Airlines challenge Biden administration fee disclosure rule

Major airlines and an industry trade association asked a federal appeals court to toss out a new Department of Transportation rule requiring earlier disclosure of add-on fees during flight booking.

The challengers — trade group Airlines for America, and Alaska, American, Delta, Hawaiian, JetBlue and United airlines — argue the DOT exceeded its legal authority when it published the rule, in late April, and that the rule is “arbitrary, capricious” and an “abuse of discretion.”

The petition for review was filed in the U.S. Fifth Circuit Court of Appeals late Friday.

The Biden administration introduced the airline fee disclosure rule in September 2022. It requires airlines and online travel agencies to disclose fees for seat selection, checked baggage and other add-ons upfront alongside the airfare, rather than adding the costs at checkout based on a customer’s selections.

“You should know the full cost of your ticket, right when you’re comparison shopping,” President Joe Biden said at the time.

Airlines for America said in a statement to CNBC on Monday that the rule will “confuse consumers” and “complicate the buying process.”

“Airlines already provide consumers with complete disclosure of all fees associated with air travel before they purchase a ticket,” the group said in the statement. “DOT’s attempt to regulate private business operations in a thriving marketplace is beyond its authority … The DOT ancillary rule is a bad solution in search of a problem.”