Today, at a meeting of the White House Competition Council, President Biden will announce the release of a new proposed rule that would significantly strengthen protections for consumers by ensuring that they have access to certain fee information before they purchase their airline tickets. Under the proposed rule, airlines and travel search websites would have to disclose upfront — the first time an airfare is displayed — any fees charged to sit with your child, for changing or cancelling your flight, and for checked or carry-on baggage. The proposal seeks to provide customers the information they need to choose the best deal. Otherwise, surprise fees can add up quickly and overcome what may look at first to be a cheap fare.
This rulemaking is in response to President Biden’s Executive Order on Promoting Competition in the American Economy, which established a whole-of-government effort to help lower prices for consumers, raise wages for workers and promote innovation throughout the economy by promoting competition.
At today’s White House Competition Council meeting, Biden will applaud the Department of Transportation’s action and call on all federal agencies to use their powers to expose and limit fees to help save American families money. The President will discuss how similar unfair, hidden fee practices plague customers in other industries as well — such as internet provider fees and bank and credit overdraft and late fees.
“Airline passengers deserve to know the full, true cost of their flights before they buy a ticket,” said U.S. Transportation Secretary Pete Buttigieg. “This new proposed rule would require airlines to be transparent with customers about the fees they charge, which will help travelers make informed decisions and save money.”
Under the department’s proposal, U.S. air carriers, foreign air carriers, and ticket agents (third-party sellers of air transportation and online “metasearch” sites that display air travel options) would be required to clearly disclose passenger-specific or itinerary-specific baggage fees, change fees, cancellation fees, and family seating fees to consumers whenever fare and schedule information is provided to consumers for flights to, within, and from the United States. These fees would be required to be displayed as passenger-specific or itinerary-specific based on the consumer’s choice. Because seat availability and fees can fluctuate frequently, the department is also proposing to require carriers and ticket agents to enable consumers traveling with a young child to purchase the seats with the fare at all points of sale.
The department further proposes to require that carriers provide useable, current, and accurate information regarding baggage fees, change fees, cancellation fees, and adjacent seating fees for families traveling with young children, if any, to ticket agents that sell or display the carrier’s fare and schedule information.
The President’s Competition EO includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition problems across the nation's economy. It recognizes that for decades, corporate consolidation has been accelerating. In over 75% of U.S. industries, a smaller number of large companies now control more of the business than they did 20 years ago. That lack of competition drives up prices for consumers and drives down wages for workers. The EO also established a White House Competition Council, of which Buttigieg is a member, to monitor progress on the initiatives and to coordinate the federal government’s response to the rising power of large corporations in the economy. This rulemaking responds to the EO, which directs the department to take various actions to promote the interests of American workers, businesses, and consumers, including considering initiating a rulemaking to ensure that consumers have ancillary fee information at the time of ticket purchase.
The department encourages members of the public and interested parties to submit comments on this Notice of Proposed Rulemaking (NRPM). Comments must be received within 60 days of the date the notice is published in the Federal Register. The NPRM can be found at https://www.transportation.gov/airconsumer/latest-news and at regulations.gov, docket number DOT-OST-2022-0109.
The issuance of the Enhancing Transparency of Airline Ancillary Service Fees NPRM is one of the many steps the department is taking to protect consumers. Below are additional actions DOT has taken:
• Earlier this month, the department rolled out a new airline customer service dashboard to help consumers determine what they are owed when a flight is cancelled or delayed because of an airline issue. Previously, none of the 10 largest U.S. airlines guaranteed meals or hotels when a delay or cancellation was within the airlines’ control, and only one offered free rebooking. However, after Buttigieg called on airlines to improve their service and thanks to the creation of this dashboard, nine airlines now guarantee meals and hotels when an airline issue causes a cancellation or delay and all ten guarantee free rebooking.
• The department is currently collecting comments on a proposed rule to ensure customers get prompt refunds when their flights are cancelled or delayed. If adopted the proposed rule would: 1) require airlines to proactively inform passengers that they have a right to receive a refund when a flight is canceled or significantly changed, and 2) define a significant change and cancellation that would entitle a consumer to a refund. The rule would also 3) require airlines to provide non-expiring vouchers or travel credits when people can’t travel because they have COVID-19 or other communicable diseases; and 4) require airlines that receive significant government assistance related to a pandemic to issue refunds instead of non-expiring travel credits or vouchers when passengers are unable or advised not to travel because of a serious communicable disease. The Department is also considering options for an additional rulemaking that would further expand the rights of airline passengers who experience flight disruptions.
• The department has proposed a rule to refund passengers for services they paid for that aren’t actually provided (e.g., broken Wi-Fi).
• The department’s Office of Aviation Consumer Protection recently concluded its investigation of 10 airlines and is pursuing enforcement action against them for extreme delays in providing refunds for flights the airlines canceled or significantly changed. The office is actively investigating refund practices of additional airlines flying to, from, or within the United States. In November 2021, the Department’s Office of Aviation Consumer Protection issued its largest fine ever for extreme delays in providing refunds to thousands of consumers for flights to or from the United States that a carrier canceled.