In a significant development, the Biden administration’s latest attempt to enforce greater transparency in airlines fees has hit a roadblock.
On Monday, a federal appeals court temporarily halted the implementation of new rules that would require airlines to disclose fees for services such as checking bags and changing flights, which can significantly increase the total cost of a ticket.
The three-judge panel of the U.S. Court of Appeals for the 5th Circuit sided with major airlines and the trade group Airlines for America, who had challenged the rule. The court found that the Transportation Department “likely exceeded its authority” with the regulation and that enforcing the rule would “irreparably harm airlines.” This decision represents a notable victory for the airline industry, which has been vehemently opposed to the new disclosure requirements.
Transportation Secretary Pete Buttigieg responded sharply to the court’s ruling, taking to social media platform X to voice his disapproval. Buttigieg emphasized the administration’s commitment to defending the rule, stating, “The airline industry lobby is trying to tie this up with lawsuits, but we will not back down from protecting passengers. Airlines are simply wrong to argue that merely having to disclose their fees would ‘irreparably harm’ them. It’s common sense.”
Despite the court’s ruling, Airlines for America chose not to comment publicly on the decision. The proposed rule, which was set to take effect on July 1, would have mandated that airlines and flight booking websites inform consumers of fees for services such as checking a first or second bag, carrying on a bag, and changing or canceling a reservation at the time the fare is initially displayed.
Buttigieg has argued that the rule is a necessary step toward greater transparency in the increasingly complex ticket-buying process. He pointed out that as airlines have added fees for services that were once included in the ticket price, it has become more challenging for consumers to understand the full cost of their travel. The Transportation Department estimated that the rule could save travelers over $500 million annually by making these fees clear upfront.
However, the airline industry has criticized the rule as an overreach. In their May petition to the appeals court, the airlines described the regulation as “arbitrary, capricious,” and beyond the Transportation Department’s authority. The court’s decision to put the rule on hold pending further legal proceedings means that, for now, airlines will not be required to disclose these fees upfront.
This fee disclosure rule is part of a broader effort by President Biden to combat so-called “junk fees” and ensure consumers are not misled when purchasing airline tickets. These fees, which many customers, especially infrequent travelers, may not be aware of until after they have booked their tickets, have become a significant revenue source for airlines. According to the Bureau of Transportation Statistics, airlines collected nearly $5.5 billion in baggage fees alone last year.
The push for greater transparency in airline fees was also driven by the unprecedented number of consumer complaints received by the Biden administration during the coronavirus pandemic. Many consumers alleged that airlines and ticket agents delayed or refused to provide refunds when millions of passengers canceled their flights during the pandemic’s peak.
Airlines have generally resisted new regulations, arguing that they have a vested interest in providing a positive experience for their customers. They contend that additional regulations are unnecessary and burdensome.
In recent months, Buttigieg has been vocal in his criticism of airline performance, particularly following operational meltdowns. Earlier this month, he criticized Delta Air Lines for extensive flight cancellations and delays affecting 500,000 customers following a global IT outage. The Transportation Department announced an investigation into Delta’s handling of the situation and whether it complied with regulations requiring cash refunds for affected customers. A similar probe was launched into Southwest Airlines following a major operational failure in December 2022, which resulted in a $140 million fine for the carrier.
As the legal battle over fee disclosures continues, the Biden administration and the airline industry remain at odds over how best to balance consumer protection with the operational realities of the aviation sector. The outcome of this case will have significant implications for travelers and the future of airline fee transparency.
