The Biden administration’s war against junk fees has taken to the skies. On Wednesday, the U.S. Department of Transportation (DOT) announced that it has finalized new rules requiring upfront notification and disclosure of “surprise junk fees” when travelers purchase airline tickets.
“The rule requires airlines and ticket agents to tell consumers upfront what fees they charge for a first or second checked bag, a carry-on bag, and for canceling or changing a reservation,” reads a press release from the DOT, adding that the new rule “will help consumers avoid unneeded or unexpected fees that can increase quickly and add significant cost to what may, at first, look like a less expensive ticket.”
Accordingly, airlines will be required to provide passengers with “automatic cash refunds when owed because their flights are cancelled or significantly changed, their checked bags are significantly delayed, or the ancillary services, like Wi-Fi, they purchased are not provided.”
The DOT estimates that the new rule will save travelers more than $500 million per year.
Here are more specifics about the rule changes:
- Fee disclosures: Airlines and ticket agents are required to display certain fees upfront, and individually. Information related to fees must also be provided to “relevant companies” (such as third-party platforms), so that consumers can access it no matter where they are purchasing tickets. There are also new guidelines related to passenger-specific fees, such as those related to rewards programs.
- Fee policy explanations: Airlines and ticket agents must explain the airline’s baggage, change, and cancellation policies before travelers buy a ticket—that includes weight and dimension limitations.
- Seat-selection notices: Airlines must tell travelers that seats are guaranteed. If offering seat selection for purchase, travelers must be given the following notice: “A seat is included in your fare. You are not required to purchase a seat assignment to travel. If you decide to purchase a ticket and do not select a seat prior to purchase, a seat will be provided to you without additional charge when you travel.”
- Addressing bait-and-switch tactics: Airlines cannot use “bait-and-switch tactics” that may be used to hide the “true cost of discounted flights.” Given that some airlines would offer “deceptive” discounts that often only apply to a portion of a ticket price, the new rules stop airlines from advertising such discounts that don’t apply to full fares.
Airline fees are the latest to be targeted by the Biden administration, which has made getting rid of “junk fees” a priority. Last year, the Federal Trade Commission (FTC) announced new rules targeting junk fees, which it described as “hidden and bogus fees that can harm consumers and undercut businesses.” Following that announcement, the administration has enacted new rules designed to nix junk fees related to retirement planning and credit cards.
Reached for comment about the new rules by Fast Company, the industry trade group Airlines for America said airlines already offer “transparency and vast choice to consumers from first search to touchdown” and that “U.S. airlines are committed to providing the highest quality of service, which includes clarity regarding prices, fees and ticket terms.”