Biden administration rule for airline fees halted by federal court

30.07.2024 - 22:30 / thepointsguy.com / Pete Buttigieg

A U.S. Department of Transportation regulation requiring airlines to more transparently disclose add-on fees appears to be in peril.

On Monday, a panel of federal judges temporarily halted the Biden administration's new regulation, noting that they felt the rule "likely exceeds DOT's authority and will irreparably harm airlines."

The decision, made by the 5th U.S. Circuit Court of Appeals, means airlines can hold off on making sweeping changes in how they display prices, fees and fare rules — at least until the case is resolved.

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Under the rule, first unveiled in April, airlines and third-party ticket sellers would have to immediately disclose crucial ancillary charges the first time a flight's price is displayed.

Set to take effect in late April 2025, the new guidelines would force carriers to disclose ancillary charges more clearly, such as those for first and second checked bags, full-size carry-on bags, and change and cancellation fees. These would have to be displayed when a customer first sees a fare.

Airlines would also have to use DOT boilerplate language to ensure passengers understand that they're entitled to a seat on a flight, even if they don't pay for seat selection.

A group of six U.S. airlines and the industry's top U.S. lobbying group swiftly sued the Biden administration, calling it a "bad solution in search of a problem" and one that would "confuse customers," and argued that the measure went beyond the DOT's authority. Alaska Airlines, JetBlue and industry lobbying groups Airlines for America and the International Air Transport Association joined the three legacy U.S. carriers (American Airlines, Delta Air Lines and United Airlines) in the suit.

The lawsuit made "a strong showing that the Rule exceeds DOT's authority," the judges wrote Monday. They also agreed to put the DOT's regulation on hold until a final outcome is reached.

Transportation Secretary Pete Buttigieg vowed to continue the DOT's push for price transparency changes despite Monday's appeals court ruling.

"The airline industry lobby is trying to tie this up with lawsuits, but we will not back down from protecting passengers," Buttigieg wrote on the social media platform X. "Airlines are simply wrong to argue that merely having to disclose their fees would 'irreparably harm' them."

The Biden administration has taken a harder line with airlines to protect consumers as part of a larger fight against "junk fees." This includes issuing stricter refund rules that were recently codified in the Federal Aviation Administration reauthorization bill passed by Congress in May. The DOT also rolled out a dashboard in 2022 that transparently displays