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US Airlines Challenge Biden Administration Over New Airfare Fee Disclosure Rule

 |  May 13, 2024

Several major U.S. airlines have initiated legal action against the U.S. Transportation Department (USDOT) concerning a recently introduced rule mandating upfront disclosure of airline fees. This move marks the latest confrontation between air carriers and the Biden administration.

Airlines for America, along with prominent carriers including American Airlines, Delta Air Lines, United Airlines, JetBlue Airways, Hawaiian Airlines and Alaska Airlines, jointly filed suit against the USDOT in the U.S. Fifth Circuit Court of Appeals on Friday. This development was disclosed through a copy of the lawsuit obtained by Reuters.

The USDOT finalized regulations last month necessitating airlines and ticket agents to divulge service fees alongside airfare figures, with the aim of aiding consumers in avoiding unforeseen or unnecessary charges, as per reports by Reuters.

In response, the airline coalition issued a statement on Monday denouncing the department’s directive as potentially perplexing for consumers. They argued that the USDOT’s “attempt to regulate private business operations in a thriving marketplace is beyond its authority,” Reuters reported.

Termed as “arbitrary, capricious, an abuse of discretion and otherwise contrary to law” in the lawsuit, the airlines challenge the new rule’s legitimacy. The USDOT has specified that fees for baggage or flight alterations “must be individually disclosed the first time that fare and schedule information is provided on the airline’s online platform, and cannot be displayed through a hyperlink.”

Additionally, the department asserted that the regulation aims to curb “bait-and-switch tactics” employed by certain airlines, preventing the concealment of true costs behind discounted flight fares. The rule forbids airlines from advertising discounts off a “low base fare that does not include all mandatory carrier-imposed fees.”

Expressing dissent, the airline group labeled the rule as “a bad solution in search of a problem.” Notably, Southwest Airlines, which had previously voiced support for certain provisions in the USDOT proposal, refrained from joining the legal action.

In defense of their stance, the airline coalition highlighted their existing practices, contending that airlines already furnish consumers with comprehensive disclosure of all fees associated with air travel prior to ticket purchase.

The financial stakes underlying this dispute are substantial, with U.S. airlines reportedly amassing nearly $6.8 billion in baggage fees in 2022, followed by $5.5 billion in the first nine months of 2023.

Source: Reuters