A U.S. appeals court blocked on Jan. 28 the Biden administration’s 2024 rule requiring airlines to disclose all service fees upfront because the Department of Transportation (DOT) did not comply with procedural rules.
While the court ruled the agency had the authority to write fee disclosure rules addressing “unfair or deceptive practices being conducted by airlines,” the DOT should not have allowed airlines a chance to comment on the study used to create the rule.
The rule was sent back to the DOT, which now has a chance to address the procedural error, although it is unclear what the agency will decide under the Trump administration.
The DOT did not respond to a request for comment by publication time.
The agency issued regulations in April 2024 requiring all airlines and ticket agents to disclose service fees with airfare, which was intended to prevent customers from incurring unexpected fees.
After a group of companies, including American Airlines, Delta Air Lines, United Airlines, JetBlue, and Alaska Airlines—along with Airlines for America and the International Air Transport Association—sued to overturn the rules a month later, an appeals court temporarily blocked the regulations.
The rules required airlines to disclose fee data to third-party ticket agents by October 2024 and on their websites by April 30, 2025.
When they filed the lawsuit, the group argued that the regulations would require them to “spend millions to reengineer their websites, diverting resources from other projects.”
The Jan. 28 ruling received praise from Airlines for America, which said the regulation “embodies regulatory overreach that would confuse consumers who would be inundated with information that would only serve to complicate the buying process.”
The National Consumers League (NCL), a nonprofit consumer advocacy group, criticized the ruling.
Breyault commended the court for disagreeing with the airline group’s argument that the DOT lacked the authority to issue the regulations.
“While this is a temporary loss for passengers, we are pleased that the court appears to have rejected the airline industry’s efforts to get a free pass from DOT oversight entirely,” he said.
The DOT said in April 2024 that customers were overpaying roughly $543 million in fees every year.
It added that airlines were generating additional revenue by surprising passengers with fees, like a “higher fee at the airport to check a bag.”
These fees are often charged to consumers who do not pay in advance or wait until their flight time, and several U.S. airlines increased check baggage fees last year.
The regulation would cease “bait-and-switch tactics some airlines use to disguise the true cost of discounted flights,” the DOT said last year.
“Bait-and-switch” means when an airline does not alert a customer that a baggage fee will increase if paid on the date of travel, rather than in advance.
In 2023, U.S. airlines charged $7.1 billion in baggage fees, an increase from $6.8 billion the prior year.
