Major US airlines really, really don't want to show you how much you'll pay in fees upfront

14.05.2024 - 07:15 / insider.com / United Airlines

Major US airlines sued the Department of Transportation on Friday over a rule that requires upfront fee disclosures for costs like baggage and itinerary changes.

The Biden administration has made fighting the hidden costs it calls "junk fees" a priority across industries, from banks to event companies.

Under the rule, which goes into effect on July 1, airlines have to display fees the first time a consumer sees the fare, not in a hyperlink or separate page. The rule also requires airlines to inform passengers that they do not need to purchase a specific seat to travel and to include all mandatory fees when advertising fares.

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The DOT said in late April that these rules could save consumers over $500 million annually from airlines' "unnecessary or unexpected fees."

Fees have become a major revenue driver for airlines. The DOT said its data showed airline revenue from baggage fees alone jumped by more than 30% between 2018 and 2022. Last year, airlines raked in almost $5.5 billion in baggage fees, per the Bureau of Transportation Statistics, and many airlines upped their baggage fees this year.

The airlines suing — which include United, Delta, American, Jet Blue, and Alaska Airlines, along with smaller peers and a lobbying group — argue that fee transparency will confuse consumers. Southwest Airlines, which allows two free checked bags and does not have change or cancel fees, did not join the group.

The rule "is a bad solution in search of a problem," said lobbying group Airlines for America in a Monday statement. Lobbyist groups across industries are fighting the Biden administration's war on junk fees through lawsuits.

The airline lobby successfully pressured Congress in 2018 to drop a plan to limit baggage and change fees, a law the Trump administration opposed.

In a DOT statement about the lawsuit, the agency said it plans to "vigorously defend" the new rule.

"Many air travelers will be disappointed to learn that the airline lobby is suing to stop these common-sense protections," the DOT's statement said.