to select a seat assignment. Most carriers have indicated to the Department that they
1
https://archives.federalregister.gov/issue_slice/1993/10/4/51724-51752.pdf#page=12
2
https://www.federalregister.gov/documents/2023/04/11/2023-07760/modernizing-regulatory-review
3
Forbes, Silke (October 2023). “Expert Report on the Current Status of Family Seating Fees and the
Potential Economic Impacts of a Prohibition.”
Family Seating in Air Transportation: Regulatory Impact Analysis 5
would try to make accommodations at the airport to ensure that families are seated together,
regardless of the fare purchased by the passenger. Nonetheless, passengers who purchase low-
fare economy tickets for their family have reported having trouble when attempting to obtain
family seating at the gate.
Not all passengers are willing to pay the seating fees that airlines charge for a seat assignment.
Some passengers have no need for a specific seating arrangement, but some may be unaware
that the ticket purchased does not include a specific seat assignment. An Ipsos survey carried
out on behalf of Airlines for America in January 2023 asked participants who had purchased a
fare that did not include carry-on baggage or seat selection if they were aware these services
would have additional charges.
4
Of the respondents, only 85 percent said that they were fully
aware meaning that a significant minority of consumers was unaware of the additional charges
for services like carry-on baggage or seat assignment. This suggests that lack of information
could contribute to family seating problems.
Families who do not have prior seating arrangements, either because they are unaware of airline
seating policies or believed that they would be seated together despite having chosen not to
pay for a seat assignment, could experience stress or anxiety if they arrive at the gate to find
that they are seated away from a child. Other passengers might be burdened by being seated
next to children who are separated from their parents and might need assistance. Even where
accommodations can be made at the gate or onboard the aircraft to allow families without
advance seat assignments to sit together, doing so may require other passengers to give up
their seat for another, potentially less desirable one, imposing a cost on those travelers. The seat
switching process also creates a transaction cost on all parties involved that could be avoided if
the family had been assigned seats together. Some effects of airline family seating policies are
not fully internalized in the market and are a potential source of market failure.
3 Requirements of the proposed rule
This rulemaking would amend 14 CFR Part 259, Enhanced Protections for Airline Passengers, to
require U.S. and foreign air carriers to seat children aged 13 and under next to at least one
accompanying adult without a separate charge. There are certain limited exceptions, for
example, if the number of children on the reservation makes compliance not possible. The
proposed rule requires carriers to disclose their family seating policies clearly on their public-
facing websites and over the phone and to provide instructions for consumers to secure family
seating. The disclosure must include any check-in or boarding requirements that might impact
a family’s ability to be seated together.
4
See https://www.airlines.org/dataset/air-travelers-in-america-annual-survey/ .
Family Seating in Air Transportation: Regulatory Impact Analysis 6
The proposed rule also provides for the case where family seating is unavailable at the time of
booking. If the flight is purchased more than 2 weeks before departure, airlines must give
passengers the option within 7 days to receive a refund or wait for available family seating. If the
flight is purchased less than 2 weeks before departure, the airline must give passengers the
same options as soon as practicable after the ticket has been purchased. In the event an airline
is unable to provide adjacent seating, the proposed rule would require airlines to provide an
accompanying adult the choice of:
• rebooking on the next available flight with adjacent seats for the young child and an
accompanying adult as well as any other person on the same reservation;
• a full refund of the cost of the tickets for the young child and an accompanying adult
as well as any other person on the same reservation; or
• continuing their original transportation without adjacent seats.
The proposed rule also defines an open seating carrier as a carrier that does not assign seats or
does not allow an individual to select seats on a flight in advance of the date of departure of the
flight. Open seating carriers would be required to board passengers in a manner that allows for
family seating.
4 Baseline for the analysis
4.1 Current family seating policies
Several U.S. carriers have implemented family seating policies that allow young children to be
seated next to an adult traveling on the same reservation. All carriers have posted statements
saying that they will make an effort to seat families together, but not all of them guarantee that
families will be seated together in all circumstances. Frontier, American, Alaska Airlines, and
JetBlue are U.S. carriers that guarantee family seating. Among the largest foreign carriers,
several guarantee advance seat reservations at no additional charge for young children and an
adult traveling on the same reservation. Some foreign carriers have no information on family
seating available on their U.S. websites.
Table 4-1 provides a summary of family seating policies for U.S. carriers. Together, these airlines
and their operating partners accounted for approximately 85 percent of domestic passenger air
traffic in 2022. American, Alaska, JetBlue, Delta, Hawaiian, and United offer several different fare
classes: Basic Economy, Economy, Premium Economy, and First/Business Class. However, some
of these airlines do not offer Basic Economy and Premium Economy on all itineraries. Except for
Basic Economy, seat
Family Seating in Air Transportation: Regulatory Impact Analysis 7
Table 4-1: Overview of family seating policies of major U.S. carriers
Airline Statement on family seating
Alaska Airlines “Alaska guarantees that children 13 and under will be seated with at least one
accompanying adult, subject to certain conditions. Please contact us or check with an
airport agent as soon as possible to review available seating options.”
Allegiant Air “While we will do our best to accommodate families, the availability of seats together
cannot be guaranteed. To ensure that your party is seated together, we recommend
reserving seats when you book your travel.”
American Airlines “Seats for your family: Keep in mind, if you can't find seats together now, we'll do our
best to find them for you before the day of departure. If seats are limited, we'll assign
seats so children are next to at least 1 adult in your party.”
Delta Airlines “Delta strives to seat family members together upon request. If you are unable to obtain
seat assignments together for your family using delta.com or the Fly Delta mobile app,
please contact Reservations to review available seating options.”
Frontier Airlines “When one or more of the passengers on a reservation are 13 years of age or younger,
Frontier will guarantee adjacent seats for the child or children and an accompanying
adult (over age 13) at no additional cost for all fare types subject to limited conditions
specified below.”
Hawaiian Airlines “We'll do our best to seat children under age 14 with an accompanying family member.
Select your own seats as far in advance as possible by logging in to My Trips. If no
suitable seats are available online, let our agents know when you get to the airport, and
they'll do their best to reseat you.”
JetBlue Airways “We will always do our best to seat children with an adult family member.  For the best
seating options, we recommend booking early and selecting seat assignments at the
time of booking or with a reservation crewmember (third party service fees may apply). If
seats together are not available, please let our airport gate crewmembers know when
you arrive at the airport. They will do their best to find a seating solution. We cannot
guarantee that seats together will always be available.”
Southwest Airlines “Family boarding after A group for adults with children under 6. If you need and request
assistance, Southwest will endeavor to seat a child next to one accompanying passenger
(14 and older) to the maximum extent practicable and at no additional cost.”
Spirit Airlines “If Guests with children aged 13 and under do not opt to pre-select seats at the time of
booking, our gate agents and Flight Attendants will work to provide adjacent seats when
possible.”
United Airlines “If you’re flying with children under 12, we have new tools that make it easier for them to
sit next to a family member for free. This includes families who have Basic Economy
tickets. If seats next to each other aren’t available on your flight because of last minute
bookings or unscheduled aircraft changes, you can switch to another flight with
availability in the same cabin for free and won’t be charged for the difference in fare.”
Family Seating in Air Transportation: Regulatory Impact Analysis 8
selection is included in the fare, subject to the availability of seats. American and JetBlue offer
advance seat reservations for a fee to customers who purchase Basic Economy tickets. Alaska,
Delta, Hawaiian, and United do not offer any advance seat reservations on Basic Economy fares.
Allegiant, Frontier, and Spirit do not include advance seat reservations in their basic fares.
Passengers can purchase advance seat reservations for a fee, either as a standalone add-on or in
a bundle with other services such as baggage or onboard beverages. Southwest does not assign
seats in advance of boarding. Passengers board in priority groups based on ticket type and time
of check-in. Travelers can purchase access to the first priority group for a fee, subject to
availability.
Families who do not arrange seating assignments prior to travel, either by paying a seating fee
or exercising an alternative to the fee that some airlines may offer, run the risk of arriving at the
gate and finding that a child may be seated way from an accompanying adult. Families must
then rely on gate agents, flight attendants, or perhaps other passengers to accommodate their
needs for specific seating arrangements.
4.2 Airline passengers who travel as families
The proposed rule would require that airlines distinguish passengers traveling with children
from other passengers. Regarding seat assignments, we assume that passengers traveling with
children currently are treated as all other passengers though as noted, airlines make some effort
to address family seating issues when they arise. Table 4-2 provides Bureau of Transportation
Statistics (BTS) data on the number of airline passengers by airline in 2022. We use 2022 as the
baseline number of passengers potentially affected by the rule.
Airlines that currently do not distinguish passengers traveling as a family from other passengers
will need to develop those capabilities. For this analysis, we consider a family to consist of
children under the age of 14 traveling by plane with persons who are at least 14 years old. We
assume that the proposed rule will require that airlines match one adult with one child (“adult-
child pair”). If a trip involves three children and two adults from the same household, the
number of adult-child pairs would be two, with one adult being seated with two children and
the other adult being seating with one child. If one child travels with two adults, the number of
adult-child pairs would be one. The proposed rule would not require that the entire family are
seated together, just that each child is matched with an accompanying adult. We term all other
passengers—i.e., those not traveling as an adult-child pair—"solo passengers.” The important
distinction between adult-child pairs and solo passengers is that solo passengers remain eligible
to be charged a separate seating fee under the proposed rule.
Disaggregating the data on overall airline passengers to estimate the number of adult-child
pairs versus solo passengers involved several steps. Estimates are derived from publicly available
Family Seating in Air Transportation: Regulatory Impact Analysis 9
Table 4-2: Number of airline passengers in 2022
Carrier
International
Total
Alaska Airlines
1,913,336
31,791,458
Allegiant
41,892
16,869,104
American Airlines
30,306,916
150,861,364
Delta
19,420,112
141,904,752
Frontier
2,048,582
25,463,654
Hawaiian
361,388
9,998,405
JetBlue
9,115,926
39,624,024
Southwest
3,846,000
157,007,568
Spirit
4,557,293
38,407,505
United
25,209,342
112,653,870
Other Domestic Carriers
6,192,576
131,379,856
Total
103,013,363
855,961,560
Source: Air Carrier Statistics (Form 41 Traffic) T-100 data.
data, including the BTS American Travel Survey (ATS) and Air Carrier Statistics (Form 41 Traffic)
T-100 data, and the Census Bureau’s population statistics. Additional estimates are based on the
U.S. Family Travel Survey conducted by the Jonathan M. Tisch Center of Hospitality at New York
University.
5
The ATS collected trip-level information on the mode of transport and the ages of traveling
household members. However, BTS conducted the ATS in 1995 and it is necessary to adjust for
demographic composition changes since 1995. The adjustment factors are derived from Air
Carrier Statistics (Form 41 Traffic) T-100 data and the Census Bureau’s population statistics.
Updating the ATS with more recent air passenger and Census data is discussed in the expert
report (“Estimates Based on the American Travel Survey,” pp. 11-13), which provides the result
that roughly 9.7 percent of air passengers consist of adult-child pairs. Using the passenger totals
reported in Table 4-2, roughly 83 million travelers (73 million on domestic and 10 million on
international flights) on U.S. carriers are part of an adult-child pair. The remaining 773 million
passengers are solo passengers and remain eligible to be charged seating fees under the
proposed rule.
4.3 Seating fee revenue and charges
BTS collects data on airline revenue from fees for baggage and reservation changes and
cancellation, but not from seating fees. Another source of information on airline revenue is the
5
See Appendix 2 for links to the datasets.
Family Seating in Air Transportation: Regulatory Impact Analysis 10
airlines’ 10-k annual reports filed with the Securities and Exchange Commission. In general,
airlines include revenues from seating fees in the passenger revenues reported in the 10-k
statements. Alaska Airlines, Allegiant Air, Delta Airlines, Southwest Airlines, and United Airlines
report revenues from ancillary fees, but not seat reservation fees, separately from other
passenger revenues in their 10-k reports. These ancillary fees include charges for checked
baggage, changed or canceled reservations, in-flight purchases, and seat reservations. American
Airlines, Hawaiian Airlines, and JetBlue Airlines do not break out revenues from ancillary fees or
from seat reservation fees in their 10-k reports.
Two airlines, Spirit and Frontier, report revenues from seat reservation fees as separate line
items. Based on their information, the estimated seating fee revenue per passenger was
approximately $9.43 in 2022. This estimate is the arithmetic mean between Frontier’s reported
seating fee revenue per passenger and Spirit’s estimated revenue per passenger. The average
includes passengers who did not make an advance seat reservation and paid $0 as well as other
passengers who paid a value greater than $9.43 for their seats. As shown in Table 4-2, U.S.
airlines transported 856 million air travelers in 2022. This means that the industrywide revenue
collected from seating fees could amount to about $8.1 billion annually ($9.43 * 856 million).
This estimate assumes that seating fee revenues for Spirit and Frontier are representative of the
industry as a whole. However, Spirit and Frontier are low-cost carriers which tend to rely more
on seat selection fee revenue than legacy carriers. Thus, we are likely overestimating industry-
wide seating fee revenue by using this approach.
The average cost of a seat reservation per person, for those who make a reservation, is not
reported in publicly available data but can be inferred by applying other market information. A
survey conducted by Skyscanner in 2022 found that 37 percent of U.S. respondents would be
willing to pay a fee for advance seat selection.
6
If 37 percent of travelers purchase advance seat
assignments and the average revenue per passenger is $9.43, then the average fee per
reservation must be $25.49 (0.37 * $25.49 = $9.43). The represents the seating fee for each
direction of travel so that passengers with a roundtrip ticket pay two times that amount, or
$50.98. Note that the Skyscanner estimate is based on a survey question about international
travel, and we are assuming that that passengers are equally likely to purchase a seat reservation
on domestic and international flights. We request comment on this estimate and seek data to
better estimate the number or percentage of passengers who purchase seat reservations, and
whether that percentage is different for passengers who travel as a family.
6
See https://www.partners.skyscanner.net/hubfs/Reports/Horizons-Nov2022.pdf .
Family Seating in Air Transportation: Regulatory Impact Analysis 11
5 Economic impacts of the proposed rule
5.1 Framework for analysis
To evaluate the economic impacts of the proposed rule, we apply a simple model of air travel
demand that groups air consumers into two categories: adult-child pairs and solo passengers.
To simplify the analysis, we assume that the overall number of tickets sold does not change as a
result of the proposed rule. That is, if the proposed rule induces any change in the number of
adult-child pairs that travels, that change is exactly offset by a change in the number of solo
passengers. This simplifies the analysis by constraining the resulting effects to fall in the
category of transfers. Transfers are benefits and costs that have exactly offsetting effects and do
not contribute to a net benefits calculation.
The proposed rule requires that airlines seat a child with an adult and prohibits them from
charging a separate seating fee. Initially, we assume that the airlines have technical capabilities
that allow them to distinguish between the two groups of passengers. Developing the
capability is an upfront cost to airlines who do not have family seating policies currently, which
we estimate separately in Section 5.4.
Once airlines can distinguish between adult-child pairs and solo passengers, the proposed rule
affects the two groups of passengers differently. For the families who pay seating fees in the
baseline, the effect of the elimination of those seating fees is to reduce the total price of air
travel. In Figure 5-1, airlines charge families a fare of P
0
plus a seating fee of t in the baseline,
which results in families purchasing Q
airline tickets. If airfares remain unchanged, the
elimination of t would cause the quantity of airline tickets demanded by families to increase to
Q

. However, the increase in tickets purchased by families will put upward pressure on base
airfares, which increase to P
1
. As detailed in the expert report, the expected increase in airfare is
calculated by applying demand elasticities to estimates of baseline airfares, seating fees, and
numbers of adult-child pairs and solo passengers. Under the proposed rule, airlines will not be
allowed to charge families seating fees, so the total price of air travel to families becomes P
1
,
and families purchase Q
airline tickets. The quantity of tickets purchased is greater than in the
baseline scenario, but less than if airfares did not adjust.
The decrease in price increases consumer surplus for families by the area A+B in Figure 5-1.
Part of this increase would come from the reduction in the price paid by families who would
have flown even if they had to pay for advance seat reservations (area A). This part is a revenue
loss from the perspective to airlines, which is offset to an extent by the increase in number of
families who travel at the lower price, or area C in Figure 5-1. The remaining increase in
consumer surplus comes from families who would not travel if they had to pay for advance seat
Family Seating in Air Transportation: Regulatory Impact Analysis 12
Figure 5-1: Demand for air travel (adult-child pairs)
reservations but travel by air under the proposed rule because they do not have to pay for seat
reservations (area B).
The proposed rule will also affect airfares for and the quantity of tickets sold to solo passengers
as shown in Figure 5-2. We assume that the proposed rule does not affect the amount of the
seating fee, and that the total price for solo passengers increases from P
0
+ t to P
1
+ t due to the
proposed rule. The increase in airfare reduces the quantity of tickets purchased by solo
passengers from Q
to Q
and solo passengers experience a decrease in consumer surplus in the
amount of the area A′ + B′. Part of the decrease in consumer surplus comes from passengers
who purchase tickets even after the price increase (area A′). This part of the reduction in
consumer surplus is a gain in revenue to the airlines, which is offset by a loss due to a lower
number of solo passengers (area C′). The remaining decrease in consumer surplus comes from
passengers who choose to no longer travel because of the price increase (area B’).
Figure 5-3 illustrates how we record these impacts in the social accounting ledger, and provides
the basic guidance for quantifying these effects.
Family Seating in Air Transportation: Regulatory Impact Analysis 13
Figure 5-2: Demand for air travel (solo passengers)
Figure 5-3: Social accounting ledger for recording economic impacts
Party
Gains
Losses
Change due to proposed rule
Families traveling by air
A + B
A + B
Solo passengers
A′ + B′
- (A′ + B′)
Airlines
A′ + C
A + C′
(A′ + C) – (A + C′)
As noted, this analysis assumes that the equilibrium number of tickets, Q
, sold does not change
because of the proposed rule, or that
Q
= Q
+ Q
= Q
+ Q
.
This means that, in the absence of other market effects,
P
= P
+ t =
P
+
(P
+ t) .
More specifically, due to the restriction that the overall equilibrium number of tickets sold does
not change under the proposed rule, we expect that the average market airfare, P
, will remain
at its baseline level in this simplified model. While the proposed rule may create an initial
disturbance away from equilibrium price, the tendency will be for the market to return to the
Family Seating in Air Transportation: Regulatory Impact Analysis 14
previous equilibrium. Ultimately, overall airline revenue will remain unchanged because the
equilibrium number of passengers and average ticket prices, Q* and P
*
remain unchanged.
Relative prices paid by families and solo passengers will adjust such that consumer surplus gains
are exactly offset by consumer surplus losses. For this reason, we view many of the economic
effects estimated below as transitory.
In reality, airlines are not constrained to operating within the simple model because they have
other options besides adjusting airfares. These other options include adjusting the seating fees
or any other existing or new fee.
5.2 Price effects
Price effects can be estimated applying information regarding the nature of the demand curve
for air travel. Several studies provide estimates of the price elasticities of demand in the U.S.
airline industry. The RIA for Accessible Lavatories on Single-Aisle Aircraft applied the values of -
1.2 for domestic travel and -0.6 for international travel in the primary analysis and conducted
sensitivity analyses for lower and higher elasticities. This analysis applies the same values in the
primary analysis, but other values are examined as part of a sensitivity analysis. In particular, the
sensitivity analysis examines elasticities ranging from -0.8 to -2.0 for domestic travelers and from
-0.6 to -2.0 for international travelers, as detailed in the appendix.
Because the overall number of available tickets available in the market is assumed to be
unaffected by a proposed rule, the increase in the number of airline tickets purchased by adult-
child pairs is equal in absolute value to the decrease in the in the number of airline tickets
purchased by solo passengers. Average overall ticket price will increase to equilibrate supply
and demand under the proposed rule, but adult-child pairs experience a lower effective price
than in the baseline because they will no longer pay for advance seat reservations. Ticket prices
will increase for solo passengers.
Price increases due to the proposed rule are estimated by applying the demand elasticities to
baseline passenger levels, ticket prices, and estimated seating fees. Average ticket prices in the
baseline are estimated to be $248.64 for domestic flights and $560.68 for international flights.
7
From Section 4.2, the baseline number of adult-child pairs is 72.8 million and the number of solo
passengers is 680.1 million on domestic flights. The estimated increase in price also depends on
the percentage of travelers who make advance seat reservations.
7
Average domestic airfare is based on data for the first quarter of 2023 from the Bureau of Transportation
Statistics, Airline Origin & Destination Survey. Average international airfare is estimated using FAA
forecasts. Details regarding these calculations are provided in the expert report (Appendix 3, p. 39).
Family Seating in Air Transportation: Regulatory Impact Analysis 15
Table 5-1 and Table 5-2 summarize the calculations under a scenario in which 37 percent of all
passengers, both families and solo passengers, purchase seat reservations. The average airfare
increase will range from $0.86 per direction for domestic travelers and $1.93 for international
travelers. Given ticket prices of $248.64 for domestic travel and $560.68 for international travel,
these price changes are equivalent to a price increase of about 0.3% of baseline airfare.
Table 5-1: Summary of price effects for domestic flights
Adult-child pairs
Solo passengers
Purchasing
Seats
Not Purchasing
Seats
Purchasing
Seats
Not Purchasing
Seats
Baseline number of passengers (millions)
26.9
45.8
251.7
428.5
Baseline airfare
$274.13
$248.64
$274.13
$248.64
Price under proposed rule
$249.50
$249.50
$274.99
$249.50
Airfare change (baseline airfare – price
under proposed rule)
-$24.63 $0.86 $0.86 $0.86
Percent airfare change
-9.0%
0.3%
0.3%
0.3%
Price elasticity of demand
-1.12
-1.12
-1.12
-1.12
Percent change in number of passengers
10.5%
-0.4%
-0.4%
-0.4%
Change in number of passengers (millions)
2.8
-0.2
-1.0
-1.7
Number of passengers under proposed rule
29.8
45.7
250.8
426.8
Table 5-2: Summary of price effects for international flights
Adult-child pairs
Solo passengers
Purchasing
Seats
Not Purchasing
Seats
Purchasing
Seats
Not Purchasing
Seats
Baseline number of passengers (millions)
3.6
6.2
34.5
58.7
Baseline airfare
$618.16
$560.68
$618.16
$560.68
Price under proposed rule
$562.61
$562.61
$620.09
$562.61
Airfare change (baseline airfare – price
under proposed rule)
$55.55
-$1.93
-$1.93
-$1.93
Percent airfare change
-9.0%
0.3%
0.3%
0.3%
Price elasticity of demand
-0.6
-0.6
-0.6
-0.6
Percent change in number of passengers
10.5%
-0.4%
-0.4%
-0.4%
Change in number of passengers (millions)
0.2
-0.0
-0.1
-0.2
Number of passengers under proposed rule
4.0
6.2
34.4
58.5
Family Seating in Air Transportation: Regulatory Impact Analysis 16
Despite the increase in base airfare, passengers who travel as a family and currently purchase
advance seat reservations would experience a decrease in the price of air travel because they
would no longer have to pay for seat reservations. Given the average seat reservation fee of
$25.49 for domestic travelers and $57.48 for international travelers, the full ticket price including
seat reservations for families will decrease about $24.63 for domestic travelers and about $55.55
for international travelers. This is equivalent to an average price reduction of roughly 9 percent.
The analysis assumes that total passenger traffic does not change, at least in the short run.
However, due to differential price changes, the mix of passengers between adult-child pairs and
solo passengers changes in the analysis. The number of passengers who travel with a child
under the age of 14 increases roughly 10 percent while the number of solo passengers
decreases about 0.4 percent.
5.3 Benefits
Benefits are due to the reduction in disutility experienced by consumers from the separation of
families on aircraft. Families traveling by air who do not purchase advance seat reservations or
make other arrangements with the airlines to ensure that they are seated together would
experience improved mental health because children and parents will no longer suffer from
anxiety related to their separation on the plane. Complaints submitted by travelers to the
Department reveal general concerns about young children being separated from their parents
and specific issues relating to children’s and adults’ anxiety.
8
Families also will save time if they no longer need to contact the airline or a gate agent to obtain
seats together. Currently, airlines that do not guarantee that they can seat families together
often recommend contacting the airline as soon as possible after booking to make seat
reservations or work with a gate agent at the airport. Airline call center wait times vary and
depending on whether there are service disruptions, call wait times can be significant. Gate
agents have many responsibilities and may have limited ability to make seating adjustments.
For families who purchase seating assignments in the baseline, these types of benefits would be
limited. We assume that the airlines largely honor these arrangements. However, there could be
some benefits for these families in cases of rebooking or situations where an airline might need
to reassign seats.
Passengers who do not travel with children could also experience benefits that we have not
quantified. In the status quo, some travelers might end up seated next to children who are
separated from their parents. If the separated children suffer anxiety or need assistance, the
passengers seated next to them likely are affected.
8
See https://www.regulations.gov/document/DOT-OST-2022-0109-0023
Family Seating in Air Transportation: Regulatory Impact Analysis 17
The proposed rule also requires that the airlines provide information on family seating to
consumers. Given that the airlines already provide family seating information as shown in Table
4-1 and that the proposed rule requires that the airlines provide family seating regardless of
whether the consumer is aware of those polices, the additional benefits from the information
requirements are probably limited. More specifically, this analysis assumes that the actual
requirement to provide family seating would largely override the need for families to collect
information about family seating, and that the information requirements would not provide an
independent benefit.
5.4 Costs
The proposed rule will require that airlines distinguish families from other passengers in
assessing seating fees, which will involve some upfront resource costs. Four airlines – Alaska,
American, Frontier, and JetBlue – implemented policies that guarantee family seating in 2023.
We do not have information of the costs of implementing these systems and assume that the
airlines with guaranteed family seating will not incur any additional costs. In addition, Southwest
Airlines does not allocate seats in advance, but would need to adjust boarding procedures to
assure for family seating for parties traveling with children between 7 and 13 years old. We do
not have an estimate of the costs of changes to open boarding procedures and those costs are
not included in the analysis.
A system to ensure family seating would identify bookings with children under 14 and
accompanying adults and allow those individuals to reserve seats together in advance with no
separate charge. Airlines would need to personalize the pricing of seats based on the ages of
the individuals in a reservation. Once this capability is implemented, there should not be other
ongoing costs.
The airline industry is transitioning to personalized pricing to tailor ticket prices or ancillary fees
to the customer’s identity or purchase history.
9
The International Air Transport Association
(IATA) has developed the “New Distribution Capability” (NDC), which is a data transmission
standard that facilitates communication between airlines and third-party sellers, such as travel
agents.
10
Importantly, the NDC enables dynamic and personalized fare offers including
individualized pricing of ancillary services. According to IATA, American, Delta, Southwest, Spirit,
and United have NDC capabilities.
11
9
See, for example, Fiig, Le Guen, and Gauchet (2018), “Dynamic Pricing of Airline Offers”, Journal of
Revenue Pricing Management, https://doi.org/10.1057/s41272-018-0147-z
10
See https://www.iata.org/en/programs/airline-distribution/retailing/ndc/ .
11
See, for example, https://www.sabre.com/insights/new-distribution-capability for more detail.
Family Seating in Air Transportation: Regulatory Impact Analysis 18
The NDC is a communication standard for third-party bookings, not a method for pricing tickets
sold directly by airlines. Airlines will need to implement seat reservation policies for qualifying
families in their own internal reservation systems as part of a personalized pricing strategy. Once
personalized pricing is implemented in internal systems, the NDC should allow airlines to
implement the same pricing for third-party bookings. The system will allow airlines to maintain a
different fee structure for families versus other travelers.
A 2019 report by the management consulting firm McKinsey & Company outlines a possible
transition from the traditional flight distribution system to personalized pricing with NDC-based
distribution.
12
The report estimates that the transition would cost the global airline industry
(including airlines outside the United States) about $3 billion. A 2021 report by IATA calculates
that this is equivalent to about 10 percent of current airline information technology spending.
NDC exceeds the capabilities needed for airlines to offer personalized pricing as it pertains to
family seating. However, we use the costs of implementing NDC to approximate the costs of
implementing the proposed family seating rule, recognizing that this may lead to an
overestimate of implementation costs.
Delta is the only airline that includes IT-related expenses (specifically, the amortization of
capitalized software) separately from other expenses in its 10-k annual reports. From Delta’s
2019 and 2022 annual reports, average amortized expenses of capitalized software over the
years 2017-2022 is $286 million as shown in Table 5-3. This amounts to $2.02 ($2022) per
passenger using Delta’s passenger numbers.
Industry-wide implementation costs depend on the number of airlines that need to make IT
upgrades that allow for family seating. As noted, four airlines (Alaska, American, Frontier, and
JetBlue) have already guarantee family seating and are assumed to incur no further costs. Also,
Southwest does not assign seating and is also not assigned costs.
Among the remaining airlines, those that already have NDC capabilities (Hawaiian, Spirit, and
United) will have lower costs that those that have yet to adopt NDC capabilities (Allegiant and
Delta). One estimate of implementation assumes that all airlines that have adopted the NDC
standard have also already implemented personalized pricing. A second estimate assumes that
airlines that have adopted the NDC standard have not yet adopted personalized pricing. These
estimates represent upfront one-time expenses, and we assume that that once implemented,
any ongoing maintenance will be conducted as part of overall IT maintenance and there will be
no recurring maintenance costs.
12
See https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/airline-
retailing-the-value-at-stake .
Family Seating in Air Transportation: Regulatory Impact Analysis 19
Table 5-3: Delta Airlines’ amortized expenses of capitalized software, 2017-2022
Year
Current $
(millions)
2022 $
(millions)
Total passengers
(millions)
2022 $ per
passenger
2017
187
225
145.4
1.55
2018
205
242
151.9
1.59
2019
239
276
162.5
1.70
2020
304
346
55.2
6.27
2021
301
320
103.1
3.10
2022
307
307
141.9
2.16
Average
286
2.02
Sources: Delta Airlines’ 2019 and 2022 10-k annual report, Air Carrier Statistics (Form 41 Traffic) T-100 data.
Note: Expenses reported in current dollars are not adjusted for inflation. The third column adjusts all expenses for
inflation by converting them to 2022 dollars. The average cost per passenger uses the 2022 passenger numbers.
Allegiant and Delta still need to implement NDC and personalized pricing capabilities. Summing
the product of the IT cost of $2.02 per passenger and the number of passengers in 2022 (see
Table 4-2) for each airline yields an estimated total IT cost of $320 million. Applying the
McKinsey estimate that the costs of implementing the NDC and personalized pricing are 10
percent of IT costs results in an estimated implementation cost of $32 million.
A second estimate assumes that the airlines that have already implemented the NDC still need
to implement personalized pricing, and that the cost of implementing personalized pricing is 50
percent of the full implementation costs. The estimated implementation costs for Hawaiian,
Spirit, and United in this scenario are $16.2 million. Adding this to the implementation costs of
the non-NDC-capable airlines results in an industry-wide implementation cost of $48.2 million.
The implementation costs are upfront costs that are incurred only once. We present two
scenarios in which these one-time costs are annualized over 5- and 10-year periods using a 2
percent discount rate (Table 5-4). Annualized implementation costs range from $6.8 million to
$10.2 million over 5 years, and $3.6 million to $5.4 million over 10 years.
While it is reasonable to expect that carriers’ implementation costs scale with carrier size, we
could alternatively assume that all carriers face the same fixed implementation cost. To estimate
industry-wide costs in this case, we start by taking the 5-year average annual IT-related costs for
Delta ($283 million) and assume that all carriers spend an equivalent amount. As before, we
assume that non-NDC-capable airlines (Delta and Allegiant) will need to spend 10 percent of
their annual IT-related expenditure to develop personalized pricing, while NDC-capable airlines
(Hawaiian, Spirit, and United) will need to spend 5 percent.
The estimated implementation costs of the proposed rule, assuming equivalent costs across all
airlines, are presented in Table 5-5. Again, we present annualized costs over 5- and 10-year
Family Seating in Air Transportation: Regulatory Impact Analysis 20
Table 5-4: Implementation costs per airline, scaled by carrier size
Total passengers
(2022, millions)
Implementation costs
(2022 $, millions)
Annualized
Airline
Total
5 years
10 years
Non-NDC-capable airlines
158.8
32.0
6.8
3.6
Allegiant
16.9
3.4
0.7
0.4
Delta
141.9
28.6
6.1
3.2
NDC-capable airlines
161.1
16.2
3.4
1.8
Hawaiian
10.0
1.0
0.2
0.1
Spirit
38.4
3.9
0.8
0.4
United
112.7
11.4
2.4
1.3
Implementation cost
Estimate 1 (Only non-NDC airlines incur costs)
158.8
32.0
6.8
3.6
Estimate 2 (NDC airlines incur 50% cost)
319.9
48.2
10.2
5.4
Sources: Delta Airlines’ 2019 and 2022 10-k annual report, Air Carrier Statistics (Form 41 Traffic) T-100 data.
Note: Total cost of implementation is estimated to be 10% of total IT cost ($2.02 per passenger) for airlines that do not
yet have NDC capabilities (Estimate 1), and 5% of total IT costs for those that do (Estimate 2). Annualized costs assume a
2% annual discount rate.
Table 5-5: Implementation costs per airline, fixed
Implementation costs
(2022 $, millions)
Annualized
Airline
Total
5 years
10 years
Non-NDC-capable airlines
56.6
12.0
6.3
NDC-capable airlines
42.4
9.0
4.7
Implementation cost
Estimate 1 (Only non-NDC airlines incur costs)
56.6
12.0
6.3
Estimate 2 (NDC airlines incur 50% cost)
99.0
21.0
11.0
Sources: Delta Airlines’ 2019 and 2022 10-k annual report, Air Carrier Statistics (Form 41 Traffic) T-100 data.
Note: Total cost of implementation is estimated to be 10% of total IT cost ($283 million) for airlines that do not yet have
NDC capabilities (Estimate 1), and 5% of total IT costs for those that do (Estimate 2). Annualized costs assume a 2%
annual discount rate.
horizons. Annualized costs range from $12.0 million to $21.0 million over 5 years, and from $6.3
million to $11.0 million over 10 years. While these figures are approximately double the size of
the scenario in which costs scale with carrier size, we believe that it likely overestimates the
implementation costs of the proposed rule.
The estimates of costs applied a discount rate of 2 percent to annualize costs. Cost estimates
using 3 and 7 percent discount rates are presented in Appendix A.
Family Seating in Air Transportation: Regulatory Impact Analysis 21
The proposed rule also requires that the airlines provide information on family seating to
consumers. Given that the airlines already provide family seating information as shown in Table
4-1, we assume that only minor adjustments would be needed. Thus, the cost of providing the
additional information should be small.
5.5 Transfers
5.5.1 Consumer surplus gains for families who currently pay for seat reservations
Families who pay for advance seat reservations will experience a net price reduction under the
proposed rule. Even though prices for tickets without seat reservations would increase, the
savings that these travelers experience from not needing to pay for seat reservations exceeds
the price increase, resulting in a net price reduction. Consequently, families would experience an
increase in their consumer surplus as described by Figure 5-1. Table 5-6 provides the results of
the calculations, using the information provided in Table 5-1 and Table 5-2.
5.5.2 Reduction in consumer surplus due to airfare increases
Consumer surplus would decrease for all solo passengers, whether they pay for a seat
reservation or not, because the base ticket price they pay will increase. Families who do not pay
for seat reservations in the baseline will also experience an increase in base ticket prices, and
thus, a decrease in consumer surplus. The losses in consumer surplus for families who do not
purchase seat reservations is lower than the gains in consumer surplus reported in Table 5-6.
This reflects that the increase in airfare is much smaller in size than the size of the seating fee
that is eliminated under the proposed rule. Table 5-7 summarizes these calculations.
Table 5-6: Consumer surplus gains to families who pay seat reservation fees (2022$, millions)
Domestic
International
Total
Consumer surplus gain
$698
$212
$910
Table 5-7: Consumer surplus loss due to airfare increases (2022$, millions)
Passenger group
Domestic
International
Total
Solo passengers
Purchase seat reservation in the
baseline
$215 $66 $281
Don’t purchase seat reservations
in the baseline
$366 $113 $479
Adult-child pairs not purchasing seat
reservations in the baseline
$39 $12 $51
Total consumer surplus loss
$620
$191
$811
Family Seating in Air Transportation: Regulatory Impact Analysis 22
Table 5-8: Decrease in airline revenue due to proposed rule (2022$, millions)
International
Total
Decrease in airline revenue
$21
$85
5.5.3 Revenue effects
Airlines would experience revenue impacts if they cannot charge seating fees to families. As
noted, we assume that the total number of tickets sold is unaffected and that the airlines are
indifferent to any change in the mix of passengers, which simplifies the calculation As with the
consumer surplus calculations, the necessary information to perform these calculations is
provided Table 5-1, Table 5-2, and Table 5-3. Table 5-8 summarizes the results.
5.6 Comparison of benefits and costs
The results of our analysis are summarized in Table 5-9. These results reflect an assumption that
37 percent of passengers purchase seat reservations, and DOT requests comment on that
assumption. Consumer surplus gains to families who no longer pay seating fees ($910 million)
outweigh losses in consumer surplus for other passengers ($811 million). Other passengers
include solo passengers and families who do not purchase seat assignments in the baseline.
Ultimately, net benefits depend on the size of the unquantified benefits relative to the
implementation costs. We did not quantify societal benefits due to the lack of reliable data on
the number of families who experience stress or anxiety due to airlines’ family seating policies.
We also have no information on the value that families attach to avoiding problems with family
seating arrangements.
Finally, we expect that the estimated effects would be transitory in nature. Under the
assumption that the total number of passengers (families plus solo passengers) remains
unchanged, the tendency will be for the market to return to its prior equilibrium. In addition,
airlines have many options for responding to the proposed rule including adjusting airfares,
seating fees, and any other existing or new fee.
5.7 Additional impacts
The result of the quantitative analysis is that airlines experience a reduction in revenue due to
this proposed rule. The reduction in revenue comes from the loss in seating fee revenue
collected from families and the reduction in travel on the part of solo passengers and families
that do not pay seating fees in the baseline. It is possible that airlines could make additional
price and fee adjustments to recover revenue losses subject to other competitive constraints. In
addition, airlines may try to pass on implementation costs to consumers. However, we have no
information to judge the extent of these secondary impacts.
Family Seating in Air Transportation: Regulatory Impact Analysis 23
Table 5-9: Summary of economic impacts, first year (2022$, millions)
Benefits (+)
Reduced disutility to passengers
from separation of families
traveling by air
Unquantified
Costs (-)
Implementation costs
$5-21
Net societal benefits (costs)
Not calculable
Transfers (0)
Increase in consumer surplus from
elimination of seating fees for
families
$910
Airline revenue loss
$85
Decrease in consumer surplus for
solo air passengers
$760
Decrease in consumer surplus for
families who do not pay for seat
reservations
$51
The economic analysis is a short-run analysis in that it assumes that the equilibrium overall
number of passengers is unchanged by the proposed rule. Equivalently, we are assuming that
the airlines are capacity-constrained and that it is not technically feasible or economical practical
for them to respond to the increase in air travel demand on the part of families by increasing
load factor, a measure of capacity utilization, or by filling empty seats, for example. This mirrors
the RIA for Accessible Lavatories on Single-Aisle Aircraft. In addition, for a given number of total
passengers, we assume the cost to airlines of providing air travel to a mix of passengers that
includes more families is the same as a mix that includes fewer. Airlines would be indifferent to
the mix of passengers and the increase in air ticket purchases by families who would purchase
seat assignments absent the rule is exactly offset by a decrease in ticket purchases by solo
passengers and families who do not purchase seat assignments. Under these assumptions,
average airfares paid by consumers will be affected only to the extent that implementation costs
are passed on to consumers. Cost impacts are estimated to be small relative to consumer
surplus impacts, which suggests that the predominant effect of the proposed rule will be
monetary transfers among consumer types. The lower airfares paid by the increased number of
families who travel will be offset by the higher airfares paid by decreased number of other
passengers such that average airfare should remain relatively stable.
Family Seating in Air Transportation: Regulatory Impact Analysis 24
An alternative approach to assuming that the total number of passengers is unchanged by the
proposed rule might be to allow for a supply response on the part of airlines, perhaps by
modelling the airline ticket supply curve as upward-sloping. In this case, the increase in demand
for airline tickets by families would increase both equilibrium average airfare and the number of
tickets sold. Estimating consumer surplus effects would require information on the supply curve
for air travel or other assumptions about how airlines make capacity adjustments to
accommodate an increase in demand. However, we do not have an empirical basis for
estimating these adjustments. In fact, we expect that if it is possible for airlines to profitably
increase the number of tickets sold, they would do so in the baseline and in the absence of this
rule.
5.8 Sensitivity analysis
As described in the expert report, the economic analysis included a sensitivity analysis to
examine how the results change using alternative demand elasticity values. The sensitivity
analysis applied elasticities ranging from -0.8 to -2.0 for domestic travelers and from -0.6 to -2.0
for international travelers. In general, the results are robust with respect to the demand
elasticity applied. Higher elasticity values tend to magnify the estimated impacts somewhat, but
do not change the general conclusions. The result that demand elasticity only modestly affects
estimated impacts could be a result of assuming adult-child pairs and solo passengers have the
same elasticity of demand. If the two consumer groups have different elasticities, that would
likely influence the results but also complicate the analysis. We do not, however, have an
empirical basis for assigning different elasticity values.
6 Regulatory alternatives
6.1 No action
The no action regulatory alternative would rely on current industry voluntary efforts. On July 8,
2022, the Department issued a notice that urged airlines “to do everything in their power to
ensure that children who are age 13 or younger are seated next to an accompanying adult with
no additional charge.” The Department launched the Family Seating Dashboard on March 6,
2023. The Dashboard currently shows four airlines (Alaska, American, Frontier, and JetBlue) as
having committed to guaranteeing family seating without a separate fee. As outlined above, all
other large domestic carriers have policies to do their best to seat families together, but they
stop short of guaranteeing it.
Family Seating in Air Transportation: Regulatory Impact Analysis 25
Given that six of the ten large airlines have chosen not to guarantee family seating despite the
Department’s efforts to encourage the practice and calls from consumer advocacy groups,
13
it is
unlikely that they would all issue such guarantees in the absence of additional pressure from the
market or the government. The four airlines with guaranteed family seating policies could
change their policies at any time. The experience with checked baggage fees shows that airlines
adopted baggage fees at a time when they were under financial pressure and when competition
from low-cost carriers pushed them to unbundle their services and advertise lower ticket prices.
It is possible that airlines would re-consider family seating policies in the future in times of
financial stress or competitive pressure.
However, research shows that public reporting of quality metrics can have a positive effect on
airline service quality. One study shows that airlines have lengthened their scheduled flight times
and reduced flight delays substantially in the decade leading up to 2019.
14
This development
coincided with increased public attention to flight delays, and it is possible that airlines may
have responded to pressure from the flying public to improve their on-time performance. Public
pressure to address family seating problems may elicit a similarly positive response.
6.2 Guaranteed family seating without fee restrictions
A second alternative would be to adopt the requirement for airlines to guarantee family seating
but not to impose a requirement that the airlines eliminate seating fees for families. This
alternative would result in roughly the same benefits and costs as the proposed rule. The
reassurance that airlines would meet family seating needs regardless of whether a family
purchases a separate seat reservation would reduce stress and anxiety for families. Other
passengers would no longer be burdened with being seated next to a child who is separated
from an accompanying adult. Airlines would still incur implementation costs. Families who
currently pay seating fees because they believe that the only way to assure being seated
together is to pay a seating fee could simply stop paying the fees and still be guaranteed seats
together. In general, we expect that this alternative would yield the same result as the proposed
rule.
7 Summary
This RIA evaluates the benefits and costs of a Department of Transportation proposed rule to
amend 14 CFR Part 259, Enhanced Protections for Airline Passengers, to require U.S. and foreign
13
See Airlines: Kids should sit with their parents! (consumerreports.org), accessed on 10/27/2023.
14
Forbes, Silke, Mara Lederman, and Zhe Yuan, “Do Airlines Pad Their Schedules?”, Review of Industrial
Organization Volume 54, Issue 1, February 2019. https://www.jstor.org/stable/48702939 .
Family Seating in Air Transportation: Regulatory Impact Analysis 26
air carriers to seat children aged 13 and under next to at least one accompanying adult without
charging a separate fee.
The benefits of the proposed rule are that families can be assured that they will be seated
together during air travel without paying a separate fee. For families that do not currently pay
seating fees, some will experience a reduction in stress and anxiety associated with air travel or a
decrease in the amount of time needed to make seating arrangements prior to air travel.
Families who currently pay seating fees will see a reduction in the total price they must pay for
airline tickets. Passengers who do not travel as a family will experience increased costs due an
increase in airfare as will families who do not currently purchase seating assignments. Airlines
will incur upfront costs to adjust their ticketing systems to allow them to distinguish passengers
traveling as a family from other passengers, and opportunity costs associated with a reduction in
revenue they receive from seating fees.
An alternative that would yield roughly the same net societal benefits would be to adopt the
requirement for airlines to guarantee family seating but to not impose a requirement that the
airlines eliminate seating fees for families. The Department did not propose this option,
however, because as described in the notice of proposed rulemaking, the Department believes
that airlines should not charge families to sit together.
Family Seating in Air Transportation: Regulatory Impact Analysis 27
Appendix A Implementation cost estimates at 3 and 7 percent
discount rates
Table A-1: Implementation costs per airline, scaled by carrier size, 3% discount rate
Total passengers
(2022, millions)
Implementation costs
(2022 $, millions)
Annualized
Airline
Total
5 years
10 years
Non-NDC-capable airlines
158.8
32.0
7.0
3.8
Allegiant
16.9
3.4
0.7
0.4
Delta
141.9
28.6
6.2
3.4
NDC-capable airlines
161.1
16.2
3.5
1.9
Hawaiian
10.0
1.0
0.2
0.1
Spirit
38.4
3.9
0.8
0.5
United
112.7
11.4
2.5
1.3
Implementation cost
Estimate 1 (Only non-NDC airlines incur costs)
158.8
32.0
7.0
3.8
Estimate 2 (NDC airlines incur 50% cost)
319.9
48.2
10.5
5.7
Sources: Delta Airlines’ 2019 and 2022 10-k annual report, Air Carrier Statistics (Form 41 Traffic) T-100 data.
Note: Total cost of implementation is estimated to be 10% of total IT cost ($2.02 per passenger) for airlines that do not
yet have NDC capabilities (Estimate 1), and 5% of total IT costs for those that do (Estimate 2). Annualized costs assume a
3% annual discount rate.
Table A-2: Implementation costs per airline, scaled by carrier size, 7% discount rate
Total passengers
(2022, millions)
Implementation costs
(2022 $, millions)
Annualized
Airline
Total
5 years
10 years
Non-NDC-capable airlines
158.8
32.0
7.8
4.6
Allegiant
16.9
3.4
0.8
0.5
Delta
141.9
28.6
7.0
4.1
NDC-capable airlines
161.1
16.2
4.0
2.3
Hawaiian
10.0
1.0
0.2
0.1
Spirit
38.4
3.9
0.9
0.6
United
112.7
11.4
2.8
1.6
Implementation cost
Estimate 1 (Only non-NDC airlines incur costs)
158.8
32.0
7.8
4.6
Estimate 2 (NDC airlines incur 50% cost)
319.9
48.2
11.8
6.9
Sources: Delta Airlines’ 2019 and 2022 10-k annual report, Air Carrier Statistics (Form 41 Traffic) T-100 data.
Note: Total cost of implementation is estimated to be 10% of total IT cost ($2.02 per passenger) for airlines that do not
yet have NDC capabilities (Estimate 1), and 5% of total IT costs for those that do (Estimate 2). Annualized costs assume a
7% annual discount rate.