Enhancing Transparency of Airline Ancillary Service Fees rule (2024)
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The Enhancing Transparency of Airline Ancillary Service Fees rule is a significant rule issued by the U.S. Department of Transportation (DOT) effective July 1, 2024, that required airlines to disclose all passenger- or itinerary-specific fees for services for flights to, within, or from the United States. DOT issued this rule pursuant to its authority under 49 U.S.C. 41712(a).[1]
Timeline
The following timeline details key rulemaking activity:
- July 1, 2024: The final rule took effect.[1]
- April 30, 2024: DOT issued the final rule.[1]
- January 23, 2023: The comment period closed.[1]
- October 20, 2022: DOT issued the proposed rule and opened the comment period.[1]
- March 20, 2017: The comment period closed.[1]
- January 19, 2017: DOT issued a supplemental notice of proposed rulemaking and opened the comment period.[1]
- August 21, 2014: The comment period closed.[1]
- May 23, 2014: DOT issued a proposed rule and opened the comment period.[1]
Background
49 U.S.C. 41712(a) authorized the U.S. Department of Transportation (DOT) to identify and address what it deems to be unfair or deceptive practices by airlines or air carriers. President Joe Biden (D) issued Executive Order (E.O.) 14036 on July 9, 2021, entitled "Promoting Competition in the American Economy" that recommended DOT issue rules to ensure consumers have information regarding baggage fees, change fees, or cancellation fees at the time of the ticket purchase to enhance consumer protection and competition in the economy.[1]
Prior to E.O. 14036, DOT issued a final rule in 2011 with fee disclosure requirements for airlines. DOT later issued two proposed rules in 2014 and 2017, respectively, aiming to enhance consumer protection, but subsequently decided not to issue accompanying final rules regarding airline disclosure of ancillary fees. E.O. 14036 encouraged DOT to implement fee disclosure requirements with consideration to the comments received from the two proposed rules, as well as hearings DOT held regarding airline fee disclosures.[1]
Summary of the rule
The following is a summary of the rule from the rule's entry in the Federal Register:[1]
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The U.S. Department of Transportation (Department or DOT) is issuing a final rule to strengthen protections for consumers by ensuring that they have access to fee information for transporting baggage and changing or canceling a flight before ticket purchase. Under the final rule, U.S. air carriers, foreign air carriers, and ticket agents must clearly disclose passenger-specific or itinerary-specific fees for these services to consumers whenever fare and schedule information is provided for flights to, within, and from the United States. The Department is further requiring that carriers provide useable, current, and accurate information regarding fees for these critical ancillary services to any entity that is required to disclose critical ancillary service fee information to consumers. This final rule is in response to the Executive order on Promoting Competition in the American Economy, which directs the Department to take various actions to promote the interests of American workers, businesses, and consumers. The rule will ensure that consumers have the information they need to understand the true costs of air transportation that apply to them, which will create a more competitive market with better outcomes for consumers.[2] |
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Summary of provisions
The following is a summary of the provisions from the rule's entry in the Federal Register:[1]
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Covered Entities The final rule applies to U.S. air carriers, foreign air carriers, and ticket agents (excluding corporate travel agents) that advertise or sell air transportation directly to consumers. The Department defers for a later rulemaking the determination of whether metasearch sites that do not sell airline tickets but display airline flight search options directly to consumers are ticket agents that must disclose ancillary fee information required by this rule. Critical Ancillary Services The rule defines critical ancillary services as any ancillary service critical to consumers' purchasing decisions. The ancillary services that this final rule identifies as critical to consumers are as follows: (1) transporting a first checked bag, second checked bag, and carry-on bag; and (2) changing or canceling a reservation. Any other service may also be determined, after notice and opportunity to comment, to be critical by the Secretary. Disclosure of Fees and Policies for Critical Ancillary Services The final rule requires airlines and ticket agents to disclose fees for critical ancillary services during the itinerary search process at the first point where a fare and schedule is provided in connection with a specific flight itinerary. The fee disclosure includes noting that a fare category does not allow changing or canceling a reservation or transporting a checked or carry-on bag if that is the case. Policies for critical ancillary services must be disclosed before ticket purchase when a search is conducted online but are not required to be disclosed with the fare and schedule. The information disclosed must be accurate, clear, and conspicuous. Fees cannot be displayed through a hyperlink, but disclosure is permitted using pop-ups, expandable text, or other means. Links to Book a Flight with a Carrier or an Online Travel Agency (OTA) This final rule requires airlines and ticket agents that sell airline tickets to disclose critical ancillary service fees on the first page of their online platforms to which consumers are directed after searching for flight options on another entity's online platform (a metasearch site) unless the consumer was already provided accurate fee information on the directing entity's online platform. Passenger-Specific and Anonymous Searches This final rule requires carriers and ticket agents to disclose the fees for critical ancillary services as passenger-specific itinerary information if a consumer conducts a passenger-specific itinerary search. A passenger-specific itinerary search refers to a search that takes into account information specific to the passenger (e.g., the passenger's status in the airline's frequent flyer program, the passenger's military status, or the passenger's status as a holder of a particular credit card) that was affirmatively provided by that passenger and information specific to the itinerary (e.g., geography, travel dates, cabin class, and ticketed fare class such as full fare ticket) that may impact the critical ancillary service fees to be charged or policies to be applied. An anonymous itinerary search refers to a search that does not take into account information specific to the passenger but does take into account information specific to the itinerary (e.g., geography, travel dates, cabin class, and ticketed fare class such as full fare ticket) that may impact the critical ancillary service fees to be charged or policies to be applied. Opting Out of Disclosures The final rule does not permit airlines and ticket agents to omit disclosure of first checked, second checked, or carry-on baggage fees with the fare and schedule information on their online platform unless: (1) the airline/ticket agent asks consumers at the beginning of a search if they intend to travel with a carry-on bag or checked bags; and (2) a consumer affirmatively indicates that no one in the booking party intends to travel with carry-on bag or first or second checked bags. The final rule does not permit airlines or ticket agents to enable consumers to opt out of display of change and cancellation fees on the airline's or ticket agent's online platform. Disclosures on Online Platforms The final rule requires airlines and ticket agents to disclose the fees and policies for critical ancillary services on airlines' or ticket agents' online platforms. The final rule defines 'online platforms' to be any interactive electronic medium, including, but not limited to, websites and mobile applications, that allow the consumer to search for or purchase air transportation from a U.S. carrier, foreign carrier, or ticket agent. Offline (Telephone, In-person) Disclosures of Airline Ancillary Service Fees The final rule requires airlines and ticket agents to disclose to consumers during an in-person or telephone inquiry that critical ancillary fees apply if that is the case and upon request disclose those fees to consumers. Sharing of Airline Ancillary Service Fee Information This final rule requires airlines to provide critical ancillary fee information to any entity that is required to disclose critical ancillary service fee information to consumers. Percentage-Off Advertisements The final rule requires airlines and ticket agents that advertise percentage-off discounts of a 'flight,' 'ticket,' or 'fare' to apply the percentage-off discount to the full fare (i.e., all mandatory government taxes/fees and carrier-imposed charges/fees). The final rule requires airlines and ticket agents that advertise percentage-off discounts of a “base fare” to apply the percentage-off discount to the full fare amount excluding all government taxes and charges (i.e. all mandatory carrier-imposed charges/fees). Compliance/Implementation Period The final rule requires that: (1) airlines must provide required critical ancillary fee data to ticket agents not later than six months after this rule's publication date, or October 30, 2024; (2) airlines must comply with all other regulatory requirements no later than 12 months after this rule's publication date, or April 30, 2025; (3) ticket agents that do not meet the Small Business Administration (SBA) definition of small entity must comply with all regulatory requirements no later than 18 months after this rule's publication date, or October 30, 2025; and (4) ticket agents that that meet the SBA definition of small entity must comply with all regulatory requirements no later than 24 months after this rule's publication date, or April 30, 2026.[2] |
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Significant impact
- See also: Significant regulatory action
Executive Order 12866, issued by President Bill Clinton (D) in 1993, directed the Office of Management and Budget (OMB) to determine which agency rules qualify as significant rules and thus are subject to OMB review.
Significant rules have had or might have a large impact on the economy, environment, public health, or state or local governments. These actions may also conflict with other rules or presidential priorities. Executive Order 12866 further defined an economically significant rule as a significant rule with an associated economic impact of $100 million or more. Executive Order 14094, issued by President Joe Biden (D) on April 6, 2023, made changes to Executive Order 12866, including referring to economically significant rules as section 3(f)(1) significant rules and raising the monetary threshold for economic significance to $200 million or more.[1]
The text of the Enhancing Transparency of Airline Ancillary Service Fees rule states that OMB deemed this rule a section 3(f)(1) rule under E.O. 12866, as amended by E.O. 14094:
| “ | The final rule meets the threshold for a significant regulatory action as defined in section (3)(f)(1) of E.O. 12866, 'Regulatory Planning and Review,' as amended by E.O. 14094, 'Modernizing Regulatory Review,' because it is likely to have an annual effect on the economy of $200 million or more.[2] | ” |
Text of the rule
The full text of the rule is available below:[1]
See also
External links
Footnotes
- ↑ 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 Federal Register, "Enhancing Transparency of Airline Ancillary Service Fees," May 16, 2024
- ↑ 2.0 2.1 2.2 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
