By David Shepardson
WASHINGTON (Reuters) – A U.S. appeals court on Monday blocked a new U.S. Transportation Department rule requiring advance disclosure of airline fees, pending a full review of the regulations.
The DOT issued final rules in April requiring airlines and ticket agents to disclose service fees along with the price of an airline ticket, saying it would help consumers avoid unnecessary or unexpected charges.
The court’s ruling is a major setback for the Biden administration, which has taken a hard line on airline pricing practices over the past three years.
A three-judge panel of the U.S. Court of Appeals for the 5th Circuit granted the industry’s request to temporarily block the rules, saying they “likely exceed DOT’s authority and will cause irreparable harm to airlines.” The court said the case would be heard at the next oral argument hearing.
Major carriers, including American Airlines, Delta Air Lines, United Airlines and others joined by the trade group Airlines for America, filed a lawsuit in May to block rules that would have required carriers to disclose fee data to third-party ticketing agents by Oct. 30 and on their own websites by April 30, 2025.
The industry argued that the rule would force airlines to “spend millions redesigning their websites, diverting resources from other projects.”
The airline and the DOT did not immediately comment Monday.
Transportation Secretary Pete Buttigieg recently said he was concerned about airline refund practices — including Delta Air Lines — after cancellations triggered by a software update from global cybersecurity firm CrowdStrike caused system issues at Microsoft, including many airlines.
In April, the DOT said consumers pay $543 million in additional fees each year, and airlines get that extra revenue from consumers who are surprised by the fees and “then have to pay higher fees at the airport to check a bag.”
Major airlines are charging higher fees for checked bags if travelers don’t pay in advance or wait until the time of their flight. Earlier this year, many major U.S. airlines increased fees for checked bags.
The DOT also said the rule would end “decoy tactics used by some airlines to disguise the true cost of discounted flights.” It prohibits airlines from advertising promotional discounts on a “low base fare that does not include all mandatory fees imposed by the carrier.”
U.S. airlines will collect $7.1 billion in baggage fees in 2023, up from $6.8 billion in 2022.
(Reporting by David Shepardson; Editing by Sandra Maler and Michael Perry)
