Airlines sue DOT over fee disclosure rule

WASHINGTON – Major U.S. airlines are suing the Transportation Department over a new rule requiring upfront disclosure of airline fees, the latest clash between air carriers and the Biden administration.

Airlines for America, along with American Airlines, Delta Air Lines, United Airlines, JetBlue Airways, Hawaiian Airlines and Alaska Airlines, filed suit against the department in the U.S. 5th Circuit Court of Appeals late on Friday, according to a copy of the suit seen by Reuters.

The DOT issued final rules last month requiring airlines and ticket agents to disclose service fees alongside the airfare, saying it would help consumers avoid unneeded or unexpected fees.

The airline group said in a statement on Monday the department’s rule would confuse consumers and that its “attempt to regulate private business operations in a thriving marketplace is beyond its authority.”

The airlines’ lawsuit calls the rule “arbitrary, capricious, an abuse of discretion and otherwise contrary to law.”

The department, which did not immediately comment on Monday, said last month the new rule would result in many consumers paying less for fees when traveling by air.

The agency says consumers are overpaying $543 million in fees annually, and airlines are getting that revenue from consumers who are surprised by fees and “then need to pay a higher fee at the airport to check a bag.”

Major airlines charge higher fees to check bags if travelers do not pay in advance or wait until the time of the flight. Earlier this year, many large U.S. airlines boosted fees for checked baggage.

The DOT said fees for baggage or flight changes “must be individually disclosed the first time that fare and schedule information is provided on the airline’s online platform, and cannot be displayed through a hyperlink.”

The department also said the rule will end “bait-and-switch tactics some airlines use to disguise the true cost of discounted flights.”

It prohibits airlines from advertising promotional discounts off a “low base fare that does not include all mandatory carrier-imposed fees.”