Home News Airline 'junk fares' can no longer go unnoticed, according to new rule

Airline 'junk fares' can no longer go unnoticed, according to new rule

by SuperiorInvest

Key takeaways

  • The U.S. Department of Transportation finalized a rule Wednesday morning that requires airlines and travel agencies to disclose advance charges for checked baggage and the cancellation or change of a reservation.
  • The department said this rule will save travelers more than $500 million each year by uncovering unexpected fees.
  • It's the latest round in President Joe Biden's fight against so-called “junk tariffs,” which are unexpected for consumers and considered excessive compared to costs.

Travelers will have more transparency about how much their ticket will cost as they shop under a new rule finalized by the federal government on Wednesday.

The Department of Transportation published a new rule requiring airlines and travel agencies to disclose in advance any fees for additional travel-critical services, such as a first or second checked bag, canceling a flight or changing a reservation. Through this rule, customers will save more than $500 million per year by avoiding surprise charges on tickets that initially appear cheaper than others, the agency said.

“Airlines should compete with each other to secure passenger business, not to see who can charge the most surprise fees,” US Transportation Secretary Pete Buttigieg said in a press release.

Current regulations require that the entire fee, including mandatory charges, be disclosed in advance. The department is still determining the full scope of services and will take into account public comments on the matter, he said.

The new rule will reduce what the department says is a growing source of revenue for airlines, which will increase by 30% between 2018 and 2022.

The rule is the latest in President Joe Biden's crusade against so-called “junk rates,” which are unexpected for customers and considered excessive compared to costs. It was announced alongside a rule that would require airlines to automatically reimburse travelers in cash when their flight is delayed or their bags are lost.

The disclosure rule will come into force in phases, ranging from six months to two years.

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