Just as consumers were starting to feel hopeful about gaining more transparency from airlines, a U.S. appeals court has halted the implementation of the U.S. Transportation Department’s new rule requiring airlines to disclose fees upfront.
This decision will remain in effect until there is a full review of the regulation, reported Reuters.
The Department of Transportation (DOT) DOT implemented final regulations in April, requiring airlines and ticket agents to disclose service fees along with the airfare. This was done to enable consumers to make well-informed choices and to prevent unexpected or unnecessary fees.
This initiative aimed to tackle the problem of increasing fees over the previous three years.
Here is more of what Reuters had to report on the issue:
American Airlines (AAL.O), opens new tab, Delta Air Lines (DAL.N), opens new tab, United Airlines (UAL.O), opens new tab, JetBlue (JBLU.O), opens new tab, Alaska Airlines (ALK.N), opens new tab were among the airlines, joined by trade group Airlines for America and the International Air Transport Association, which sued in May to block the rules.
The rules set carriers an Oct. 30 deadline to disclose fee data to third-party ticket agents, and on their own websites by April 30, 2025.
The industry said the rule would require airlines to “spend millions” to re-engineer their websites, diverting resources from other projects.
The airline group declined to comment on Monday’s ruling.
A DOT spokesperson said it would continue to defend the rule, adding, “Nothing in the court’s decision prevents airlines from voluntarily complying with this common sense rule that simply requires them to keep their customers fully informed.”
Transportation Secretary Pete Buttigieg has recently voiced concern about the refund practices of airlines – notably Delta Air Lines (DAL.N), opens new tab – after cancellations triggered by a software update by global cybersecurity firm CrowdStrike (CRWD.O), opens new tab caused system problems for Microsoft (MSFT.O), opens new tab, including many airlines.
In April, DOT said consumers were overpaying $543 million in fees annually, generating additional revenue for airlines from passengers surprised by fees who found they needed to pay a “higher fee at the airport to check a bag.”