A ruling by a federal appeals court has blocked implementation of a Biden administration-era rule that would have required US airlines to disclose upfront any so-called ‘junk fees,’ such as for extra baggage or reservation changes. Under the rule, airlines would have been had to disclose extra fees prior to customers making their final purchase.

The decision by the US Court of Appeals for the Fifth Circuit comes in response to a lawsuit filed by Airlines For America, the industry trade organization, against the Department of Transportation.

The DOT instituted the rule to require airlines to prominently display all fees associated with a booking. In a report, the agency claimed the rule would have saved consumers more than $500 million annually in baggage, seating, change and cancelation fees that it said were not transparently communicated to consumers. 

The A4A suit argued that consumers would be confused by the rule, and further that there was nothing in the department’s findings that proved the rule would help consumers.

The court ruled that DOT has the authority to write a fee disclosure rule that specifically addresses unfair or deceptive practices. However, in this case, DOT had “failed to fully comply with the requirements” under the Administrative Procedure Act, which governs the process by which federal agencies develop and issue regulations.

Instead, the matter is back in the hands of DOT, where the rulemaking process may be reopened to give airlines and other interested parties an opportunity to comment on the research the department used to estimate the cost savings to consumer. But whether the department will revisit the rule under the new administration remains to be seen.

In a statement, A4A applauded the decision, saying the court had recognized that the department “relied on information which the public and airlines were never given an opportunity to evaluate or comment on.”

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