The Potential for Regulated Ancillary Fee Disclosures

Should the federal government make airlines provide ancillary fee data in every channel they list fares? The answer to that question has been subject to heated industry debate. Yet, when it comes to a firm answer, the U.S. Department of Transportation has delayed, deferred and dawdled.

The Enhancing Airline Passenger Protections is a three-part series of consumer protection rules and a hallmark of the U.S. Department of Transportation under the Obama administration. Now enacted, the first batch set the airline tarmac-delay limit to three hours and the second installment imposed new airline advertising rules, among other regulations. The long-awaited third installment comes closer to corporate travel distribution—if it ever gets finalized, that is.

The rulemaking proposes a ban against undisclosed biasing by carriers and ticket agents in fare displays, new customer service standards for large travel agencies and a clearer definition of “ticket agent.” 

Yet, the most contentious and far reaching is a requirement for airlines to disclose data to sales channels on “basic” ancillary fees, comprising “first checked bag, second checked bag, one carry-on item and advance seat selection, to the extent these options are offered by the carrier,” according to the DOT.

Some groups—including the American Society of Travel Agents and The Travel Technology Association, the trade body for global distribution systems and online travel agencies—want the DOT’s requirement to go further than mere disclosure. They advocate for “transactability,” that is, the ability for buyers of travel not just to see the cost but also to buy basic ancillary fees.

On the contrary, airline lobbying organization Airlines for America says the federal government is meddling with the market. After all, the market has made progress facilitating ancillary data and sales in sales channels without the strong arm of government.

It’s a long shot that the DOT will require “transactability,” but further fee disclosures are quite possible.

It has been a long time coming. The DOT considered the provision in its second batch of consumer rules, but in 2011, it deferred on the requirement. After more delay, the DOT finally issued a notice of proposed rulemaking in May 2014, kicking off a public review that garnered hundreds of comments.

Since then, the DOT repeatedly has pushed back issuance of the final rules. In August last year, it pushed the target date from December 2015 to April 2016. A more recent status report shows the rules won’t be finalized until the end of June.

There’s hardly a guarantee that the DOT will meet that target, but as we enter the last year of the Obama administration, expect action at some point this year.