A group of major US airlines has filed a lawsuit against the US Department of Transportation (DoT) over new legislation requiring additional service fees to be disclosed upfront for flight ticket purchases.
Some of the country’s biggest airlines including American, Delta, United, JetBlue, Hawaiian, and Alaska, along with lobbying group Airlines for America (A4A), joined together to file the suit claiming that the rules would be confusing for customers.
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A4A described the new rules as a “bad solution in search of a problem” and said: “The ancillary fee rule by the DoT will greatly confuse consumers who will be inundated with information that will only serve to complicate the buying process.
“DoT’s attempt to regulate private business operations in a thriving marketplace is beyond its authority. DoT has failed to establish that consumers are unable to obtain information about ancillary fees. To the contrary, consumers are well-aware of the existence of ancillary services fees.”
The lawsuit, which was filed at the US Fifth Circuit Court of Appeals in Louisiana, notably does not push back on the DoT’s other legislation announced last month, requiring automatic refunds when flights are cancelled or significantly altered.
Nick Wyatt, head of travel and tourism research and analysis at GlobalData, explained that the industry’s concern likely stems from uncertainty about what fees will be included in the new rules and labelled as “junk fees”.
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By GlobalDataHe said: “Some of these ancillary fees can be realistically avoided (for example, many travelers can and do travel with only cabin luggage, thus avoiding baggage charges) and the levying of these fees helps airlines to maintain the low base fares that such a traveler can benefit from.
“Viewing additional baggage fees as being on the same level as a name change fee for example, would seem to miss the nuances associated with air fare prices and the end result could be increased fares all round.”
The DoT has touted the rules as a major victory for passengers, declaring that they would save more than $500m annually in hidden fees as the industry would be forced to explain their critical fee policies before purchase and assure customers that were seats were guaranteed without paying a selection fee.
The legislation is part of a heightened focus on the aviation industry by the Biden Administration, which has been investing in airport infrastructure projects and increasing scrutiny of airlines with moves such as its block of JetBlue’s Spirit merger.
Aron Solomon, chief strategy officer at legal marketing firm Amplify, said that the lawsuit may further increase tensions, he said: “Through the purely legal rather than consumer lens, I think there’s a decent chance that this lawsuit will exacerbate the already strained relationship between the U.S. aviation sector and the DoT.
“The idea that the dynamics of the lawsuit could pave the way for more negotiated solutions, is probably overly optimistic. I think more tension is going to make it tougher to have cooperative regulatory talks.”
