Airlines for America challenge new DOT fee disclosure rule in Court

A coalition of major airlines and the trade group Airlines for America have filed a petition with the U.S. Fifth Circuit Court of Appeals, seeking to invalidate a recent Department of Transportation (DOT) regulation. The contentious rule, introduced by the DOT in late April, mandates that airlines and online travel agencies provide upfront disclosure of additional fees for services such as seat selection and checked baggage at the time of ticket listing, rather than at the point of purchase.

The group of airlines, which includes Alaska, American, Hawaiian, Delta, JetBlue, and United, contends that the DOT has overstepped its regulatory bounds with this rule. They describe the regulation as “arbitrary, capricious,” and an “abuse of discretion,” arguing that it exceeds the legal authority of the department.

The Biden administration had originally unveiled the airline fee disclosure rule in September 2022, with the intent to make the full cost of air travel more transparent to consumers during the comparison shopping phase. President Joe Biden emphasized the importance of consumers knowing the “full cost of your ticket, right when you’re comparison shopping.”

However, Airlines for America has expressed concerns that the new rule will only serve to “confuse consumers” and “complicate the buying process.” In a statement released to CNBC, the association asserted that airlines already provide full disclosure of all fees before ticket purchase and criticized the DOT’s rule as an unnecessary regulation of private business operations in a flourishing market. The association further stated that the DOT’s ancillary rule is a misguided solution looking for a problem to solve.

The legal challenge marks the latest development in the ongoing debate over airline fee transparency, with the court’s decision poised to have significant implications for the industry and consumers alike.

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