An effort by the Biden administration to force American airlines to disclose upfront their fees to customers has been thwarted by an appeal court, pending a further hearing.
The US Department of Transport (DOT) issued new rules in April 2024, requiring airlines and ticket sellers to tell consumers about their service fees at the same time as the airfare. The move is part of an ongoing drive by the DOT to prioritise passenger rights and help them avoid unnecessary charges.
This week, Secretary Buttigieg announced a big expansion for airline passenger rights.
— U.S. Department of Transportation (@USDOT) April 26, 2024
New DOT regulations put money back into consumer pockets by requiring airlines to issue automatic cash refunds for significantly delayed or canceled fights and have transparent pricing. pic.twitter.com/dI0CAWT82i
Attempt to end $7.1-billion “bait-and-switch” scam
Announcing the rule change in the spring, the DOT said $543 million were paid out annually in fees by passengers who were being overcharged and hit with surprise luggage charges, which have been raised by many major carriers this year.
US airlines raked in a colossal $7.1 billion in baggage fees in 2023, up from $6.8 billion in 2022, a sum the government says is boosted by the promotion of bargain airfares that do not include eventual additional fees, branding the lack of price transparency as “bait-and-switch tactics” deliberately deployed by some airlines “to disguise the true cost of discounted flights.”
Higher ticket prices for not paying in advance are another practice the DOT wants to stamp out, as well as inadequate refunding and compensation policies.
Today's new rule makes it easy for passengers to obtain refunds when airlines cancel or significantly change their flights, delay their checked bags, or fail to provide the ancillary services they purchased.pic.twitter.com/S2Qe0d2dq9
— U.S. Department of Transportation (@USDOT) April 24, 2024
Temporary block
But with a date set for the end of October to disclose fee data to third-party ticket agents, and for airline websites to be updated accordingly by 30 April 2025, airlines resisted. Carriers including Alaska, American, United, Delta, and JetBlue, as well as trade body Airlines for America and the International Air Transport Association (IATA) challenged the new measures with a lawsuit issued in May this year.
Now, a panel of three judges on the Fifth U.S. Circuit Court of Appeals have granted the airlines’ wishes and placed a temporary block on the introduction of the new rule, which it says, “likely exceeds DOT’s authority and will irreparably harm airlines.”
Just “common sense”
Industry complainants pointed out the regulatory changes would require airlines to “spend millions” to update their websites, costing money that could be spent elsewhere.
Meanwhile the DOT framed the airlines refusal to comply as more bad faith towards their passengers, saying, “Nothing in the court’s decision prevents airlines from voluntarily complying with this common sense rule that simply requires them to keep their customers fully informed.”
The introduction of the rule change will now be delayed until the case is reviewed at an oral hearing.
