New Airline Fee Disclosure and Refund Rules Now Required by US Mandates

The U.S. Transportation Department is finalizing new rules Tuesday that require upfront disclosure of airline fees and mandate refunds for delayed baggage or inoperative services like onboard Wi-Fi.

The rules, which were nearly three years in the works, will require airlines and ticket agents to inform consumers about baggage or change and cancellation fees upfront. The department stated that consumers are estimated to save $543 million annually in excess airline fees.

These new rules will also require airlines and ticket agents to display extra service fees alongside the full fare information whenever fare and schedule information is shown online for the first time.

The government will also mandate that airlines refund baggage fees for bags not delivered within 12 hours of domestic flight arrivals or 15-30 hours of international flight arrivals, as well as for services that are not provided or do not work. Airlines will also be required to promptly and automatically issue refunds for canceled flights.

“Airlines should focus on competing to secure passengers’ business rather than trying to outdo each other with surprise fees,” said U.S. Transportation Secretary Pete Buttigieg.

Airlines for America, a trade group representing major carriers, stated that airlines “provide transparency and a wide range of choices to consumers from the initial search to arrival. U.S. airlines are dedicated to delivering top-quality service, which includes clear pricing, fees, and ticket terms.”

In May, President Joe Biden announced that USDOT was developing new rules to ensure airlines compensate passengers with cash for significant flight delays or cancellations caused by the carriers. However, nearly a year later, USDOT has yet to release a formal proposal.

The new rules will require airlines to explain fee policies before ticket purchases and share fee pricing and policies with other companies that display fares.

Under these regulations, airlines must inform consumers that seats are guaranteed and that passengers do not need to pay for seat selection. Carriers are also banned from advertising promotional discounts that exclude mandatory carrier-imposed fees.

Last month, a U.S. Senate Committee announced it was intensifying its probe into the billions of dollars in annual airline fees, noting a significant increase in total revenue from baggage fees across major U.S. airlines from $4.9 billion in 2018 to $6.8 billion in 2022.