Erin Witte, director of consumer protection for the Federation of America’s consumers, explains why a federal court has interrupted the transparency rule for airlines.
A rule that would have required the the largest airlines in the country To disclose all service costs – such as additional luggage costs or reservation change costs – was blocked by a federal court of appeal, threatening its chances of taking effect.
The Ministry of Transport (DOT), which argued that travelers too paid for their prices because of the so-called “waste costs”, said in a report that the rule would have allowed consumers of more than $ 500 million per year. On the other hand, the commercial group of the largest airlines in the country argued that nothing in the conclusions of the ministry which proved that the rule would help consumers, even saying that this would interfere with the efforts of airlines to meet the needs of customers.
The United States Court of Appeal for the fifth circuit does not have the side of one or the other argument. Instead, he judged that the dowry “failed to fully comply with the requirements” under the administrative procedure law, which governs the process by which federal agencies develop and issue regulations. The court has always confirmed the law of the ministry to impose such rules and rather referred the case to the dowry so that the airlines and others can comment on the cost savings which estimated that the passengers would benefit the passengers by returning Some more transparent costs.
Under the Biden administration rule, airlines would be required to list the costs associated with the purchase of a ticket, otherwise known in the industry as “accessory costs”. The dowry – then led by Pete Buttigieg – spent years fighting for this rule, saying that the airlines pocket billions of dollars from unexpected luggage, seats, changes and cancellation. During the buttigieg mandate, the dowry issued more than $ 164 million in penalties against airlines for consumer protection violations.
Travelers meet with their luggage in the International Terminal of Los Angeles International Airport (LAX) before the July 4 travel period on June 25, 2024 in Los Angeles, California. (Mario Tama / Getty Images / Viral Press)
Airlines for America, the commercial group representing major American carriers such as American Airlines, JetBlue and Alaska Airlines, was satisfied with the decision, claiming that the court recognized that the ministry “was based on information that the public and the Airlines had never had the opportunity to assess or comment. ”
The group argued that a law of lawful comments would have revealed that the rule “would interfere with the long -standing efforts of the airlines to meet the needs of customers”. He also declared that operators invest in websites and friendly applications that offer transparent prices and that this “rule embodies regulatory exceeding that confuses consumers who would be flooded with information that would only be complicated ‘purchase”.
Erin Witte, director of consumer protection for the American consumer federation, said it was not a “total victory” for the air transport industry.
“What they really were looking for was completely canceling the authority of the dowry to issue rules based on unjust and misleading conduct,” said Witte. “And the fifth circuit traced the line and said,” No, we are not going so far. “”
Although the court’s action may end up being the catalyst for killing the rule, she said it was important to note that the The court also did not block the rule permanently.
This means that the current administration could implement a similar rule, as long as the ministry follows the appropriate procedure. However, Witte is not confident that this will happen.
Ryan Bourne, economist at Cato Institute, told Fox Business that this case will be a priority for President Donald Trump, who launched a Massive deregulation initiative By taking up his duties. Bourne is not in favor of the move, claiming that “the rule was still unnecessary administrative formalities”. He also agreed with airlines that the rule would only confuse passengers.
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Travelers are waiting to get on a Boeing 737 Max 8 plane operated by United Airlines at Newark Liberty International Airport in Newark, New Jersey, on March 13, 2024. (Bing Guan / Bloomberg via Getty Images / Getty Images)
“Most passengers know flights enough and know that you can pay additional fees for services such as bag verification or have flights that you can cancel at any time,” he said. “Demanding that airlines exhibit the total prices grouped for all these services in advance would be confused for customers and damage caused to competition by distorting low -cost travel opportunities on budget airlines.”
Bill McGee, principal researcher of aviation at the American Economic Liberties Project, firmly criticized the argument that it would overload consumers, calling him one of the most “weakest” arguments he has ever seen. McGee argued that if airlines can quickly implement costs – sometimes overnight – they should also be able to inform customers about them.
“There is a sticker shock in airlines … That’s what it is about,” said McGee. “It’s a really very simple premise …
Passengers and on -board agents on board a flight from Laguardia airport to Kansas City International Airport on May 4, 2022, in Queens, New York. (Kent Nishimura / Los Angeles Times via Getty Images / Getty Images)
Witte also questioned the decline in airlines, since the rule did not speak either of a total ban on junk food costs.
“This has not even prohibited airlines to charge them. I think voters would likely have supported this kind of rule,” she said. “The whole rule has been said, tell people, tell them from the start, facilitate the determination of the quantity of theft from A to B and bring a bag.”
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McGee still considers the decision as a “huge victory” because some people feared that “the court would say that the point had never had the power to do it in the first place”.
