Appeals Court Halts Biden Administration’s Airline Fee Transparency Regulation
The regulation was introduced in April 2024 to safeguard airline consumers from concealed or unforeseen fees.
On January 28, a U.S. appeals court blocked the Biden administration’s 2024 regulation mandating airlines to disclose all service fees upfront, citing the Department of Transportation (DOT) for not adhering to procedural guidelines.
Although the court acknowledged the agency’s authority to establish fee disclosure regulations aimed at preventing “unfair or deceptive practices by airlines,” it criticized the DOT for permitting airlines to comment on the study that led to the regulation.
The regulation has been returned to the DOT, which now has the opportunity to rectify the procedural misstep, though it remains uncertain how the agency will proceed under the Trump administration.
The DOT did not provide a comment by the time of publication.
In April 2024, the DOT enacted regulations requiring all airlines and ticketing agents to disclose service fees alongside airfare, aimed at shielding customers from surprise charges.
A month later, a coalition of companies, including American Airlines, Delta Air Lines, United Airlines, JetBlue, and Alaska Airlines—alongside Airlines for America and the International Air Transport Association—filed a lawsuit to overturn these rules, prompting an appeals court to temporarily block the regulations.
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The regulations mandated airlines to provide fee information to third-party ticket agents by October 2024 and post it on their websites by April 30, 2025.
When filing the lawsuit, the coalition asserted that these regulations would necessitate “millions in spending to overhaul their websites, taking resources away from other initiatives.”
The January 28 decision was praised by Airlines for America, which argued that the regulation “represents regulatory overreach that would confuse consumers who would be overwhelmed with information that ultimately complicates the purchasing process.”
Conversely, the National Consumers League (NCL), a nonprofit consumer advocacy organization, condemned the ruling.
Breyault acknowledged the court for rejecting the airline coalition’s argument that the DOT lacked the authority to enact the regulations.
“While this results in a temporary setback for passengers, we are encouraged that the court seems to have dismissed the airline industry’s claims for complete exemption from DOT oversight,” he stated.
The DOT reported in April 2024 that consumers were overpaying approximately $543 million annually in fees.
The agency indicated that airlines were generating extra revenue through unexpected fees, such as a “higher fee at the airport for checked bags.”
These charges typically affect consumers who do not pay in advance or delay payment until travel day, and several U.S. airlines raised baggage fees last year.
The regulation aimed to eliminate “bait-and-switch” tactics employed by some airlines to obscure the actual cost of discounted tickets, according to the DOT’s statement last year.
“Bait-and-switch” refers to instances where an airline fails to inform a customer that a baggage fee will increase if settled on the day of travel instead of beforehand.
In 2023, U.S. airlines collected $7.1 billion in baggage fees, up from $6.8 billion the previous year.
Reuters contributed to this report.
