A recent decision by a three-judge panel on the 5th U.S. Circuit Court of Appeals in New Orleans has sparked criticism from consumer advocates. The panel blocked a new rule from the U.S. Transportation Department that aimed to require airlines to provide clearer disclosure of fees when advertising flight prices.
The judges expressed concerns that the rule 'likely exceeds' the agency's authority and could potentially harm airlines. As a result, they granted a request from airlines to temporarily halt the rule while a lawsuit filed by the carriers unfolds.
The rule, which was published by the Biden administration in April along with another rule related to airline refunds, was part of an effort to combat what the administration referred to as 'junk fees.' The Transportation Department estimated that the rule could save consumers over $500 million annually.
Consumer advocates, however, were disappointed by the court's decision. They argued that the rule was necessary to protect consumers from the often opaque fee structures employed by airlines. The ruling was seen as a victory for the airlines at the expense of everyday consumers.
Under the now-blocked rule, airlines and ticket agents would have been required to disclose fees for services such as checked and carry-on bags, as well as fees for canceling or changing reservations. The rule also mandated that airline websites display these fees prominently when customers first view prices and schedules.
Several major carriers, including American, Delta, and United, along with the industry trade group Airlines for America, filed a lawsuit in May to challenge the rule. They argued that the rule would overwhelm consumers with excessive information during the ticket purchasing process.
The panel of judges not only granted the airlines' request to expedite the lawsuit but also indicated that the matter would be fast-tracked for oral arguments in the next available session. The outcome of this legal battle will likely have significant implications for how airlines disclose fees to consumers in the future.
