Critics of perceived federal government overreach regarding US airline industry regulation were handed a victory Dec. 7 as the US Department of Transportation (DOT) withdrew two proposed rules that would have forced US airlines to collect and publish detailed data on ancillary revenues and disclose baggage fees to passengers at point-of-sale, respectively.
“The department is withdrawing these rulemakings because they are of limited public benefit,” DOT said, adding that the withdrawals correspond “with the department’s and administration’s priorities and is consistent with [President Donald Trump’s] Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs, January 30, 2017.”
In its decision, DOT specifically targeted a July 15, 2011 Notice of Proposed Rulemaking (NPRM) that proposed to collect detailed revenue information regarding airline-imposed fees from air carriers meeting the definition of a large certificated air carrier. DOT said the rulemaking was being withdrawn “in light of comments we received.”
The second withdrawal was aimed at a supplemental NPRM on “Transparency of Airline Ancillary Service Fees” issued Jan. 9—in the waning days of former President Obama’s term—that proposed to require air carriers, foreign air carriers, and ticket agents to clearly disclose to consumers at all points of sale customer-specific fee information, or itinerary-specific information if a customer elects not to provide customer-specific information, for a first checked bag, a second checked bag, and one carry-on bag wherever fare and schedule information is provided to consumers. DOT offered no further explanation for the withdrawal other than to say it was consistent with President Donald Trump’s Jan. 30 executive order to reduce regulation and control costs.
US airline industry advocate group Airlines for America (A4A), which had been critical of the Obama administration’s efforts at increased regulation, was supportive of DOT’s decision.
“We commend the Administration, under the leadership of Secretary Elaine Chao, for their ongoing commitment to ushering in a new era of smarter regulation focusing on jobs and economic growth, while recognizing that airlines, like all other businesses, need the freedom to determine which third-parties they do business with how best to market, display and sell their products,” A4A said in an emailed statement to ATW. “We continue to believe that dictating to the airline industry distribution and commercial practices would only benefit those third parties who distribute tickets, not the flying public. Through more effective, efficient and modern regulation our industry will continue to serve as an indispensable driver of jobs and better positioned to compete in a global marketplace.”
DOT’s action put an end to two Obama Administration-era attempts to order US airlines to provide greater transparency for passengers buying an airplane ticket. In December 2016, the White House National Economic council released a report entitled “The Competition Initiative and Hidden Fees,” in which the outgoing Obama Administration detailed “hidden fees” in airlines tickets (in addition to other goods and services), such as charges for checked bags and ticket change fees, and called for the growth in such fees to be mitigated or eliminated.
Opponents blasted the original rules when they were proposed. In January, an IATA spokesperson told ATW that the baggage fee supplemental Notice of Proposed Rulemaking (NPRM) was “yet another DOT intrusion into the commercial marketplace that is completely contrary to the principles of airline deregulation … DOT already mandated that airlines make their ancillary fees available on their websites and airlines did so.”
Advocates of transparency efforts were swift to condemn DOT’s actions. Consumer advocacy group Travelers United protested the withdrawal of ancillary airline passenger revenue proposed rule, accusing DOT of dereliction of duty. “This rulemaking has been in play for half-a-decade with thousands of pages of testimony and comments from consumers and all travel stakeholders,” Travelers United chairman Charlie Leocha told ATW. “The claim that this rulemaking is ‘of limited public benefit’ is simply not true.”
In a separate statement, Air Travel Fairness Coalition executive director Kurt Ebenhoch told ATW that DOT’s decisions yesterday were “anti-consumer actions … the DOT asked all of the industries it regulates what current and proposed regulatory actions they’d like to see discontinued or eliminated. This is a product of that effort and consumers will suffer as a result.”
Mark Nensel mark.nensel@informa.com
