Airlines Challenge Biden Administration Over Fee Disclosure Rule: Report
Major U.S. airlines have reportedly initiated legal action against the U.S. Transportation Department (USDOT), contesting a recent mandate demanding upfront disclosure of airline fees, marking the latest confrontation between air carriers and the Biden administration.
Airlines for America, along with American Airlines Group Inc (NASDAQ:AAL), Delta Air Lines Inc (NYSE:DAL), United Airlines Holdings Inc (NASDAQ:UAL), JetBlue Airways Corporation (NASDAQ:JBLU), Hawaiian Holdings Inc (NASDAQ:HA), and Alaska Air Group Inc (NYSE:ALK), filed a lawsuit against the department in the U.S. Fifth Circuit Court of Appeals, reported Reuters.
The U.S. Transportation Department’s final rules, issued last month, mandate airlines and ticket agents to disclose service fees alongside airfare, aiming to enhance transparency for consumers and prevent unexpected charges.
The rule, however, faces opposition from the airline group, which argues that it would perplex consumers and infringe upon private business operations in a flourishing market, mentioned the report.
The lawsuit, previously undisclosed, criticizes the rule as “arbitrary, capricious, an abuse of discretion and otherwise contrary to law.”
Also Read: Airline Passenger Rights Elevated: Biden Administration Enforces Refund Rule
USDOT contends the regulation will save consumers millions annually by preventing overpayments on fees, which airlines currently capitalize on through surprise charges.
According to USDOT, airlines will be required to divulge baggage or flight change fees upfront, eliminating misleading advertising tactics and ensuring comprehensive fee disclosure at the outset of ticket purchase.
Notably, Southwest Airlines Co (NYSE:LUV) refrained from joining the lawsuit, expressing support for certain provisions in the USDOT proposal, as per the report.
While airlines maintain they already offer full fee disclosure, data indicates substantial revenue generation from fees, including nearly $6.8 billion in U.S. airlines baggage fees in 2022.
The rule also mandates airlines to reassure consumers that seats are included in the fare, preempting additional charges for seat assignments.
President Joe Biden endorsed the mandate as a shield against surprise fees, emphasizing the importance of protecting passengers from airline malpractices, such as delayed refunds and excessive fees.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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