DOT WITHDRAWS TWO MAJOR PROPOSED RULEMAKINGS
January 12, 2018
On Thursday, December 7, 2017, the U.S. Department of Transportation withdrew two significant notices of proposed rulemaking (NPRM) that would have resulted in costly implementation and compliance obligations on the airline industry. The decision corresponds with DOT and Trump Administration priorities of reducing unnecessary regulation on industry, and is consistent with Executive Order 13771, entitled “Reducing Regulation and Controlling Regulatory Costs” that was issued earlier this year. The proposed rulemakings being withdrawn are:
- Transparency of Airline Ancillary Service Fees Supplemental NPRM
This supplemental notice of proposed rulemaking was issued on January 9, 2017 and 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. The SNPRM also proposed to require airlines to provide useable, current, and accurate baggage fee information to ticket agents, including Global Distribution Systems (GDSs) and metasearch entities, and proposed to allow both airlines and ticket agents to permit customers to opt-out of receiving baggage fee information when using their websites. In making its decision to withdraw the SNPRM, DOT noted that its “existing regulations already provide consumers some information regarding fees for ancillary services” thus making additional rulemaking unnecessary.
- Ancillary Airline Passenger Revenues NPRM
This notice of proposed rulemaking was issued on July 7, 2011, and proposed to collect detailed revenue information on airline-imposed fees from large domestic certificated air carriers. Specifically, the NPRM proposed to create two stand-alone reporting forms to capture ancillary revenues. It also proposed to define ancillary revenues as those charges paid by airline passengers that are not included in the standard ticket fare. The Department also solicited comments on which items should be identified as ancillary revenues, and proposed to collect data on nearly 20 separate charges for optional services, including baggage fees and on-board food and services. DOT received approximately 280 comments. Consumer rights groups were in favor of the NPRM but most airlines and industry organizations commented that the rule, as proposed, would not increase public benefit or transparency of pricing.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).
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