The department said in a notice posted online Thursday that it is withdrawing the proposed rule, along with a second, early-stage rulemaking to force airlines to disclose more information about their revenue from fees charged for extra services, because the rules would have been "of limited public benefit." It also said airlines would incur "significant costs" if required to report their revenue from fees for services like early boarding or extra legroom.
Work on the proposals was frozen shortly after President Donald Trump took office.
Airlines are already required to disclose bag fees, but critics say the information is often hidden until after consumers have taken several steps toward purchasing a ticket and isn't always clear. Travel agents and websites that sell tickets also complain that airlines sometimes withhold information on fees, preventing third-party sellers from providing consumers with the full cost of the airfare.
Airlines for America, an airline industry trade association, praised the administration and Transportation Secretary Elaine Chao for "recognizing that airlines, like all other businesses, need the freedom to determine which third-parties they do business with and how best to market, display and sell their products."
Congressional Democrats and consumer groups decried the withdrawals, saying they would have protected airline passengers by providing greater transparency of airfares and fees.
Since 2008, when airlines began introducing new and higher "ancillary" fees for services such as checking baggage and making changes to reservations, the true cost of flying has become more opaque, the Consumers Union said in a statement. Shoppers are being denied the basic ability to compare costs as they are shopping, as some airlines withhold critical pricing on fares and fees, both from their own websites and from third-party ticket sellers such as online travel agency sites, the group said.
"The administration is turning its back on airline passengers just before families are about to head home for the holidays," said Sen. Bill Nelson of Florida, the senior Democrat on the Senate committee that oversees the airline industry.
Charles Leocha, chairman of Travelers United, said passengers have no one to protect them from unfair airline practices except the Transportation Department, since no other federal or state agency regulates air carriers.
"It is a dereliction of duty for the DOT to stop its review of unfair and deceptive pricing of ancillary fees, which make it impossible for consumers to comparison shop for the best costs of airfare," he said.
Besides scuttling the fee transparency proposals, the Transportation Department has also failed to issue regulations mandated by Congress last year to require airlines to refund fees charged for checked bags that are delayed and to ensure families with young children can sit together on planes, Nelson said.
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