A U.S. appeals court on Tuesday blocked the Biden administration’s 2024 rule requiring airlines to disclose service fees upfront, ruling that the Transportation Department (USDOT) did not comply with procedural requirements.
The court said USDOT has the authority to regulate airline fee disclosures but must allow airlines to review and comment on the study used to justify the rule.
The court returned the rule to USDOT to address the issue, but the department, now under the Trump administration, has not indicated whether it will proceed with revisions. The regulation, introduced in April, required airlines and ticket agents to display service fees alongside ticket prices to increase transparency for consumers.
However, the rule was put on hold due to legal challenges.
Major U.S. airlines, including American Airlines, Delta, United, JetBlue and Alaska Airlines along with Airlines for America and the International Air Transport Association, sued to overturn the rule. Airlines for America welcomed the court’s decision, calling the regulation an unnecessary burden that could confuse consumers with excessive information.
The rule had set an October 2024 deadline for airlines to disclose fee data to third-party ticket agents and an April 2025 deadline for their own websites. Airlines argued the rule would require them to invest millions in website modifications.
USDOT previously estimated that consumers were overpaying $543 million annually due to hidden fees, contributing to airline revenue from passengers facing unexpected charges.
U.S. airlines collected $7.1 billion in baggage fees in 2023, up from $6.8 billion in 2022. Several airlines increased checked baggage fees last year, and some charge higher fees at airports if passengers do not prepay.
USDOT said the rule aimed to eliminate pricing practices that obscure the full cost of air travel. Meanwhile, three senators last week questioned whether two low-cost airlines were manipulating seat pricing.
