By David Shepardson
WASHINGTON (Reuters) -Major air carriers on Friday challenged a U.S. appeals court ruling in January that the Transportation Department has the authority to write airline fee disclosure rules.
A three-judge panel of the 5th Circuit Court of Appeals blocked the Biden administration’s 2024 rule requiring upfront disclosure of airline service fees from taking effect.
While noting that the Transportation Department had the authority to write rules on unfair or deceptive practices by airlines, the court said the agency had not complied with procedural rules.
American Airlines, United Airlines, Delta Air Lines, JetBlue and Alaska Airlines, along with trade groups Airlines for America and the International Air Transport Association, asked the full appeals court to reconsider the ruling.
The rule would “upend the way airlines interact with their customers, at great cost, and with no demonstrated benefit,” they said.
The appeals court said USDOT should have allowed airlines an opportunity to comment on a study reviewing the impact of the fee disclosure rules.
It sent the regulation back to USDOT to give it a chance to address the procedural error.
USDOT did not immediately issue a comment on Friday.
Regulations issued by USDOT in April 2024 required airlines and ticket agents to disclose service fees alongside airfares to help consumers avoid unneeded or unexpected fees.
The requirement was put on hold by the court pending the airlines’ legal challenge.
In April, USDOT said consumers were overpaying $543 million in fees annually, generating additional revenue for airlines from passengers surprised by having to pay a “higher fee at the airport to check a bag.”
Major airlines charge higher baggage fees if travelers do not pay in advance or wait until flight time.
Several U.S. airlines boosted fees in 2024 for checked baggage while Southwest Airlines said this week it plans to introduce checked baggage fees for some customers.
USDOT estimated the rule would cost air carriers and ticket agents $46 million.
U.S.
airlines collected $7.1 billion in baggage fees in 2023, up from $6.8 billion in 2022.
(Reporting by David Shepardson; Editing by Leslie Adler and Richard Chang)
