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US Court of appeals to review airline fee decision

On Thursday, a federal appeals court said that it would reconsider its recent ruling that the U.S. Department of Transportation was authorized to require airlines fully disclose all fees upfront when customers book flights.

In a short order, the Fifth U.S. The 17 judges of the New Orleans Circuit Court of Appeals will review a decision made by a three judge panel on January 28, "en bloc".

Several major airlines have challenged a rule that was issued to protect consumers in April 2024, during the Biden Administration. The rule required ticket agents and airlines to disclose "ancillary charges" like baggage fees during the booking process.

Alaska Airlines, American Airlines Delta Air Lines JetBlue United Airlines and three industry groups, including Airlines for America, objected to the rules, claiming that federal law did not give the Transportation Department any power to make such rules.

The rule was put on hold by the appeals court in July 2024.

In a January ruling, the court ruled that the Transportation Department has the authority to create fee disclosure rules that address the "unfair or misleading practices" of airlines.

The agency was criticized for not allowing airlines to comment on the study that it used to evaluate the potential impact of the new fee rule.

Instead of canceling the rule, the appeals court sent the case back to the Transportation Department.

The airlines stated that adopting this rule would "upend how airlines interact with customers at great cost and without any demonstrated benefit."

The Transportation Department opposed the rehearing stating that the appeals court had "properly used its discretion" by remanding this rule.

The lawyers of the airline did not respond immediately to comments. Airlines for America refused to comment.

Requests for comment were not immediately answered by the Transportation Department or the U.S. Department of Justice.

The 5th Circuit is a conservative federal appellate court. It has not announced when it will hold oral arguments.

Airlines for America et al v Department of Transportation is the case. Circuit Court of Appeals No. 24-60231. Reporting by Jonathan Stempel, New York; editing by Jamie Freed

(source: Reuters)