The panel’s decision drew a rebuke from Transportation Secretary Pete Buttigieg, who said in a message posted on X that the department will continue to defend the rule.
“The airline industry lobby is trying to tie this up with lawsuits, but we will not back down from protecting passengers. Airlines are simply wrong to argue that merely having to disclose their fees would ‘irreparably harm’ them. It’s common sense,” Buttigieg said.
Airlines for America, the group that joined airlines in the case, did not comment on the panel’s ruling.
The rule would have required airlines or flight booking sites to tell consumers what the fees are for checking a first or second bag, for carrying on a bag and changing or canceling a reservation the first time the fare is provided.
Buttigieg said the rule would bring more transparency to the ticket buying process, which has grown more complex as airlines have sought to boost revenue by adding fees for services that used to be included in the ticket price. The Transportation Department estimated the rule could save travelers more than $500 million a year.
Airlines, however, blasted the rule, which was set to go into effect July 1, as overreach.
In a petition filed in May with the appeals court, they characterized it as “arbitrary, capricious” and beyond the Transportation Department’s authority.
The panel’s decision on Monday means the rule will be on hold pending further proceedings before the court.
The fee disclosure rule is part of President Biden’s effort to target “junk fees” and ensure that consumers aren’t misled when they purchase airline tickets.
Customers, particularly those who aren’t frequent travelers, aren’t always aware they must pay additional fees for checked bags or itinerary changes. Such ancillary fees have become a huge revenue generator for airlines. According to the Bureau of Transportation Statistics, airlines collected nearly $5.5 billion in baggage fees alone last year.
This and other rules regarding refunds were spurred in part by the record number of complaints that the Biden administration received during the coronavirus pandemic. Consumers alleged that airlines and ticket agents delayed or refused to provide refunds when millions of passengers stopped flying during the height of the pandemic.
Airlines have generally opposed new regulations and disputed the contention that they are not responsive to consumer concerns, arguing that it is in their best interest to provide consumers with a positive experience.
Buttigieg criticized Delta Air Lines this month for flight cancellations and delays that stretched for nearly a week and affected 500,000 customers following a global IT outage earlier this month caused by a defective update for CrowdStrike security software. He announced the department would investigate why Delta stumbled even as its rivals quickly recovered and whether it broke rules including one that requires it provide cash refunds to customers who seek them. Regulators launched a similar probe of Southwest after a December 2022 meltdown and fined the carrier $140 million.