Airlines Sue Transportation Department Over ‘Junk Fee’ Ban

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The U.S. Transportation Department will “vigorously defend” its newly enacted rule against what it calls airlines’ “hidden junk fees.” Last Friday, Airlines for America (A4A), along with American, Delta, United and three other carriers, filed a lawsuit against the Biden administration Transportation Department in federal appeals court. The suit, filed with the 5th U.S. Circuit Court of Appeals in New Orleans, claims the administration is exceeding its authority by trying to “regulate private business operations in a thriving marketplace.”

The new rule, announced on April 24, would mandate that airlines and travel agents must disclose charges for baggage or canceling or changing a reservation up front, showing the fees on the first page of the airlines’ websites where passengers would go for a price quote on a flight. Transportation Department officials estimate the new rule will save airline passengers more than $500 million annually. Among the nation’s top six airlines, only Southwest chose not to participate in filing the suit.

A4A said Monday (May13), “The ancillary fee rule by the Department of Transportation will greatly confuse consumers who will be inundated with information that will only serve to complicate the buying process.”

On Tuesday, Transportation Secretary Pete Buttigieg fired back on social media, “We just issued a rule requiring airlines to inform you, before you buy a ticket, of fees they will charge you. Now the airline lobby is suing us, saying that if you have the right to that information it will ‘confuse’ you. For once, I am speechless.”

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Mark Phelps is a senior editor at AVweb. He is an instrument rated private pilot and former owner of a Grumman American AA1B and a V-tail Bonanza.

42 COMMENTS

  1. I am programmed to side with the flying folk, but in this case I am with the DOT. Buying an airline ticket is a nightmare. Imagine going to Walmart and every price in every aisle comes with a disclaimer “subject to obscure additional charges at the cash register”. Or you buy a car and when you want to open the trunk in the evening you can’t. You go back to the dealer who says “ability to open the trunk : that’ll be an extra 500 thank you !”. The whole obfuscation also stops you from comparing offers, and to “sort by price” because there is no way to compare rates that include a 25kg checked-in piece of luggage. There are a few more ways in which airlines play dirty by blocking free competition. Its about time the airline unions took a stance in favour of consumer protection to push progress from within : I wouldn’t want to work for a company that willingly misleads its customers.

    • Forget a Wal-Mart comparison. What about health care in the US? You can’t find out what all the different charges and fees are until after the doctor’s visit. Sometines it takes months for the bill and explanation of benefits shakes down. A lot of times a patient can’t even pay cash up front because even the staff doesn’t know the price. Which means they can’t even provide service without an insurance card whether you want to use insurance or not. I say if the gubmit’ is that worried about full up front disclosure of costs and fees for air fares they should leave the airlines alone until they mandate medical billing costs upfront disclosure.

      • While they are at it, they need to go after hotel chains and rent car companies for their hidden fees and charges. I get really tired of booking a hotel or renting a car thinking that I was getting the price they quoted me, only to find the bill inflated by 15-20% for add-on fees after you have made the reservation.

    • Just as a side note there are features on some new “connected” cars where after the first year some features are disabled unless you pay a monthly or yearly subscription. So that model is already here.

  2. I think this will backfire when the flying public see just how much of the ticket price is actually TAXES !

    • If you think that is bad, look into the taxes charged on gasoline when you fill up. One reason why gas prices vary so much around the country is because of the different tax rates in each state, plus the federal highway tax.

      • Small government guy here. Federal gas tax needs to go up. It’s been the same for WAY too long.
        Also, the amount of taxes also need to be more transparent. The media could fix that by not helping hide it in their reporting. When you say, “The average price of X is….) you don’t include the taxes unless you also say you are unless it’s auto fuel. Then it’s okay to let “ Big Oil” take the blame.

  3. From the people who bring you stealth taxes a reaction to the boot being on the other foot. “They dont like it up em Captain Mainwaring.”

  4. Good for Southwest in refusing to go along with the other airlines. Why are the others so afraid of revealing what they actually charge?

      • Not really. Congress enacted those provisions in the FAA authorization, when they should have actually been the province of the Federal Trade Commission. Just because the FAA regulates air traffic, does not mean that it should be involved in the commerce of selling airline tickets. The FAA is in charge of ATC, airline safety and aircraft design, not interstate commerce.

  5. they are against the simple concept.. “when I make the reservation etc, I actually know what I will need to pay when I buy the ticket.”

  6. “A4A said Monday (May13), “The ancillary fee rule by the Department of Transportation will greatly confuse consumers who will be inundated with information that will only serve to complicate the buying process.”

    In other words, the airlines don’t think you’re smart enough to understand all of the fees and charges up front, but by the end of the reservation process you’ll be smart enough to understand it all.

  7. How about if the Federal Government had open disclosure of all their junk fees and taxes. Start with the IRS please. The days of doing my own taxes each year are long gone. Every year the rules change.

  8. I don’t think this rule will cause nearly as much “confusion” as “consternation” and “outrage” that it has gone on for so long. Yes, perhaps it will perturb the airline travel market somewhat, but that’s long overdue. Frankly, I don’t think the effect will be all that great for the frequent fliers, due to all the brand-allegiance hooks the airlines use. One might even posit that this particular readership might be one of the least affected, as many of us have our own aircraft. But it’s a little disingenuous to argue “we are dependent on our customers being too stupid to make sense of all our larded fees”. Many other markets (houses, cars, investments, etc.) have had to do this for years.

    There’s no reason it should be more complicated than ordering a pizza.

    • Amen – take a page from the Health insurance market to see how companies can obfuscate and over-complicate what should be simple – my last two inquires to providers yielded blank stares when I asked what something would cost – they both told me to check with my insurance and the insurance told me to check with the provider – really?

  9. Administration just trying to buy votes. It’s stunt, could have done this fours years. Didn’t remove the fees, still have to pay them, if you want to get on that flight.

    • Hi, RCC! I agree with you wholeheartedly! If an administration can establish a record of doing things in the general public’s interest that should have been done a long time ago, then they’ve got my vote!

      Have a great day!

    • For once I’d like to see an INTELLIGENT conversation not ruined by some clown wanting to make it political.

  10. For perhaps the first time in his life, Mr. Buttigieg is right. Transparency isn’t confusing, but arriving at an airport for a trip and being told you have pay more than your ticket or a cancellation fee more than the extra charges is another thing altogether ( I hope I’m not giving them new ideas here).

    Why did the airlines start charging all these fees in the first place?
    Taxes on airline (revenue) tickets.
    7.5% federal excise tax
    $4.50 flight segment tax per leg x 6 (DPT/Hub/DEST) = $27
    $5.60 9/11 (TSA) tax per one way trip or $11.20 round trip.
    And then there’s the airport PFC – passenger facility fee at $4.50 for each airport you touch, for a round trip typical departure/hub/destination trip 6 airports another $27
    Total taxes = $65.70 plus 7.5% of the ticket price for a $400 ticket = $30 more or $95.70.
    So for Spirit for example, a $100 ticket has only $7.50 in excise tax, but to fly Spirit’s $100 fare, you need to pay:
    Carry on Fee: $45 Baggage Check Fee: $45 (first bag) $90 Seat Fee $18-40
    Total Fees/Charges: $115 + 2 bucks for a cup of water/coffee/soda.
    Price for flying Spirit $224.50 and the federal/local taxes=fees = $290.20
    Change fees additional.

    It wasn’t long before all the airlines jumped on this: more gross revenue, ticket taxes reduced and some savings diverted to the airline profit centers at no additional cost to the airline. Who could complain? Passengers. Then came discounts for doing on line booking and paying for everything in advance, except the change fees, more fees for printing boarding passes. Perhaps coming soon, a buck a square for toilet paper in the lav, fifty cents if you book in advance.

  11. I’m far from an expert on this, but I believe the air above the US is owned by American citizens and not the airlines (also pertains to the FCC and various companies when it comes to communications/entertainment). Why would a regulation benefiting citizens be so controversial?

  12. I agree you should have a breakdown of the fees. I think the problem is on the front page of the website. You should search for your flight with the final cost included then have a breakdown of how that money is allocated. You’re going to have read through all the disclosures and percentage of everything before you even click from origin to destination. Just present it before you submit but have the final cost included in the beginning or like the car rentals do with cost per day then the final cost. The problem is you don’t know these fees till you put in all your info like number of bags checked. Disclose in the end before purchasing not in the beginning before you even select where you’re going. In many case it is input because different airports have different fees for example

  13. The only reason “it’s confusing” for the airlines is because they want to cut these fees for people with status. Everyone (GenZ and millennials) want’s to be a VIP and be entitled to special treatment these days. Cutting fees is a marketing ploy.

    If the airlines had to list all the fees and then cross out which ones don’t apply it will be difficult to compare apples to apples. But the airlines can figure it out. It will cost them, more market studies, more analysis, more programming on the website, adjusting financial projections.

    As for the whining about taxes. At least they pay for the airport infrastructure and ATC, for the most part. Aviation benefits the nation. Except in Europe, where GA is considered a rich man’s hobby and every aspect of flying has direct payments by the pilot/owner.

    • Except in The US, where GA is considered a rich man’s hobby and every aspect of flying has direct payments by the pilot/owner.

      FTFY.

      I was going to just enjoy the comments, but this one made me laugh. I was a above average middle class Software Developer that goes his PPL in the mids 90s. By the time I got enough hours to consider IFR I realized this was not going to happen. I could have barely afford the minimum IFR requirements for currency so I stepped out.

      GA in the US is *very much* a rich person’s playground today and if you do not think that pilots in the US don’t have direct payments, one of the most basic is fuel, where do you fly?

      I miss flying very much. every time I hear a prop I need to see what and where, but about the only real value GA provides to the US aviation community is to push young pilots to commercial jobs, no doubt fairly deep in debt. A new 172 today can cost up to 500K for what ROI? Many of the existing GA fleet is over 50 years old and just maintaining them is price wise sky-rocketing, if you can get insurance.

      • Landing fees, T&G fees, flight plan and fees for using ATC in Europe to name a few. It’s one reason glider flying is much more popular there than here.

        Fuel sales and excise taxes are ‘indirect’.
        The high cost of flying these days is largely due to insurance, parts and labor costs.

        I do understand the barrier to entry of high costs these days. I’m on the board of a 501c3 non-profit that funds young pilots in gliders entirely through their CFI-G rating.

  14. I use a major hotel chain’s website to book rooms with them. The site features a small check box that allows you to see the total nightly cost of a room, including all extra fees and taxes. It’s amazing how a 169 dollar room suddenly costs 249 dollars per night. This feature allows me to determine how many nights I can afford to stay there and insures no surprises when I check out, assuming I stay out of the minibar. If the largest hotel chain in the world can do this I don’t see why our airlines won’t or can’t do it too.

  15. What is so appalling by the airlines is they winge and moan when they’re forced to be transparent with the consumer but then expect the same consumer to bail them out when things go sour – the gall!

    And we’re idiots at the gate when they say ‘if you’re Group 6 please gate check your luggage…’ and we comply – the whole carry-on circus at the gate is manufactured by the airlines themselves and based on complete greed-

  16. Siding with DOT on this one. I fly– domestic n international– about 50 x a year. It’s only once you leave the US that you realize how horrible the passenger experience has become in the US. Junk fees, delayed flights w/o compensation (we’ve made very recent strides in this direction, but a far cry from e.g. EU261 regulation), unreachable ‘customer service’ lines (I had to wait nearly 2 hours for an airline callback last week– this despite being a million miler w the airline). And take Frontier (please, somebody take Frontier!) for example: only yesterday they notified me of a schedule change to an upcoming reservation. They offered me the option of accepting the change (a non -starter, as their change was enough to screw up my plans), or accepting a travel voucher good for six months (no thanks, I’d rather stick needles in my eyes). How is an airline permitted to sell a ticket, significantly change what they sold you, and offer you a voucher not a refund?! And have you ever noticed how Frontier (and perhaps other LCCs?) sometimes claim a ‘fare’ of say $1, and ‘taxes and fees’ of $49? A blatant maneuver to avoid paying excise taxes, which are based on the base fare. What Frontier claims among its fees is an ‘access charge’– i.e., they charge you say $30 for using their website! Let the US airlines rot in hell, I say– they brought this on themselves. And don’t get me started on TSA……

  17. All costs need to be displayed up front when booking travel. Many suppliers to the travel/tourist industry have gotten away with horsepuckey tactics for way too long. The only thing that deters these parasitic people is legislation and enforcement of meaningful fines. Bring it on and it will set the standard in western society. Who knows, it may even trickle down in other places as well as cruise lines.

  18. It’s surprising how few passengers read or understand the “Contract of Carriage” when booking flights. I admit I’ve never read one. According to the Web, only about 1-2% of people read these long legal documents. For example, one of the top five U.S. airlines has a “Contract of Carriage” that’s around 27,000 words long, a 2-hour read, so most passengers don’t read it fully, or at all. These contracts mainly protect the airlines, setting out their rules and limiting their responsibilities. Passengers often don’t know these details and can be at a disadvantage in disputes, highlighting the imbalance of power between airlines and customers. KISS!

  19. Is this rule coming from the same local-state-federal government complex with countless forms of mostly-hidden taxation folded into everything we do in the “land of the free”?

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