Proposed Rule2022-22214
Enhancing Transparency of Airline Ancillary Service Fees
Primary source
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Published
October 20, 2022
Issuing agencies
Transportation Department
Abstract
The Department proposes to require U.S. air carriers, foreign air carriers, and ticket agents to clearly disclose passenger-specific or itinerary-specific baggage fees, change fees, and cancellation fees to consumers whenever fare and schedule information is provided to consumers for flights to, within, and from the United States. The Department also proposes to require these entities to clearly disclose passenger-specific or itinerary-specific fees for adjacent seating whenever fare and schedule information is provided to consumers traveling with young children on flights to, within, and from the United States, and make these fees transactable. The Department further proposes to require that carriers provide useable, current, and accurate information regarding baggage fees, change fees, cancellation fees, and adjacent seating fees if any to ticket agents that sell or display the carrier's fare and schedule information. This rulemaking implements the Executive order on Promoting Competition in the American Economy, which directs the Department to take various actions to promote the interests of American workers, businesses, and consumers, including considering initiating a rulemaking to ensure that consumers have ancillary fee information at the time of ticket purchase.
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<title>Federal Register, Volume 87 Issue 202 (Thursday, October 20, 2022)</title>
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[Federal Register Volume 87, Number 202 (Thursday, October 20, 2022)]
[Proposed Rules]
[Pages 63718-63738]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-22214]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
14 CFR Part 399
[Docket No. DOT-OST-2022-0109]
RIN 2105-AF10
Enhancing Transparency of Airline Ancillary Service Fees
AGENCY: Office of the Secretary (OST), Department of Transportation
(DOT).
ACTION: Notice of proposed rulemaking (NPRM).
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SUMMARY: The Department proposes to require U.S. air carriers, foreign
air carriers, and ticket agents to clearly disclose passenger-specific
or itinerary-specific baggage fees, change fees, and cancellation fees
to consumers whenever fare and schedule information is provided to
consumers for flights to, within, and from the United States. The
Department also proposes to require these entities to clearly disclose
passenger-specific or itinerary-specific fees for adjacent seating
whenever fare and schedule information is provided to consumers
traveling with young children on flights to, within, and from the
United States, and make these fees transactable. The Department further
proposes to require that carriers provide useable, current, and
accurate information regarding baggage fees, change fees, cancellation
fees, and adjacent seating fees if any to ticket agents that sell or
display the carrier's fare and schedule information. This rulemaking
implements the Executive order on Promoting Competition in the American
Economy, which directs the Department to take various actions to
promote the interests of American workers, businesses, and consumers,
including considering initiating a rulemaking to ensure that consumers
have ancillary fee information at the time of ticket purchase.
DATES: Comments should be filed by December 19, 2022. Late-filed
comments will be considered to the extent practicable. Petitions for a
hearing pursuant to 14 CFR 399.75(b)(1) must also be filed by December
19, 2022.
ADDRESSES: You may file comments identified by the docket number DOT-
OST-2022-0109 by any of the following methods:
<bullet> Federal eRulemaking Portal: go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> and follow the online instructions for submitting
comments.
<bullet> Mail: Docket Management Facility, U.S. Department of
Transportation, 1200 New Jersey Ave. SE, West Building Ground Floor,
Room W12-140, Washington, DC 20590-0001.
<bullet> Hand Delivery or Courier: West Building Ground Floor, Room
W12-140, 1200 New Jersey Ave. SE, between 9 a.m. and 5 p.m. ET, Monday
through Friday, except Federal holidays. Commenters using this method
of delivery should contact Docket Services at 202-366-9826 or 202-366-
9317 before delivery to ensure staff is available to receive the
delivery.
<bullet> Fax: (202) 493-2251.
Instructions: You must include the agency name and docket number
DOT-OST-2022-0109 or the Regulation Identifier Number (RIN) for the
rulemaking at the beginning of your comment. All comments received will
be posted without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any
personal information provided.
Privacy Act: Anyone can search the electronic form of all comments
received in any of our dockets by the name of the individual submitting
the comment (or signing the comment, if submitted on behalf of an
association,
[[Page 63719]]
business, labor union, etc.). For information on DOT's compliance with
the Privacy Act, please visit <a href="https://www.transportation.gov/privacy">https://www.transportation.gov/privacy</a>.
Docket: For access to the docket to read background documents and
comments received, go to <a href="https://www.regulations.gov">https://www.regulations.gov</a> or to the street
address listed above. Follow the online instructions for accessing the
docket.
FOR FURTHER INFORMATION CONTACT: Ryan Patanaphan, Senior Trial Attorney
or Blane A. Workie, Assistant General Counsel, Office of Aviation
Consumer Protection, U.S. Department of Transportation, 1200 New Jersey
Ave. SE, Washington, DC 20590, 202-366-9342, 202-366-7152 (fax),
<a href="/cdn-cgi/l/email-protection#24565d454a0a544550454a45544c454a64404b500a434b52"><span class="__cf_email__" data-cfemail="017378606f2f716075606f607169606f41656e752f666e77">[email protected]</span></a> or <a href="/cdn-cgi/l/email-protection#4b29272a252e653c243920222e0b2f243f652c243d"><span class="__cf_email__" data-cfemail="51333d303f347f263e233a383411353e257f363e27">[email protected]</span></a> (email).
SUPPLEMENTARY INFORMATION:
A. Background
In 2014, the Department issued a notice of proposed rulemaking
(NPRM) titled ``Transparency of Airline Ancillary Service Fees and
Other Consumer Protection Issues.'' 79 FR 29970 (May 23, 2014). In the
2014 NPRM, the Department proposed to enhance consumer protections
through various means, including the disclosure of certain airline
ancillary service fees. In 2017, noting the significant comments
received regarding the proposal on ancillary service fees in the 2014
NPRM, the Department issued a supplemental notice of proposed
rulemaking (SNPRM) titled ``Transparency of Airline Ancillary Service
Fees.'' 82 FR 7536 (Jan. 19, 2017).
In the 2017 SNPRM, the Department proposed to require fees for a
first and second checked bag and a carry-on bag be disclosed at all
points of sale wherever fare and schedule information is provided to
consumers. The Department further proposed that carriers \1\ distribute
useable, current, and accurate fee information to ticket agents that
receive and distribute the carrier's fare and schedule information,
including Global Distribution Systems (GDS). The Department also
proposed that the information provided by carriers be detailed enough
to allow ticket agents to disclose fees as itinerary-specific or
customer-specific (i.e., fees that are differentiated based on factors
specific to the passenger or proposed itinerary) charges. However, the
SNPRM did not propose to require that consumers be able to purchase
these ancillary services through ticket agents (i.e., did not propose
transactability).
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\1\ The Department uses the term ``carrier'' or ``airline'' to
refer to air carriers and foreign air carriers, as such terms are
defined in 49 U.S.C. 40102(a)(2) and (a)(21).
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The Department withdrew the SNPRM on December 14, 2017. In the
notice of withdrawal of proposed rulemaking, 82 FR 58778 (Dec. 14,
2017), the Department stated that its existing requirements provide
consumers information regarding fees for ancillary services and noted
that the withdrawal was consistent with Executive Order (E.O.) 13771,
``Reducing Regulation and Controlling Regulatory Costs,'' which has
since been revoked.\2\
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\2\ President Biden issued E.O. 13992, ``Revocation of Certain
Executive Orders Concerning Federal Regulation,'' on January 20,
2021, which revoked E.O. 13771 and certain other Executive orders.
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On July 9, 2021, the President issued E.O. 14036, ``Promoting
Competition in the American Economy,'' which launched a whole-of-
government approach to strengthen competition. E.O. 14036 includes 72
initiatives by more than a dozen Federal agencies to promptly tackle
some of the most pressing competition problems across our economy. It
directed the Department to take various actions to foster competition
and promote the interests of American workers, businesses, and
consumers. Specifically, section 5, paragraph(m)(i)(F) of E.O. 14036
states that ``[t]he Secretary of Transportation shall: . . . not later
than 90 days after the date of this order, consider initiating a
rulemaking to ensure that consumers have ancillary fee information,
including ``baggage fees,'' ``change fees,'' and ``cancellation fees,''
at the time of ticket purchase.'' This rulemaking implements section 5,
paragraph(m)(i)(F) of E.O. 14036.\3\
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\3\ This rulemaking also addresses section 5, paragraph
(m)(i)(B) of E.O.14036. That section directed the Department to
promote enhanced transparency and consumer safeguards, as
appropriate and consistent with applicable law, including through
potential rulemaking, enforcement actions, or guidance documents,
with the aims of enhancing consumer access to airline flight
information so that consumers can more easily find a broader set of
available flights, including by new or lesser known airlines; and
ensuring that consumers are not exposed or subject to advertising,
marketing, pricing, and charging of ancillary fees that may
constitute an unfair or deceptive practice or an unfair method of
competition.
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B. Need for a Rulemaking
The Department regularly receives input from stakeholder groups,
including airlines and consumer advocacy groups, regarding air
transportation-related concerns. Consumer advocates have consistently
stated to the Department that there is a market failure in air
transportation pricing because consumers are unable to determine the
true cost of air travel prior to ticket purchase. They have also raised
concerns about the lack of competition in the industry. The
Department's full fare rule in 14 CFR 399.84 is designed to ensure the
price stated is the entire price required to be paid by the consumer
for air transportation. In the context of the full fare rule, air
transportation is the transport of the passenger on an aircraft from
one location to another location and includes all charges the passenger
must pay for this service. The existing regulation does not require
that the full fare quoted include the many kinds of ancillary fees
consumers may pay for optional services. Consumer advocates have
asserted that a lack of passenger specific information regarding fees
for ancillary services at the time of ticket purchase is causing a
market failure by limiting the ability of consumers to understand the
true cost of the travel that they are looking to purchase and to
compare pricing between carriers and travel options. Many services or
products traditionally included in the price of an airline ticket such
as checked baggage and meals are now sold separately. Ancillary service
means any optional service related to air travel provided by a carrier,
for a fee, beyond passenger air transportation. Such service includes,
but is not limited to, checked or carry-on baggage, ticket change and
cancellation, advance seat selection, access to in-flight entertainment
program, and in-flight beverages, snacks, or meals.
Certain members of Congress and State governments representing
constituents have expressed support for full, more specific, disclosure
of ancillary service fees. Certain members of Congress have also
sponsored legislation on this topic.\4\ Further, the
[[Page 63720]]
Joint Explanatory Statement of the 2018 Consolidated Appropriations Act
requested that the Department work in collaboration with industry,
consumers and other stakeholders to establish guidelines on
transparency of airline ancillary fees.\5\ Subsequently, the Department
tasked the Aviation Consumer Protection Advisory Committee (ACPAC) with
examining this issue.\6\ The ACPAC heard from several consumer advocacy
groups, including Travelers United, the National Consumers League, and
the Global Business Travel Association regarding this issue. Consumer
organizations that presented to the ACPAC stressed the importance of
ensuring consumers can accurately and easily compare travel costs,
inclusive of ancillary fees, and they recommended that ancillary fee
information should be clearly displayed early in consumer purchase
decisions.\7\ The 2020 ACPAC recommended that the Department should
remain vigilant to ensure compliance with the transparency requirements
that currently exist.\8\ Prior DOT advisory committees have also
addressed the issue of ancillary service fee transparency. In 2010, the
Future of Aviation Advisory Committee advised generally that DOT
``should ensure transparency in air carrier pricing, including
ancillary fees.'' \9\ In 2012, the Advisory Committee on Aviation
Consumer Protection adopted this recommendation and added that all
participants in the airfare and fee distribution system should be
guided by principles of transparency, providing choices and offers that
meet consumer needs, and knowing the full price before purchase.\10\
Then in 2015, the Advisory Committee on Aviation Consumer Protection
recommended that DOT require change/cancellation fees be clear and
displayed before ticket purchase.\11\ Consumer advocates had asserted
that such fees had become significant and difficult to ascertain.\12\
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\4\ See, e.g., Letter from Representative Nita M. Lowey to
Secretary Elaine Chao (Dec. 8, 2017) and Letter from Pennsylvania
Attorney General Josh Shapiro and attorneys general from 15 other
states and the District of Columbia to Secretary Elaine L. Chao
(Dec. 20, 2017). See also section 203 of S. 3222, Airline
Passengers' Bill of Rights (introduced by Senators Blumenthal,
Markey, Whitehouse, Wyden, and Casey on November 17, 2021) at
<a href="https://www.congress.gov/bill/117th-congress/senate-bill/3222/text?r=7&s=1">https://www.congress.gov/bill/117th-congress/senate-bill/3222/text?r=7&s=1</a>, proposing to mandate that DOT require airlines, online
travel agencies (OTAs), metasearch engines and other ticket agents
that provide flight search tools disclose all applicable taxes and
ancillary fees at any point in which the fare is shown and in
telephone communication with a prospective consumer in the U.S. at
any point in which the cost of the air transportation is disclosed.
See also The Unfriendly Skies: Consumer Confusion Over Airline Fees,
Staff Report of Minority Staff of Senate Commerce Committee (August
6, 2015) at <a href="https://www.blumenthal.senate.gov/imo/media/doc/8%206%2015%20FINAL%20Airline%20Report.pdf">https://www.blumenthal.senate.gov/imo/media/doc/8%206%2015%20FINAL%20Airline%20Report.pdf</a>, finding that ancillary
fees, such as change and cancellation penalties, are increasingly
less transparent regarding the true cost of air travel and
recommending more transparency from the airline industry.
\5\ <a href="https://www.congress.gov/congressional-record/2018/03/22/house-section/article/H2697-1">https://www.congress.gov/congressional-record/2018/03/22/house-section/article/H2697-1</a> at page H2872.
\6\ See <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-
0001.
\7\ See Summary of April 4, 2019 ACPAC Meeting 10-16, available
at <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-0019; see
also Summary of September 24, 2020 ACPAC Meeting 19-20, available at
<a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-0025.
\8\ Report of the Aviation Consumer Protection Advisory
Committee 5 (Dec. 31, 2020), available at <a href="https://www.transportation.gov/individuals/aviation-consumer-protection/acpac-report-secretary-transportation-december-31-2020">https://www.transportation.gov/individuals/aviation-consumer-protection/acpac-report-secretary-transportation-december-31-2020</a>.
\9\ The Future of Aviation Advisory Committee, Final Report 36
(Apr. 11, 2011), available at <a href="https://www.transportation.gov/highlights/future-aviation-advisory-committee/faac-final-report">https://www.transportation.gov/highlights/future-aviation-advisory-committee/faac-final-report</a>.
\10\ Report of the Advisory Committee on Aviation Consumer
Protection 7-8 (Oct. 22, 2012), available at <a href="https://www.transportation.gov/airconsumer/ACACP/1st-ACACP-Report-22OCT2012">https://www.transportation.gov/airconsumer/ACACP/1st-ACACP-Report-22OCT2012</a>.
\11\ Record of Meeting, Ninth Meeting of the Advisory Committee
on Aviation Consumer Protection 3 (Sept. 1, 2015), available at
<a href="https://www.transportation.gov/airconsumer/ACACP/9th-meeting-Sept-1/record">https://www.transportation.gov/airconsumer/ACACP/9th-meeting-Sept-1/record</a>.
\12\ See Record of Meeting, Eighth Meeting of the Advisory
Committee on Aviation Consumer Protection 3-5 (June 23, 2015),
available at <a href="https://www.transportation.gov/sites/dot.gov/files/docs/resources/individuals/aviation-consumer-protection/285976/acacp-record-8th-meeting-23june2015.pdf">https://www.transportation.gov/sites/dot.gov/files/docs/resources/individuals/aviation-consumer-protection/285976/acacp-record-8th-meeting-23june2015.pdf</a>; see also Record of Meeting,
Ninth Meeting of the Advisory Committee on Aviation Consumer
Protection (Sept. 1, 2015).
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Most recently, in June 2022, the ACPAC again addressed the issue of
transparency of airline ancillary service fees.\13\ During the meeting,
DOT solicited comment on the key topics of this NPRM (namely, which
ancillary service fees are critical for consumers, airlines sharing
data regarding critical ancillary service fees with ticket agents, and
how to best display this information to consumers). DOT also solicited
comment on whether fees for certain ancillary services should be
disclosed at the first point in a search process where a fare is
listed.
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\13\ See <a href="https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting">https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting</a>. A webcast of the meeting is available to view on
the ACPAC website. Speakers' materials have been posted to the ACPAC
docket at <a href="http://www.regulations.gov">www.regulations.gov</a>; docket DOT-OST-2018-0190. On the
second day of the meeting, the ACPAC addressed the separate but
related issue of availability of airline flight information.
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Consumer advocates expressed the view that because most passengers
travel once per year or less, they may not be aware of certain
ancillary service fees, such as those related to seat selection.\14\
Advocates also argued that the practice of ``drip pricing,'' in which
sellers advertise a portion of the full price and then reveal
additional charges over time tends to lock consumers into engaging with
a given seller, and reduces competition, because the customer has
invested time and energy into the purchasing process and thus is less
likely to abandon the purchase entirely and re-institute a fuller
search for options.\15\
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\14\ Presentation of FlyersRights, available at <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-0046.
\15\ Id.; see also Presentation of American Antitrust Institute,
available at <a href="https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting/webcast">https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting/webcast</a> (Day 1 morning session), and Federal Trade
Commission, ECONOMIC ANALYSIS OF HOTEL RESORT FEES, (Jan. 2017),
available at <a href="https://www.ftc.gov/system/files/documents/reports/economic-analysis-hotel-resort-fees/p115503_hotel_resort_fees_economic_issues_paper.pdf">https://www.ftc.gov/system/files/documents/reports/economic-analysis-hotel-resort-fees/p115503_hotel_resort_fees_economic_issues_paper.pdf</a>.
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This NPRM builds on the Department's final rule in 2011 regarding
the disclosure of ancillary service fees by carriers and ticket agents.
76 FR 23110 (April 25, 2011). The 2011 final rule requires carriers to
list on their website all ancillary service fees on a page that is
directly linked from their main websites. The Department allows
carriers to display the fees for ancillary services in a range, except
for baggage information. For baggage, the Department requires that
carriers provide specific baggage fee information to enable the
consumer to determine the cost of the baggage. In addition, carriers
and ticket agents are required to disclose, upon displaying the result
of an itinerary search, that baggage fees may apply and refer the
consumer to the location on the airlines' or ticket agents' website
where the consumer can review baggage fee information to determine the
fees that would apply to him or her. While the Department considers the
disclosure requirements in its 2011 final rule to be a step in the
right direction, based on feedback from consumer advocacy groups and
others since publication of the 2011 final rule, DOT has determined
that these requirements were insufficient and did not fully provide
transparency of ancillary services and products.
Since the issuance of the 2011 final rule, consumer advocacy
organizations have regularly reported to the Department that consumers
often find the process of determining the baggage fees that apply to
them to be a complicated and time-consuming process. In 2019, during a
meeting of the Aviation Consumer Protection Advisory Committee, two
consumer organizations underscored the difficulties faced by consumers
in determining the total cost of air travel.\16\ Consumer advocates
maintain that consumers are confused by the complex charts that
carriers and ticket agents provide to consumers to determine their
baggage fees. In September 2017, the Government Accountability Office
(GAO) noted that consumer group representatives stated that it has
become ``increasingly difficult for consumers to compare airfare ticket
prices, fees, and associated rules, and understand what is included in
their purchases.'' \17\ In December 2017, after the Department withdrew
its January 2017 SNPRM on transparency of airline ancillary fees, a
coalition of 16
[[Page 63721]]
States' attorney generals urged the Department to reverse its decision,
stating that they ``regularly hear reports from consumers in [their]
states who are confused and frustrated by these fees, which
significantly alter the total cost of travel.'' \18\ The Department
also receives consumer complaints that reflect the confusion consumers
experience regarding fees for baggage. Further, consumer advocates
contend that the ancillary services and fees that airlines post on
their websites are not useful to consumers to determine the cost of
travel because airlines generally provide a range of fees for ancillary
services aside from baggage. Airlines acknowledge that the fees for
ancillary services often vary based on various factors such as the type
of aircraft used, the flight on which a passenger is booked, or the
time at which a passenger pays for the service or product. The
requirements to provide specific baggage fee information and a range of
fees for other ancillary services have not been as helpful to consumers
in determining the true cost of travel as the Department had
anticipated when issuing its final rule in 2011.
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\16\ See Summary of April 4, 2019 ACPAC Meeting 11-13, available
at <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-0019.
\17\ GAO 17-756, Commercial Aviation: Information on Airline
Fees for Optional Services (September 2017), p. 33 at <a href="https://www.gao.gov/assets/gao-17-756.pdf">https://www.gao.gov/assets/gao-17-756.pdf</a>.
\18\ Letter from Pennsylvania Attorney General Josh Shapiro and
attorneys general from 15 other states and the District of Columbia
to Secretary Elaine L. Chao (Dec. 20, 2017).
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The Department receives hundreds of consumer complaints each year
regarding change fees, cancellation fees,\19\ and seating fees.\20\ The
complaints regarding seating fees have included complaints from
consumers who state that they were not provided seats next to their
young child on a flight. Congress instructed the Department to review
airline seating policies and consider establishing a policy directing
airlines to have policies to enable children who are 13 years of age or
younger to sit with a family member over the age of 13 at no additional
cost.\21\ In July 2022, the Department issued a ``Notice Encouraging
U.S. Airlines to Have Policies That Enable Children to Be Seated
Adjacent to an Accompanying Adult to the Maximum Extent Practicable and
at No Additional Cost.'' \22\ In the notice, the Department provides
that airlines should do everything that they can to ensure the ability
of parents to sit next to their young children, including allowing
every young child to sit next to a parent without charging fees for
adjacent seating. It is also worth noting that consumer comments in the
2014 NPRM strongly supported Department action on disclosure of
ancillary service fees.\23\
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\19\ The Department's Office of Aviation Consumer Protection
(OACP) received over 550 complaints regarding change and
cancellation fees in 2021. The Department has not determined what
share of these complaints are from individuals who were unaware of
the fees or unable to find information on the fees and what share
was from individuals who generally did not like having to pay a fee.
\20\ OACP received over 140 complaints regarding seat fees in
2021. The Department has not determined what share of these
complaints are from individuals who were unaware of the fees or
unable to find information on the fees and what share was from
individuals who generally did not like having to pay a fee.
\21\ See 49 U.S.C. 42301 note prec. (Section 2309 of the FAA
Extension, Safety, and Security Act of 2016, Public Law 114-190
(July 15, 2016)).
\22\ See <a href="https://www.transportation.gov/individuals/aviation-consumer-protection/family-seating/June-2022-notice">https://www.transportation.gov/individuals/aviation-consumer-protection/family-seating/June-2022-notice</a>.
\23\ See comments submitted in the 79 FR 29970 (May 23, 2014).
The docket for the 2014 NPRM, which can be accessed at <a href="https://www.regulations.gov/search?filter=DOT-OST-2014-0056">https://www.regulations.gov/search?filter=DOT-OST-2014-0056</a>. See also 82 FR
7536, 7537 (Jan. 19, 2017) describing comments received in 2014 NPRM
as ``Over 450 consumers clearly supported additional requirements
relating to disclosure of ancillary service fees while fewer than
ten commented in opposition to additional disclosure requirements.''
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Based on a review of consumer complaints, comments received in the
2014 NPRM, feedback received from consumer advocacy organizations, and
the work of various advisory committees, the Department believes that
many consumers continue to be unsatisfied with the level of disclosures
they receive regarding ancillary service fees. The Department believes,
based on a review of consumer complaints and discussions at past
advisory committee meetings, that the current disclosure requirements
are not sufficient. It is difficult for consumers to determine the best
and most cost-effective flights when fee information for essential
services such as ticket changes or cancellations, family seating, or
baggage is not readily available. There is a need for a rulemaking on
transparency of airline ancillary fees to address difficulties that
consumers have in finding ancillary service fee information, which
limits consumers' ability to determine the true cost of travel and to
adequately compare airline pricing. In issuing this rulemaking, the
Department intends to protect consumers from hidden and deceptive fees
and enable them to determine the true cost of travel in an effective
and efficient manner when they price shop for air transportation.
C. Statutory Authority
The Department is issuing this rulemaking pursuant to its statutory
authority in 49 U.S.C. 41712 to prohibit unfair and deceptive practices
in air transportation and the sale of air transportation. A practice is
``unfair'' to consumers if it causes or is likely to cause substantial
injury, which is not reasonably avoidable, and the harm is not
outweighed by benefits to consumers or competition.\24\ A practice is
``deceptive'' to consumers if it is likely to mislead a consumer,
acting reasonably under the circumstances, with respect to a material
matter. A matter is material if it is likely to have affected the
consumer's conduct or decision with respect to a product or
service.\25\ Proof of intent is not necessary to establish unfairness
or deception.\26\ The elements of unfair and deceptive is further
elaborated by the Department is its guidance document.\27\
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\24\ 14 CFR 399.79(b)(1).
\25\ 14 CFR 399.79(b)(2).
\26\ 14 CFR 399.79(c).
\27\ 87 FR 52677 (August 28, 2022).
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Pursuant to its authority under section 41712, the Department
proposes to require that airlines and ticket agents disclose bag fees
for a first and second checked bag and a carry-on bag, family seating
fees for a young child traveling with an adult, as well as change and
cancellation fees and policies whenever fare and schedule information
is provided to a consumer in response to a passenger-specific or
anonymous itinerary search on a website marketed to U.S. consumers
where air transportation is advertised or sold. This includes, but is
not limited to, the first place a fare is stated in search results. The
Department's tentative basis for concluding that the practices this
NPRM would prohibit are unfair and deceptive is articulated in the
paragraphs that follow.
Bag Fees
The Department tentatively considers not displaying bag fees, which
have historically been included in the airfare (i.e., fee for first and
second checked bag and carry-on bag) but are now often broken out from
the airfare, in a passenger-specific manner whenever fare and schedule
information is provided to be an unfair practice because it causes or
is likely to cause substantial injury, which is not reasonably
avoidable, and the harm is not outweighed by benefits to consumers or
competition.
The substantial injury this practice is likely to cause is the
additional time spent searching to find the total cost of travel and
any additional funds spent on air transportation that might have been
avoided if the consumer had been able to determine the true cost of
travel up front and readily select the best price. This harm is not
reasonably avoidable even with the disclosures mandated in the 2011
final rule that improved consumer access to first and second checked
bag and carry-on bag fee
[[Page 63722]]
information by requiring those fees to be displayed on airlines' and
ticket agents' websites. Airlines and ticket agents continue to
disclose bag fees in a static format in complex charts that are
confusing to consumers and that are not readily available at the moment
consumers need the information to comparison shop. Further, in
connection with complex itineraries, interline tickets, and even some
code-share flights, consumers are still reporting confusion regarding
the total cost of baggage fees. The harm that consumers experience is
not outweighed by benefits to consumers or competition because consumer
confusion about applicable bag fees harms, rather than benefits,
competition. The Department believes that the disclosure of passenger-
specific fees whenever fare and schedule information is provided would
promote informed buyers, enhance competition, and lower prices.
The practice of not displaying passenger-specific fees for first
and second checked bags and carry-on bags when fare and schedule
information is provided is also deceptive in that it misleads consumers
into believing the total purchase price from one carrier or ticket
agent is cheaper than that of another when that may not be the case.
This belief is reasonable as carriers and agents often display only the
air fare and not these bag fees during an itinerary search. As carriers
have different policies regarding the fees and limitations imposed to
transport baggage, and because variation within each carrier depends on
the fare category purchased or the status of the passenger, the current
requirement that carriers and ticket agents provide a generic notice
that ``fees for baggage may apply'' during the booking process is not
providing consumers sufficient notice of the total cost of the air
transportation. In addition, although carriers and ticket agents are
required to inform consumers during the booking process about where
consumers can see baggage fees, consumers are often diverted to complex
charts that are confusing, prolong the consumer's process of evaluating
itineraries and fares for purchase, and may ultimately not be
instructive for many consumers in determining the bag fee that would
apply to them. The cost of the first and second checked bag and carry-
on bag is often material to consumers, as knowing such costs in
conjunction with the ticket price is likely to affect the consumer's
purchase decisions. According to the GAO, since airlines first imposed
checked baggage fees, the number of checked bags per passenger has
declined. GAO also explains that checked baggage fees have led to
greater amounts of carry-on baggage.\28\
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\28\ GAO 10-785, Commercial Aviation: Consumers Could Benefit
from Better Information about Airline-Imposed Fees and Refundability
of Government-Imposed Taxes and Fees (July 14, 2010) at <a href="https://www.gao.gov/assets/gao-10-785.pdf">https://www.gao.gov/assets/gao-10-785.pdf</a>.
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Change and Cancellation Fees and Policies
The Department tentatively considers the practice of not clearly
disclosing passenger-specific change and cancellation fees and policies
during the ticket purchase process to be an unfair practice because it
causes or is likely to cause substantial injury, which is not
reasonably avoidable, and the harm is not outweighed by benefits to
consumers or competition.
The Department currently requires the disclosure of these fees on
or with the ticket.\29\ However, this requirement means that consumers
often receive information about these fees after the purchase of the
ticket is already made (i.e., upon receipt of the ticket confirmation),
which is not sufficient disclosure. The practice of not disclosing
these fees early in the process and prior to ticket purchases causes
substantial injury to consumers in that passengers may purchase tickets
without adequate notice that they could incur significant fees to
change or cancel their tickets, that they are not entitled to a refund
in the original form of payment if they do cancel, or that there are
other restrictions on their ability to change or cancel their tickets.
These harms are not reasonably avoidable if the carrier or ticket agent
does not provide disclosures on their cancellation or change policies
during booking. Carriers may have separate web pages that contain such
policy and fee information, but this information may be in a range, so
consumers may not know the specific change or cancellation fee that
would apply to them. Moreover, even if not in a range, change and
cancellation policies and fees may not be simple to understand, as fare
categories, passenger status, ticket type (e.g., award ticket
purchases), and other factors may impact the applicable change and
cancellation fees and policies. Further, because the cancellation and
change fee information is not provided during the booking process,
consumers would need to interrupt their booking process to search for
the information and extend the time needed to complete a booking. The
harm that consumers experience is not outweighed by benefits to
consumers or competition because, like baggage fees, consumer surprise
or confusion about applicable change and cancellation fees after
airfare purchase harms, rather than benefits, competition. The
Department believes that the disclosure of passenger-specific or non-
passenger-specific change and cancellation fees whenever fare and
schedule information is provided would promote informed buyers, enhance
competition, and lower prices.
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\29\ See 14 CFR 253.7.
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The Department also tentatively considers the practice of not
displaying change and cancellation fees when fare and schedule
information is provided to be deceptive. Without proper notice,
consumers acting reasonably would be misled with respect to the change
and cancellation policies that apply to their ticket and may believe
that change or cancellations are possible at no fee or at a reduced
fee. The Department has received complaints from consumers expressing
surprise at the high level of the fees that have been imposed, in some
cases, cancellation or change fees are higher than the fare paid by the
consumer. Comments in a prior DOT rulemaking on ancillary fees also
support the importance of disclosure of change and cancellation fees to
consumers.\30\ The change and cancellation fees are therefore material
because they could affect the consumer's decision on whether to
purchase an airline ticket and if so, which airline to select. As such,
the Department is of the tentative view that not displaying change and
cancellation fees when fare and schedule information is provided is
deceptive.
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\30\ See comments submitted in the docket for the 2014 NPRM,
which can be accessed at <a href="https://www.regulations.gov/search?filter=DOT-OST-2014-0056">https://www.regulations.gov/search?filter=DOT-OST-2014-0056</a>.
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Family Seating Policies and Fees
For similar reasons, the Department tentatively considers the lack
of fee disclosure for adjacent seating when fare and schedule
information is provided and restrictions on purchasing those seats at
all point of sale to be an unfair practice for those traveling with a
young child. This lack of disclosure and transactability of family
seating information causes or is likely to cause substantial injury,
which is not reasonably avoidable, and the harm is not outweighed by
benefits to consumers or competition.
The practice causes substantial harm to consumers in that
passengers may face situations in which they are unexpectedly separated
from their children on flights or must pay
[[Page 63723]]
unexpected fees to remain with their children. Also, despite
information about carrier family seating policies being available on
airlines' websites, the harm is not reasonably avoidable because a
reasonable consumer would not believe that it is necessary to pay fees
to be seated next to his or her young child and would not know to
search for this information on an airline's website before purchasing
the ticket. Even if the family seating fee is disclosed when fare and
schedule information is provided that alone would not be sufficient.
Transactability is necessary because consumers are not able to save the
seat or lock in the price for adjacent seating at the time of ticket
purchase.
The number of family seating complaints that the Department
receives against airlines is low \31\ but these consumers note being
confused about the seating policies and fees that apply to them and the
harm that they face is significant. A substantial harm may be
demonstrated by a large amount of harm to a small number of people.\32\
The likelihood of consumers being unexpectedly separated from their
children on flight may increase when consumers purchase their tickets
from a ticket agent without realizing that the fare category (e.g.,
basic economy) or the method of booking (e.g., the ticket agent
arranged for separate bookings for each family member) selected did not
adequately enable them to ensure adjacent seats. The need to consult a
separate web page during the booking process also presents the
potential for increased confusion and a prolonging of the ticket
purchase process. The Department looks at this element from the
perspective of an ordinary consumer acting reasonably under the
totality of the circumstances. Further, DOT concludes that the harm is
not outweighed by benefits to consumers or competition. The Department
believes that the disclosure of the family seating fees when fare and
schedule information is provided and the ability to purchase those
seats at all points of sale would promote informed buyers, enhance
competition, and lower prices.
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\31\ In calendar year 2017, .38% of complaints (44 complaints)
filed with the Department by consumers against U.S. airlines
concerned family seating. In calendar year 2018, .51% of air travel
service complaints (46 complaints) against U.S. airlines concerned
family seating. In calendar year 2019, 2.4% of air travel service
complaints (230 family seating complaints) against U.S. airlines
concerned family seating. This increase corresponded with the
efforts of a consumer advocacy group to encourage air travelers to
file complaints with the Department if they were dissatisfied with
an experience related to family seating. Fewer than .5% of the air
travel service complaints against U.S. airlines filed with the
Department in calendar years 2020 and 2021 concerned family
seating--.46% of complaints (165 family seating complaints) in
calendar year 2020 and .46% of complaints (94 family seating
complaints) in calendar year 2021.
\32\ The Federal Trade Commission (FTC) previously noted that
``it is well established that substantial injury may be demonstrated
by a showing of a small amount of harm to a large number of people,
as well as a large amount of harm to a small number of people.'' See
Opinion of the Commission, In the Matter of LabMD, Inc. (July 19,
2016) at 9 available at <a href="https://www.ftc.gov/system/files/documents/cases/160729labmd-opinion.pdf">https://www.ftc.gov/system/files/documents/cases/160729labmd-opinion.pdf</a> (``LabMD''). The Department's
statutory authority to prohibit unfair practices was modeled on
section 5 of the FTC Act.
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The Department also tentatively considers failing to disclose
potential family seating fees when fare and schedule information is
provided to be a deceptive practice.\33\ The lack of such fee
information is likely to mislead consumers into believing that families
will be able to be seated next to their children free of charge. It
would also be a deceptive practice to disclose the family seating fees
but then not allow consumers to purchase those adjacent seats at all
points of sale. The inability to purchase those seats immediately could
mislead consumers as prices for seats are often dynamic and change
based on availability and time of purchase. As evidenced by the
consumer complaints the Department has received on this issue, the
Department concludes that consumers have a reasonable belief that young
children will be allocated a seat near a parent or guardian traveling
with the child, and that the cost of ensuring adjacent seats with a
child is material to consumers.
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\33\ ``Some cases involve omission of material information, the
disclosure of which is necessary to prevent the claim, practice, or
sale from being misleading.'' See FTC 1983 Policy Statement on
Deception, available at <a href="https://www.ftc.gov/system/files/documents/public_statements/410531/831014deceptionstmt.pdf">https://www.ftc.gov/system/files/documents/public_statements/410531/831014deceptionstmt.pdf</a>.
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49 U.S.C. 40101(a)(4)
In carrying out aviation economic programs, including issuing this
rulemaking under 49 U.S.C. 41712, the Department considers the factors
identified in 49 U.S.C. 40101 as being in the public interest and
consistent with public convenience and necessity. Under 49 U.S.C.
40101(a)(4), the Department is required to consider the availability of
a variety of adequate, economic, efficient, and low-priced services
without unreasonable discrimination or unfair or deceptive practices as
being in the public interest. The Department is also required by
section 40101(a)(12) to consider as being in the public interest
encouraging, developing, and maintaining an air transportation system
relying on actual and potential competition to provide efficiency,
innovation, and low prices. This rulemaking proposes to improve the
transparency of airline pricing through the increased disclosure of bag
fees, change and cancellation fees, and family seating policies during
the ticket purchase process. As carriers vary on their policies for
such fees and such information is often not provided during the
purchase process, consumers of air transportation may have difficulty
comparing the actual and potential costs of accessing the air
transportation between different carriers. By improving this
transparency, this rulemaking would allow for better comparisons of
airline ticket pricing, of which these fees are often a critical
component, thereby encouraging price competition.
D. Unfair or Deceptive Practice Request for a Hearing
For the reasons discussed in the Statutory Authority section, the
Department has tentatively concluded that the practice of not
displaying applicable fees for first and second checked bags and carry-
on bags during the ticket purchase process is both unfair and
deceptive. For the reasons discussed in the Statutory Authority
section, the Department has also tentatively concluded that the lack of
disclosure regarding ticket change and cancellation fees and policies
and family seating information during the ticket purchase process
presents an unfair and deceptive practice.
Pursuant to the Department's regulation at 14 CFR 399.75(b)(1), any
interested party may file a petition to hold a hearing on the proposed
rule prior to the close of the comment period. As stated in the DATES
section, petitions must therefore be received by December 19, 2022.
The Department's regulations 14 CFR 399.75(b)(2) provide that the
Department will grant a petition if the petitioner makes a clear and
convincing showing that granting the petition is in the public
interest. Factors considered in determining whether a petition is in
the public interest include: (1) Whether the proposed rule depends on
conclusions concerning one or more specific scientific, technical,
economic, or other factual issues that are genuinely in dispute or that
may not satisfy the requirements of the Information Quality Act; (2)
whether the ordinary public comment process is unlikely to provide an
adequate examination of the issues to permit a fully informed judgment;
(3) whether the resolution of the disputed factual issues would likely
have a material effect on the costs and benefits of the proposed rule;
(4) whether the requested hearing would advance the
[[Page 63724]]
consideration of the proposed rule and the General Counsel's ability to
make the rulemaking determinations required by Sec. 399.75; and (5)
whether the hearing would unreasonably delay completion of the
rulemaking. DOT must also provide an explanation of the basis for the
decision on a petition. (14 CFR 399.75(b)(3))
Summary of the Proposed Regulatory Provisions
The Department is proposing to increase the protections provided to
consumers as provided in the summary table below.
------------------------------------------------------------------------
Subject Proposal
------------------------------------------------------------------------
Covered entities............. The NPRM applies to: (1) U.S. air
carriers; (2) foreign air carriers; (3)
ticket agents that sell airline tickets,
whether traditional brick-and-mortar
travel agencies, corporate travel
agents, or online travel agencies; and
(4) metasearch sites that do not sell
airline tickets but display airline
flight search options directly to
consumers.
Airline Ancillary Service The ancillary services that the
Fees Critical to Consumer Department has identified as being
Decision. critical to consumers when they choose
among air transportation options are as
follows: first and second checked bag,
one carry-on bag, changing or canceling
a reservation, and adjacent seating when
traveling with a young child.
Disclosure of Baggage Fees... The Department is proposing to require
carriers and ticket agents to disclose
fees for a first and second checked bag
and a carry-on bag during the booking
process when fare and schedule
information is provided (typically first
page of search results).
Disclosure of Change and The Department is proposing to require
Cancellation Fees and carriers and ticket agents to disclose
Policies. change and cancellation fees and
policies to consumers during the booking
process when fare and schedule
information is provided (typically first
page of search results).
Disclosure of Family Seating The Department is proposing to require
Fees and Policies. carriers and ticket agents to disclose
the seat fees applicable for passengers
13 or under to be seated next to an
accompanying adult in the same class of
service during the booking process when
fare and schedule information is
provided (typically first page of search
results).
Timing of Online Disclosures. The Department proposes to require that
first and second checked bag fee, the
carry-on bag fee, the change and
cancellation fee and the family seating
fee be disclosed at the first point in a
search process where a fare is listed in
connection with a specific flight
itinerary.
Passenger-specific The Department is proposing that the fee
information. information disclosed to a consumer for
critical ancillary services be expressed
as passenger-specific information if a
consumer conducts a passenger-specific
itinerary search.
<bullet> A passenger-specific itinerary
search refers to a search that takes
into account a characteristic of the
passenger that may impact ancillary
service fees to be charged (e.g.,
military status, frequent flyer status,
method of payment, etc.)
<bullet> An anonymous itinerary search
refers to a search that does not take
into account passenger characteristics
that may have an impact on ancillary
service fees to be charged.
Web site and Mobile Displays. The Department is proposing to require
that the fees for ancillary services
that are critical to a consumer's
purchasing decision be disclosed to
consumers using airlines' or ticket
agent's websites and mobile web sites.
In-Person or Telephone The Department is proposing to require
Disclosures of Airline that specific fee information for a
Ancillary Service Fees. first and second check bag, one carry-on
item, the canceling or changing of a
reservation, and a passenger 13 or under
to obtain a seat next to an accompanying
adult be provided for each itinerary for
which a fare is quoted to a consumer
during an in-person or telephone
inquiry.
Sharing of Airline Ancillary Airlines would be required to distribute
Service Fee Information with fee information for critical ancillary
Ticket Agents. services to ticket agents that sell or
display the airlines' fare and schedule
information.
The proposal specifies that the
information provided to agents be
usable, accurate and accessible in real-
time.
Prohibition on Fee if Collecting a fee from consumers for
Required Disclosure is Not critical ancillary services without
Provided. disclosure of this fee during the search
process would be deemed an unfair and
deceptive practice.
Transactability.............. The Department is proposing that carriers
and ticket agents enable family seating
fees to be transactable at all points of
sale.
Compliance/Implementation Six-month implementation period to
Period. display a first and second checked bag
fee, a carry-on bag fee, change and
cancellation fee, and family seating fee
(if any), to consumers whenever fare and
schedule information is provided.
------------------------------------------------------------------------
Notice of Proposed Rulemaking
Covered Entities
In this NPRM, the Department proposes to require entities that
advertise or sell air transportation to consumers in the United States
to disclose, prior to ticket purchase, the fees for ancillary services
that are critical to a consumer's purchasing decision. This means that
the proposed requirement would apply to U.S. air carriers; foreign air
carriers; ticket agents that sell airline tickets, whether traditional
brick-and-mortar travel agencies, corporate travel agents, or online
travel agencies (OTA); and metasearch sites that display airline flight
search options directly to consumers. However, Global Distribution
Systems (GDSs) would not be covered by this proposal as GDSs arrange
for air transportation but do not sell or display a carrier's fare to
consumers. The Department solicits comment on whether the covered
entities should be broader or more limited in scope. For example,
regarding ticket agents who sell air transportation, should the
proposed requirement to display information about certain critical
ancillary services exclude corporate travel agents because the display
content is typically negotiated by the business involved?
The airlines and ticket agents that are covered by this rulemaking
do not need to be physically present in the United States. Given the
expansion of e-commerce, in many cases, airlines and ticket agents can
advertise and sell airline tickets to U.S. consumers
[[Page 63725]]
without being physically located in the U.S. This NPRM would apply not
only to airlines or ticket agents that are physically located in the
U.S., but also to those that have a website marketed to consumers in
the United States and display schedule, fare, and availability
information for flights within, to, or from the United States. To
determine whether a website is marketed to U.S. consumers, a variety of
factors would be considered--for example, whether the website is in
English, whether the seller of air transportation displays prices in
U.S. dollars or has an option on its website that differentiates sites
or pages designed for the United States. The Department requests
comment on other factors that may be indicative of the airline or
ticket agent doing business in the United States.
Because ticket agents cannot provide ancillary service fee
information to consumers unless the information is first provided by
carriers to ticket agents, the NPRM proposes to require air carriers
and foreign air carriers to provide the fee information for critical
ancillary services to all ticket agents that sell or display the
carrier's fare and schedule information. While fare, schedule, and
availability information are currently provided by the airlines to the
GDSs, and by GDSs to the agents that display and sell to consumers,
information about the cost of ancillary services is not typically
shared. This NPRM would not require airlines to use GDSs to provide
ancillary fee information to ticket agents that display or sell airline
tickets to consumers although they would be free to do so if they wish.
The Department's focus is on ensuring that information about critical
airline ancillary services reach consumers using the travel agent
channel, regardless of process used, because a significant portion of
airline tickets are purchased indirectly through ticket agents. The
Department seeks comment on whether the Department should require that
carriers provide fee information about critical ancillary services to
GDSs. Why or why not?
Airline Ancillary Service Fees Critical to Consumer Decision
This rulemaking is intended to ensure that fee information about
ancillary services that are critical to a consumer's decision making is
disclosed at all points of sale prior to ticket purchase. The
Department considers the cost of certain ancillary services to be
important to consumers when they choose among air transportation
options. Ancillary service means any service related to air travel
provided by a carrier, for a fee, beyond passenger air transportation
(i.e., the transport of the passenger on an aircraft from one location
to another excluding optional services such as baggage, internet, and
advance seat assignment). Ancillary service fees can include charges
for things that have traditionally been included in the price of a
ticket such as first and second checked bags or meals. It can also
include services that airlines have typically charged separate from the
airline ticket for many years, such as changing or canceling a
reservation.
The ancillary services that the Department has identified as being
critical to consumers when they choose among air transportation options
are as follows: first and second checked bag, one carry-on item,
changing or canceling a reservation, and adjacent seating when
traveling with a young child. The fees that consumer commenters to the
Department's 2014 NPRM most commonly identified as being of critical
importance were baggage, seat assignments and change or cancellation
fees. These are also the top three most common ancillary service
complaints received by the Department. With regard to seat assignments,
although there are fewer complaints about seat assignments for
passengers traveling with small children, the complaints illustrate the
critical importance parents and guardians place on ensuring that their
children are seated next to them. We request comment on whether the
Department's list of critical ancillary services should be expanded or
reduced. Are there particular ancillary service fees (or set of fees)
that have a material impact on the total price paid by the consumer or
are of particular importance to consumers? What are the benefits and
potential challenges to expanding or reducing the Department's list of
critical ancillary services? Comments that are most useful provide
information regarding the reasons why additional disclosures should or
should not be required. The Department also seeks comment on how to
address future adoption by airlines of additional ancillary service
fees and how to ensure their disclosure to the extent that they are of
critical importance to consumers.
Types of Proposed Disclosures
1. First and Second Checked Bag and Carry-On Bag
The Department is proposing to require that carriers and ticket
agents disclose fees for a first and second checked bag and a carry-on
bag on the first page displayed when a consumer conducts a search for
air transportation. This would replace the existing requirement to
provide a generic notice during the booking process about baggage fees
and a link to where the baggage fees can be found on the carrier's
website. The fees would need to be adjusted to accurately reflect the
itinerary of the passenger, the fare category selected, and the fees
applicable to the passenger if the consumer has conducted a passenger-
specific itinerary search. In instances where the carrier or ticket
agent website displays multiple fare categories (e.g., basic economy,
restricted economy, flexible economy, and business class) for the same
itinerary, the NPRM would require the carrier and ticket agent to also
display the bag fees applicable to each fare category. Display of the
baggage fee by links or rollovers is not permitted but we request
comment on whether it should be permitted. The proposed rule would also
clarify that airlines and ticket agents may choose to offer ancillary
service packages or bundles that include bag fees, alongside the
standalone bag fees that would be required to be displayed under this
rulemaking.\34\
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\34\ While the Department recognizes that here is the potential
for confusion when both a standalone fee and a bundled fare are
displayed if the airline or ticket agent does not do an adequate job
of designing its website interface, but we would expect that these
entities would be incentivized to clearly label what is included in
any packaged bundles, and the separate bag fee information would
allow consumers to know whether the package bundle is priced
appropriately to suit their needs (or whether the consumer is better
off purchasing the bag alone).
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The proposal to disclose baggage fees does not apply to air-tour
packages advertised or sold online by ticket agents if the air
transportation component is not finalized and the carrier providing air
transportation is not known at the time of booking. However, ticket
agents in such situations would need to disclose that additional
airline fees for baggage may apply and that those fees may be reduced
or waived based on the passenger's frequent flyer status, method of
payment or other consumer characteristic. When the identity of the
carrier providing the air transportation becomes known, the ticket
agent would need to provide the specific baggage fee information for
the carrier to not only prospective customers, but also those who
purchased the air-tour package before the identity of the carrier
became known. We request comment on whether this exception for certain
air-tour packages adequately addresses concerns of air-tour package
sellers. We also request comment on whether such an exception
adequately protects consumers.
[[Page 63726]]
2. Change and Cancellation Policies and Fees
This rulemaking proposes making change and cancellation fees and
policies more apparent to consumers when they book tickets. Under the
proposal, carriers and ticket agents would have to display the fee to
change a reservation and the fee to cancel a reservation on the first
page that appears when a consumer conducts a search for air
transportation and a fare is quoted. The fee information would need to
be specific to each fare category displayed and adjusted based on
passenger-specific information provided by the consumer. For example,
if the fare category displayed requires a $50 fee to change the ticket,
then the website should display the change fee for the itinerary and
fare category as ``$50.'' If the consumer's status entitles the
consumer to no change fees, then the website should display ``$0'' as
the applicable change fee for the itinerary, provided that the consumer
has entered passenger-specific information that meets the criteria for
no change fees. Display of the cancellation and change fee by links or
rollovers is not permitted but we request comment on whether it should
be permitted.
In addition to the change and cancellation fees, the Department is
proposing to require that carriers and ticket agents provide
information about certain aspects of their change and cancellation
policies to consumers on the first page that appears when a consumer
conducts a search. This information, which may be provided using links
or pop-ups adjacent to the pertinent fee, would consist of: (1) a brief
summary of the cancellation policy applicable to the consumer's chosen
itinerary and fare category, taking into account the consumer's
passenger-specific information provided, and (2) a brief summary of the
ticket change policies applicable to the consumer's chosen itinerary
and fare category, adjusted for the passenger-specific information
provided. These brief summaries should provide consumers clear,
adequate notice of the rules attached to the chosen itinerary and fare
category, including whether ticket changes or cancellations are allowed
(as well as when and in what circumstances they are allowed), the form
that refunds or airline credits may be provided (e.g., travel voucher
or a credit to the original form of payment), any prohibitions or
conditions that may limit the ability to change or cancel a ticket, and
other information. The Department seeks comment on this proposal.
Should the Department require change fees be disclosed as proposed? If
so, how should the Department address the potential need for a consumer
to also pay a fare difference between the old and new tickets brought
about by dynamic pricing models \35\ many carriers employ? Does the
material change in fare that occurs with many ticket changes being a
potentially larger component of the overall price relative to the
change fee itself represent a more confusing situation for consumers?
Should the Department only require change fees be disclosed, or should
it also require cancellation fees to be disclosed as proposed? Should
the Department allow the proposed disclosures to be provided later in
the ticket purchase process than proposed in this NPRM? Are there
preferred methods for presenting the change and cancellation policy
information?
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\35\ A dynamic pricing model implements price differentiation
for the airline seat and generally increases the price of the
service as fewer seats are available and decreases the price of the
service when more seats are available.
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This rulemaking also proposes to require that carriers and ticket
agents with websites marketed to U.S. consumers where they sell air
transportation display on the last page of the booking process (before
the consumer clicks a button that executes the purchase or reservation)
a brief statement on whether the carrier or ticket agent permits the
consumer's booking to be cancelled without penalty within 24 hours, or
whether the carrier or ticket agent permits the consumer to hold the
reservation without payment for 24 hours. Under 14 CFR 259.5(b)(4),
carriers must currently either permit consumers to cancel their tickets
within 24 hours of purchase without penalty, or, alternatively, allow
consumers to hold their reservations at the quoted fare for 24 hours
without payment, provided that the purchase or reservation is made at
least one week before the flight's departure. The policy that the
carrier chooses must be disclosed in its customer service plan pursuant
to 14 CFR 259.5. The Department is now proposing that the carrier's
chosen policy also be disclosed on the last page of the booking
process. Although ticket agents are not required to develop customer
service plans under 14 CFR 259.5, this rulemaking would also require
ticket agents to disclose the ticket agent's policy for allowing
consumers to cancel their reservations without penalty soon after
purchase or for allowing consumers to hold their reservation without
purchase for a specified period. If carriers or ticket agents offer
both alternatives, which they are not required to do so, then this
information should be disclosed to consumers. The Department seeks
comment on this additional disclosure.
3. Seat Assignment Policies and Fees for Families Traveling With Young
Children
The Department is of the tentative view that disclosure of an
advance seat assignment fee at the beginning of a booking process is
generally not needed because airlines are required to provide a seat
with the cost of the air transportation. However, advance seat
assignments are of critical importance to families traveling with young
children. While these families may not need a guarantee of a particular
seat in advance, they are looking for a guarantee that at least one
accompanying adult would be seated next to a young child.
Section 2309 of the FAA Extension, Safety, and Security Act of 2016
required the Department to review U.S. airline family seating policies
and, if appropriate, establish a policy directing all air carriers
providing scheduled passenger interstate or intrastate air
transportation to establish policies that enable a child, who is age 13
or under on the date an applicable flight is scheduled to occur, to be
seated in a seat adjacent to the seat of an accompanying family member
over the age of 13, to the maximum extent practicable and at no
additional cost.'' Section 2309 provides for an exception when
assignment to an adjacent seat would require an upgrade to another
cabin class or a seat with extra legroom or seat pitch for which
additional payment is normally required. In response to section 2309,
the Department's Office of Aviation Consumer Protection issued a notice
urging airlines to do everything that they can to ensure the ability of
a parent to sit next to his or her young child, including allowing
every young child to sit next to a parent, without charging fees for
adjacent seating.\36\
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\36\ See <a href="https://www.transportation.gov/individuals/aviation-consumer-protection/family-seating/June-2022-notice">https://www.transportation.gov/individuals/aviation-consumer-protection/family-seating/June-2022-notice</a>.
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To the extent airlines do charge fees for a young child to sit next
to a parent, the Department is proposing to require carriers and ticket
agents to disclose these fees to consumers alongside the quoted fare
for each itinerary. More specifically, the NPRM proposes that carriers
and ticket agents disclose alongside the fare the seat fee, if any,
that could be imposed for aa child age 13 or under to be seated
adjacent (i.e., directly next to, and uninhibited by an
[[Page 63727]]
aisle or other obstruction) to an accompanying adult in the same class
of service, so that consumers are informed on the potential ticket
costs. If the carrier does not impose a fee for children 13 or under to
be seated next to an accompanying adult, no seat fee disclosure would
be required for the carrier's flights. If the carrier does impose fees
for children to be assigned seats next to an accompanying adult, then
the carrier or ticket agent's website should disclose the fee to select
a seat that is part of a pair of available adjacent seats. Display of
the fee by links or rollovers is not permitted but we request comment
on whether it should be permitted.
The proposal to disclose the fee for adjacent seating for those
traveling with a young child whenever fare and schedule information is
provided is intended to be performance-based. The Department is not
prescribing a particular way for the regulated entities to comply but
notes that there are several acceptable means of compliance. For
example, to ensure that a consumer receives family seating information
as part of the itinerary search results and accompanying fare
quotations, a carrier or ticket agent could decide to enable consumers
to disclose that a passenger 13 or under will be traveling prior to
initiating an itinerary search. A carrier or ticket agent could
alternatively decide to display family seating fees for all itinerary
searches, regardless of whether a consumer disclosed that a passenger
was 13 or under. As another alternative, carriers that do not impose a
fee for children 13 or under to be seated next to an accompanying adult
would not be obligated to provide any family seating disclosures during
the itinerary search and selection process.
As the Department is aware that seat fees can fluctuate frequently,
the Department is proposing that family seating fees that are quoted
during the itinerary selection process be transactable at the point of
ticket purchase, including on ticket agent websites. (See section on
``Sharing of Airline Ancillary Service Fee Information with Ticket
Agents'', below.)
The Department seeks comment on its proposed disclosures to assist
families traveling with young children. Should the Department permit
these disclosures to be provided later during the booking process, such
as after the stage when a consumer inputs passenger name and age
information? Should the Department be more prescriptive about family
seat fee disclosure requirements (e.g., requiring that websites be
modified to enable consumers to indicate whether a passenger will be 13
or under prior to initiating the search)? Are there technical or other
practical considerations for requiring that family seating fees be
disclosed and transactable? Should disclosure be limited to fees or
would additional information regarding airline family seating policies
be useful to consumers during the ticket purchase process? What
disclosure should be required, if any, when no adjacent seats are
available at the time of the consumer's ticket purchase? The Department
welcomes responses to these questions.
Online Disclosures of Airline Ancillary Service Fees
1. Timing of Online Disclosures
During the 2022 ACPAC meeting, DOT solicited information on the
appropriate timing of disclosure for ancillary service fees (e.g., at
the time of an initial display of schedule information, or at other
times during the booking process, or at the end of the process before a
final purchase). The ACPAC member representing consumers observed that
in order to minimize problems with drip pricing, consumers should have
information on critical ancillary service fees early in the process;
however, he also noted that providing early information on all
ancillary fees could lead to consumers being overwhelmed.\37\
Specifically, he opined that baggage fees, change/cancellation fees,
and seat reservation fees were the biggest ``pain points'' for
consumers that should be disclosed early. Similarly, a consumer
advocacy organization suggested that fees for carry-on and checked
bags, as well as change/cancellation fees and on-time/cancellation
statistics, should be displayed on the first page where a price is
quoted.\38\
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\37\ Comment of John Breyault (Day 1 a.m. session).
\38\ Presentation of FlyersRights, available at <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>-0046.
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This rulemaking proposes that if a U.S. or foreign air carrier or
ticket agent has a website marketed to U.S. consumers where it
advertises or sells air transportation, the carrier and ticket agent
would disclose the first and second checked bag fee, the carry-on bag
fee, the change and cancellation fee, and the seat fee for a child 13
or under to be seated next to an accompanying adult, at the first point
in a search process where a fare is listed in connection with a
specific flight itinerary. It is important that a consumer be provided
fee information for critical ancillary services at the same time as the
fare information is being provided to enable the consumer to make an
informed purchasing decision. We believe that requiring disclosure
during the search process benefits consumers because information
disclosed at the last minute may result in some consumers deciding to
revisit all the travel arrangements already made and possibly begin the
reservation process again to look for flights again.
Regarding disclosure of the fee for a child 13 or under to be
seated adjacent to an accompanying adult, the Department is proposing
to require carriers and ticket agents enable consumers to purchase the
seat fee that is disclosed during the itinerary search at the same time
as the ticket purchase. Prices for advance seat assignments are often
dynamic and change based on availability and time of purchase. While
carriers are prohibited from increasing the change and cancellation
fee, the first and second checked bag fee, and the carry-on bag fee
after the ticket has been purchased,\39\ this is not the case for a
seat assignment fee. Carriers are allowed to increase the price of an
advance seat assignment until the seat assignment itself is purchased.
The Department seeks comment on the timing of the proposed online fee
disclosures in this rulemaking.
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\39\ See 14 CFR 253.7, which prohibits carriers from imposing
monetary penalties on passengers unless the passenger receives
conspicuous written notice on or with the ticket. See also Guidance
on Price Increases of Ancillary Services and Products not Purchased
with the Ticket (December 28, 2011). In that guidance, the
Department announced that with respect to fees for ancillary
services that were not purchased with the air transportation, it
would only enforce the prohibition on post-purchase price increases
for carry-on bags and first and second checked bags. The application
of the prohibition of the post-purchase price increase was also at
issue in a lawsuit filed by two airlines against the Department. The
court considered the rule as applied under the December 28, 2011,
guidance and upheld the Department's rule prohibiting post-purchase
price increases as it is currently being applied. Spirit Airlines,
Inc., v. U.S. Dept. of Transportation (D.C. Cir. July 24, 2012),
slip op. at 20-21. Petition for Writ of Certiorari denied on April
1, 2013.
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2. Passenger-Specific Information
The Department is proposing that the fee information disclosed to a
consumer for critical ancillary services be expressed as passenger-
specific charges if the consumer elects to provide passenger-specific
information to the carrier or ticket agent, such as frequent flyer
type, payment method, or military status. For example, a passenger who
is active in the military may be entitled to an additional piece of
checked luggage free of charge, or a passenger who has qualified at the
highest tier of a carrier's frequent flyer program may be entitled to a
maximum checked luggage weight
[[Page 63728]]
limit of 70 pounds per piece. The carrier or ticket agent would know
that a consumer is conducting a passenger-specific itinerary search if
the consumer has entered this passenger-specific information either
prior to initiating the itinerary search, or if the consumer has logged
into his or her account on the carrier or ticket agent's website,
provided that the consumer's user profile contains the passenger-
specific information.
If the consumer conducting a search elects not to provide
passenger-specific information to the carrier or ticket agent (i.e.,
the consumer conducts an ``anonymous itinerary search''), then the
Department is proposing to require carriers and ticket agents to
disclose the fees for these ancillary services as itinerary-specific
charges. Itinerary-specific refers to variations in fees that depend
on, for example, geography, travel dates, cabin (e.g., first class,
economy), and ticketed fare class (e.g., full fare ticket--Y class). It
is essentially an anonymous search. The Department seeks comment on the
benefits, risks, and practicability of the proposed distinction between
anonymous itinerary searches and passenger-specific searches, as
described above.
3. Opt-Out Option
This NPRM does not propose to permit airlines and ticket agents to
enable consumers to opt out of receiving fee information for critical
ancillary services during the search process. The Department seeks
comment on whether it should allow carriers and ticket agents to
provide consumers an opt-out option from receiving ancillary service
fee information that would otherwise be required. Opt-out options could
potentially include the choice to opt out of seeing all baggage fee
information that would otherwise be required to be displayed (first and
second checked bag and carry-on bag), to opt out of seeing fee
information related to changing or canceling a reservation, to opt out
of seeing seat fee information for a child traveling with an adult, or
to opt out of seeing some of those fees. We anticipate that fee
information for critical ancillary services will improve the decisions
made by consumers but seek comment on whether the volume of information
proposed to be displayed would assist or overwhelm consumers and
whether or not an opt-out provision would be beneficial to consumers.
Is an opt-out provision needed to ensure that consumers can avoid
receiving ancillary service fee information that is of no interest to
them? We are also interested in learning what impact, if any, lack of
an opt-out provision has on the speed of search results or particular
display options an airline or ticket agent may provide. For commenters
advocating an opt-out option, we also request information about how to
define requirements for opt-out options that would adequately protect
consumers and ensure any opt-out option is not confusing or abused, for
example, preventing opt-outs accomplished through a ``click wrap'' or
``browser wrap'' tactic that does not represent a meaningful,
intentional choice. The Department may consider adopting an opt-out
provision in the final rule upon review of comments received and on
further consideration by the Department.
4. Website and Mobile Displays
The Department is proposing to require that the fees for ancillary
services that are critical to a consumer's purchasing decision be
disclosed to consumers using airlines' or ticket agent's websites and
mobile websites. Consumers in increasing numbers are using mobile
devices to book travel. The Department believes that it is important
that the same disclosures that would be provided on airlines' and
ticket agents' desktop websites be provided on mobile websites. The
Department seeks comment on whether it should also consider specific
fee disclosure requirements for airlines' or ticket agents' mobile
applications (apps). The Department seeks comment on whether the
proposed disclosure requirements should also extend to airline and
ticket agent mobile apps, and whether there are any practical
distinctions between information accessed on mobile websites and mobile
apps. It would be helpful to the Department for commenters to provide
data on the percentage of tickets booked on mobile applications, mobile
websites, and desktop websites, or other usage statistics that are
relevant.
The Department is proposing to allow carriers and ticket agents
limited flexibility in how information on ancillary services is
displayed on desktop and mobile websites. Although this proposal would
require carriers and ticket agents to display information for certain
baggage fees, change fees, cancellation fees, and family seating fees
at the first point in a search process where a fare is listed in
connection with a specific flight itinerary, it permits the use of
links or rollovers for other pieces of information. The Department
seeks comment on whether links and rollovers would provide the
necessary flexibility to allow for design displays that would enhance
the user experience and encourage innovation as technology changes. Are
additional flexibilities needed to ensure the display of ancillary
service fee information does not result in screen clutter? Do rollovers
work on mobile devices that have no cursor to hover over a link?
Considering the screen size of mobile devices, would the proposed
display requirement work on mobile platforms? Will there be a danger of
too much unnecessary information creating confusion if fees that are
not under consideration are displayed and are there ways the ``too much
information'' can be mitigated? The Department also requests that
commenters provide information as to whether hyperlink or other
disclosures not adjacent to the fare on mobile sites would or would not
be effective. Should the disclosure requirements be limited to websites
accessed through desktop applications and not apply to those accessed
through mobile applications?
In-Person or Telephone Disclosures of Airline Ancillary Service Fees
In addition to the online disclosures proposed by this rulemaking,
the Department is proposing similar disclosures for tickets purchased
using offline means (i.e., tickets purchased by telephone or at the
ticket counter). Under the proposal, ticket agents and carriers would
have to disclose to consumers purchasing tickets in-person or on the
phone the specific baggage fees, change fees, cancellation fees, and
family seating fees that apply to an itinerary for which a fare is
quoted to the consumer, adjusted based on the passenger's frequent
flyer status, method of payment, or other consumer characteristic.
During a given encounter (phone call, visit), the Department is
proposing that a ticket agent or carrier not wait until after the
consumer has decided to make the reservation or purchase the ticket to
disclose the baggage fees, change fees, cancellation fees or family
seating fees that may apply. Instead, the disclosure would be required
to be made at the time that the schedule information is being provided
to the consumer during the ``information'' and ``decision-making''
portion of the conversation. In essence, a carrier or ticket agent
would not be in compliance if it were to provide a quote for a ticket
price over the phone or in-person without also providing the baggage,
change, cancellation, and family seating fees that apply.
The Department seeks comment on its proposals that carriers and
ticket agents inform consumers of the bag fees, change and cancellation
fees, and family seating fees that apply when consumers attempt to
purchase airline tickets offline, in person, or on the phone. The
[[Page 63729]]
Department is also interested in obtaining input on alternative options
for providing such fee information on the phone or in person (e.g.,
explaining that fees may apply and referring the consumer to the
carrier or ticket agent's website, provided that the website is
accessible to consumers with disabilities).
Sharing of Airline Ancillary Service Fee Information With Ticket Agents
1. Ticket Agents That Sell or Display Airline Fare and Schedule
Information
Under this proposal, airlines would be required to distribute fee
information for critical ancillary services to ticket agents that sell
or display the airlines' fare and schedule information. Carriers would
not be required to distribute ancillary service fee information to any
ticket agent to whom the carrier does not choose to distribute its
fare, schedule, and availability information. In other words, if a
carrier does not share fare information with a ticket agent, then this
proposal would not require that carrier to share ancillary service fee
information with that ticket agent.
Also, under this proposal, the method and channels that carriers
use to distribute fee information to ticket agents would be left to the
discretion of the carrier.\40\ The Department is not proposing to
require carriers to distribute ancillary service fee information to
GDSs because GDSs arrange for air transportation and do not sell or
display a carrier's tickets directly to consumers. By not requiring
that ancillary service fee information be provided to GDSs, the
Department is attempting to minimize government interference with
business relationships. However, carriers are free to distribute this
information to GDSs if they choose to do so. GDSs may provide the
lowest cost and most efficient way of distributing this information to
ticket agents that sell or display the carrier's ancillary services.
Most ticket agents currently receive airline fare information through
GDSs and rely on GDSs as an efficient source of data. Using GDSs may
facilitate display of critical airline ancillary services. Airlines and
ticket agents would have to work in good faith to come to agreement on
the method used to transmit the ancillary service fee information.
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\40\ Industry stakeholders have expressed their views on
information distribution in meetings with the Department. In a
meeting with OACP on December 15, 2021, American Airlines offered
its view that, while it supports expanded disclosure of ancillary
service fees, it cautioned the Department against requiring that the
distribution of such information be made through specific channels,
such as global distribution systems. In a meeting with OACP on
February 23, 2022, the Travel Technology Association (TravelTech)
noted that ancillary fee information can only be provided by ticket
agents to the extent they receive it from carriers. Travel Tech
indicated that its members may engage in bilateral agreements with
airlines to present certain ancillary rule information to consumers
and in some cases may enable consumers to buy a pre-paid seat
through their websites.
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The Department solicits comment on its preliminary decision not to
require airlines to share ancillary service fee data with GDSs. Should
the Department require carriers to distribute the ancillary service fee
information to all ticket agents, including GDSs, to which the carrier
provides fare, schedule, and availability information? How would OTAs
and metasearch sites receive ancillary service fee information from
multiple airlines and disclose that information to consumers if
airlines do not provide that information to GDSs? The Department is
striving to find the most beneficial disclosure rule for consumers
while avoiding any adverse impact on innovations in the air
transportation marketplace, contract negotiations between carriers and
their distribution partners, and a carrier's ability to set its own
fees and fares in response to its own commercial strategy and market
forces.
2. Usable, Accurate and Current (Dynamic) Ancillary Service Fee
Information
The Department is proposing that U.S. and foreign air carriers
provide ticket agents ancillary service fee information that is usable,
accurate, and accessible in real-time. It would not be sufficient for
carriers to provide static pricing to ticket agents. Under this NPRM,
carriers would be expected to facilitate the ability of ticket agents
to access certain baggage fee, change fee, and cancellation fee
information in a non-static, dynamic fashion. The Department does not
prescribe the method that carriers would use to distribute the
information as it wants to minimize government interference and
encourage innovation. A carrier may choose to distribute ancillary fee
information through GDSs if it provides the lowest and most efficient
way to comply, given that many airlines and ticket agents use GDSs
today. In the United States, three GDSs (Sabre, Travelport and Amadeus)
distribute the airline product for the ticket agent channel, and most
airlines use the GDSs to distribute their products to ticket agents,
including corporate travel agents that sell the higher revenue tickets.
In the alternative, airlines may choose to distribute the ancillary fee
information through direct connections between airline reservations
systems and ticket agent systems. Another option may be to distribute
ancillary fee information using the International Air Transport
Association's (IATA) New Distribution Capability (NDC), which is
essentially an XML-based technical standard for use in airline
distribution. The Department would expect airlines to work in good
faith with ticket agents to come to agreement on the method used to
transmit the ancillary service fee information.
Under this proposal, carriers would not be required to provide
information to ticket agents about individual customers but rather the
itinerary-specific and passenger-specific information that would impact
the fee for a critical ancillary service. The Department expects that
carriers and ticket agents would modify how searches for flights are
done to allow consumers to identify any passenger-specific factors that
may impact the fees that consumers might pay for critical ancillary
services. This would enable consumers to better understand the total
cost of the air transportation to them.
Prohibition on Fee if Required Disclosure Is Not Provided
Under this proposal, the practice of collecting a fee from
consumers for critical ancillary services without disclosure of this
fee during the search process would be deemed an unfair and deceptive
practice in violation of 49 U.S.C. 41712. Any fee that has been
unlawfully imposed and collected would need to be refunded to consumers
by the seller of the air transportation.
Transactability
The 2017 SNPRM did not propose that ancillary service fees be
transactable. At the 2022 ACPAC meeting, representatives of the travel
technology industry recommended that the Department require ancillary
fee information to be provided to ticket agents in a transactable
format so that consumers would not have to engage in a separate
transaction to complete the full purchase of air travel.\41\ Airlines
stressed that they value transparency of fare and ancillary fee
information across all channels, and argued that fee information is
often made available to GDSs and third-party sellers, but that
[[Page 63730]]
information may not be adequately transmitted to consumers.\42\
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\41\ See presentations of ASTA, Travel Tech, and Amadeus, and
Skyscanner, available at <a href="https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting/webcast">https://www.transportation.gov/airconsumer/ACPAC/June2022Meeting/webcast</a> (Day 1 afternoon session).
\42\ See, e.g., presentations of IATA, American and Delta,
available at <a href="https://www.regulations.gov/document/DOT-OST-2018-0190">https://www.regulations.gov/document/DOT-OST-2018-0190</a>.
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The Department is not proposing to require that certain ancillary
services (i.e., first and second checked bag, one carry-on item, and
changing or canceling a reservation) be transactable at all points of
sale. Requiring transactability at all points of sale would mean
requiring airlines to permit online travel agencies to sell these
ancillary services. The Department is of the tentative view that this
is unnecessary, given the regulatory limitations placed on increasing
these fees following a ticket purchase, as discussed above.
The Department has not identified evidence of consumer harm
resulting from a lack of transactability of baggage, change, or
cancellation fees. A consumer would pay a change or cancellation fee
only if the consumer makes a change or cancels a reservation. There is
nothing to transact at the time of ticket purchase. Also, the change
and cancellation fee that a consumer would pay cannot increase after
ticket purchase. As for baggage, a consumer is not harmed from not
being able to pay a fee to transport a first checked bag, a second
checked bag or a carry-on item at the time of ticket purchase because
sellers of air transportation cannot increase the fees for these items
beyond what existed at the time that the consumer purchased the airline
ticket. The Department's existing rule regarding baggage fee price
increases and related enforcement policy ensures that the price to
transport a first checked bag, a second checked bag, or a carry-on item
does not increase following the ticket purchase and before the consumer
has the opportunity to purchase baggage transportation services.
Regarding seat assignment fees for a child 13 or under to be seated
next to an accompanying adult, the Department is proposing a
requirement that ticket agents disclose fees for specific seat
assignments. Such a proposal, without transactability, would cause
consumers to be presented with seat assignment options that they cannot
purchase immediately during the booking process, but which could change
by the time a consumer attempts to purchase the seat. There is a risk
that consumers would be confused by being presented a seat assignment
that they cannot obtain at the advertised price. As such, the
Department is proposing to require that carriers and ticket agents make
seat fees for a child 13 or under to be seated next to an accompanying
adult to be transactable at the time the ticket purchase is made. DOT
has encouraged airlines not to impose such a charge, but to the extent
they do impose such charges, the proposed rule would require disclosure
and transactability. This rulemaking may further incentivize airlines
not to charge fees for a young child to sit next to an accompanying
adult. The Department welcomes comment on whether airlines' response to
this rulemaking would include reducing or eliminating such charges.
Also, the Department solicits comment on requiring airlines to disclose
that they charge fees for adjacent seating without disclosing the
amount and requiring that it be transactable as proposed.
Impact on Existing Requirements
This proposed rule, if adopted, would require carriers and ticket
agents to provide passenger-specific baggage fee information (if
passenger-specific information is provided by the consumer) for one
carry-on item and a first and second checked bag at the first point in
a search process where a fare is listed in connection with a specific
flight itinerary. The regulation in 14 CFR 399.85(b) requires carriers
and ticket agents to state that baggage fees may apply on the first
screen where a fare quotation is available and refer consumers to a
page on their websites where this information may be obtained. We are
tentatively of the view that there would no longer be a need for such a
requirement except for certain ticket agent displays related to air
tour packages that are unable to provide customer-specific baggage fee
information.
In addition to amending 14 CFR 399.85(b), we are considering
eliminating the requirement in 14 CFR 399.85(c) regarding disclosure of
bag fee information on e-ticket confirmations as it may be of limited
use. Current requirements in 14 CFR 399.85(c) provide that carriers and
ticket agents must include specific fee information for first and
second checked bags and a carry-on item on all e-ticket confirmations
for air transportation, and the fee information must take into account
factors such as frequent flyer status that affect those charges. Under
the proposed rule, consumers would have already received this
information during the search process. We request comment on whether
there is any benefit in retaining the requirements in 14 CFR 399.85(c)
if the proposed requirement to display passenger-specific baggage fee
information is adopted.
Also, under the existing regulation in 14 CFR 399.85(a), carriers
must promptly and prominently disclose any increase in bag fees and
changes in bag allowances on the homepages of their websites for at
least three months after the change becomes effective. This NPRM does
not propose substantive changes to this requirement and proposes only
language changes to clarify the scope of websites the regulation is
intended to impact. These proposed changes to 14 CFR 399.85(a) are
intended to make the regulation more consistent with other regulations
related to carrier and ticket agent websites. We request comment on
whether the notice provision in 14 CFR 399.85(a) of the existing
regulation would still be useful to consumers if this NPRM is adopted
as final.
The Department is also proposing to amend 14 CFR 399.88, which
states that any seller of scheduled air transportation within, to, or
from the United States is prohibited from increasing the price after
the air transportation has been purchased by the consumer, except in
the case of an increase in a government-imposed tax or fee if the
potential for an increase was disclosed as required prior to purchase.
Under 14 CFR 399.88, the prohibition on increasing the price includes
increases in fees for ancillary services such as those for checked
baggage, carry-on baggage, advance or upgraded seating assignments,
pillows and blankets, and meals, regardless of whether these items are
purchased along with the air transportation. However, in December 2011,
the Department announced that with respect to fees for ancillary
services that were not purchased with the air transportation, it would
only enforce the prohibition on post-purchase price increases for
carry-on bags and first and second checked bags.\43\ The application of
the prohibition of the post-purchase price increase was also at issue
in a lawsuit filed by two airlines against the Department. The court
considered the rule as applied under the December 28, 2011, guidance
and upheld the Department's rule prohibiting post-purchase price
increases as it is currently being applied.\44\
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\43\ See also Guidance on Price Increases of Ancillary Services
and Products not Purchased with the Ticket (December 28, 2011).
\44\ Spirit Airlines, Inc., v. U.S. Dept. of Transportation
(D.C. Cir. July 24, 2012), slip op. at 20-21. Petition for Writ of
Certiorari denied on April 1, 2013.
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The Department is proposing to amend Sec. 399.88 to be consistent
with how it is currently being applied. This rulemaking does not
propose changes to
[[Page 63731]]
the existing prohibition in Sec. 399.88 against increasing the price
of air transportation after its purchase, nor does it propose
additional ancillary services beyond baggage that has traditionally
been included in the price of a ticket to be frozen at the time of
ticket purchase. In other words, the proposed amendment to Sec. 399.88
would continue to require sellers of scheduled air transportation to
apply the bag fee policies and fees that existed at the time the ticket
is purchased for the first and second checked bag and carry-on item.
For example, if the standard first checked bag fee at the time of
ticket purchase is $30 when purchased in advance, $50 when purchased at
the airport, and free for an elite frequent flyer, then the passenger
would not pay a bag fee if he or she maintains the elite frequent flyer
status on the date of travel. However, if the passenger does not
maintain the same status and pays for the bag at the airport, the
passenger would pay $50 for the first checked bag. The Department seeks
comment on its amendment of Sec. 399.88. Should the Department require
that the price for ancillary services not purchased with the ticket be
frozen beyond first and second checked bag and a carry-on item? For
example, should it extend to fees for all baggage (including fees for
oversized or overweight bags) or all ancillary services that have been
identified as being critical to a consumer's purchasing decision?
Further, the Department is proposing non-substantive changes to the
current requirement in 14 CFR 399.84(a) that when a carrier or ticket
agent quotes a price in advertising or a solicitation, the price should
be the total fare, inclusive of taxes and fees. The proposed changes
consist of minor changes to Sec. 399.84(a) to promote readability, as
well as additional language to accommodate the ancillary fee
disclosures proposed in this NPRM. More specifically, we are proposing
that if a consumer wishes to view ancillary service fees such as bag
fees incorporated into the total quoted price during an itinerary
search, carriers and ticket agents would be permitted to display the
total price of the transportation, inclusive of mandatory taxes and
fees and the consumer's selected ancillary service fees, more
prominently than a price that includes only all mandatory charges. The
Department is seeking comment on this clarification to 14 CFR
399.84(a). Again, these language adjustments are not intended to make
substantive changes to the full fare rule.
As stated in 14 CFR 399.84(a), carriers and ticket agents may state
separately charges included within the single total price on their
websites, but such charges may not be false or misleading, may not be
displayed more prominently than the total price, may not be presented
in the same or larger size as the total price, and must provide cost
information on a per passenger basis that accurately reflects the cost
of the item covered by the charge. Consistent with this requirement,
advertisements that state discounts in the form of percentage-off sales
must refer to a discount off the total price to be paid by the consumer
for the ticket, unless the airline or ticket agent explicitly states
that the discount is based on only a portion of the fare. For example,
an advertisement that indicates air transportation is on sale for a
percentage off but does not apply the discount to the total price would
be misleading if it did not specify that it is a percentage off only
the ``base'' fare or other fare component. When the terms ``flight,''
``ticket,'' or ``fare'' are used in an advertisement stating a
percentage off, a reasonable consumer would understand that the
percentage off applies to the total price of the transportation. The
Department is of the view that it would be an unfair and deceptive
practice for an airline or ticket agent to advertise discounts off a
``flight,'' ``ticket,'' or ``fare,'' without disclosing in the first
instance that the discount is only applied to a component of the total
price (e.g., the ``base'' fare). The practice is unfair in that
consumers are likely to encounter higher charges than expected, which
can multiply if a consumer relies on the promotional discount for
multiple passengers on an itinerary. The harm is not easily avoided due
to a lack of clarity in the advertising language that carriers use. The
Department has also not identified any benefits to consumers or to
competition from this practice. The practice is also deceptive in that
the carriers' advertising is likely to mislead consumers into believing
that the discount will be applied to the entire ticket price (i.e., the
full fare), rather than only a portion of the price to be paid. The
belief that a discount applies to the total price when the
advertisement provides a discount off of the ``flight,'' ``ticket,''
``fare,'' or other terms of this nature, is reasonable. The total
required charge that a consumer will be made to pay for air
transportation is also material. The Department is also concerned that
there is lack of clarity about the meaning of the term ``base'' fare.
In some cases, even offering a discount off the ``base fare'' may be
misleading if, without more clarity, the discount only applies to a
portion of the carrier-imposed charges, and not the total amount of
carrier-imposed charges (i.e., the fare for the transportation plus
carrier-imposed charges such as fuel surcharges and other mandatory
carrier fees). The Department solicits comment on defining base fare to
mean all of the carrier-imposed charges included within the total
price. The Department is soliciting comment on whether the full fare
regulation should be amended to provide greater clarity on this type of
advertising.
Compliance Period
The Department is tentatively of the view that a six-month
implementation period from the issuance date of a final rule would be
appropriate for carriers and ticket agents to display a first and
second checked bag fee, a carry-on bag fee, change and cancellation
fee, and family seating fees to consumers whenever fare and schedule
information is provided online. It also provides sufficient time to
train agents to provide fee information for critical ancillary services
to consumers when providing fare and schedule information in person or
over the phone. It also takes into account the time needed for carriers
to share ancillary service fee information with ticket agents.
In proposing this implementation period, the Department also
considered the time that would be needed for airlines and ticket agents
to organize ancillary fee data and reprogram and test their websites.
Separately, the Department considers the time needed to determine how
ancillary service fee information will be distributed from carriers to
ticket agents. At the June 2022 ACPAC meeting, one airline
representative indicated that broadly speaking, sharing ancillary fee
data with ticket agents is not technologically difficult and could be
accomplished within a short time frame.\45\ If this proposal were to
become a final rule, we would anticipate carriers will work in good
faith with ticket agents to ensure that the distribution method and
details are worked out well in advance of the display deadline. We
request comment on whether the Department should impose a date certain
by which carriers must share ancillary service fee information with
ticket agents.
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\45\ Remark of American Airlines, available at June 28 and 29,
2022 Meeting of the Aviation Consumer Protection Advisory Committee
(ACPAC) [bond] U.S. Department of Transportation (Day 1 afternoon
session).
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We also seek comment on whether proposed implementation periods are
too lengthy or too short. If the proposed implementation periods are
either too lengthy or too short, how long of an
[[Page 63732]]
implementation period would be appropriate and why?
Regulatory Notices
Executive Order 12866 (Regulatory Planning and Review) and DOT
Regulatory Policies and Procedures
The Office of Management and Budget has determined that this
proposed rule is a significant regulatory action under Executive Order
12866 and requires an assessment of potential benefits and costs.
Accordingly, the Department has prepared a regulatory impact analysis
for the proposed rule, summarized in this section and available in the
docket.
The proposed rule changes how U.S. air carriers, foreign air
carriers, and ticket agents disclose information about certain
ancillary fees for flights and changes how certain customers can
purchase assigned seats. Ancillary fees are fees for optional services
provided by a carrier beyond passenger air transportation. The proposed
rule would require carriers and ticket agents to show baggage fees,
ticket change fees, and ticket cancellation fees when they first show
fares and schedules to consumers searching for flights. The proposed
rule would also require the seating fees for children 13 or under to be
shown by airlines and ticket agents that display or sell tickets
whenever fare and schedule information is provided. In addition, the
Department is proposing that consumers be able to transact (i.e.,
purchase) these fees from airlines and ticket agents that sell tickets.
Finally, the proposed rule would require carriers and ticket agents to
provide the same ancillary fee information to consumers buying tickets
in person or on the phone.
The regulatory impact analysis uses a basic economic model of
asymmetric information as a framework for evaluating the proposed rule.
Due to a lack of data and other significant uncertainties, it is not
possible to evaluate the effects of the proposed rule quantitatively.
The rulemaking would yield societal benefits if it leads to reduced
deadweight loss from inaccurate price calculations or reduced search
costs. Inaccurate price calculations lead to overconsumption and can
distort consumer perceptions in ways that confer a competitive
advantage to producers who produce a lower-quality product. While we
lack information to estimate benefits, we calculated a hypothetical
example range using methods from earlier rulemakings. At the same time,
the rulemaking could conceivably lead to crowding out of relevant
information for some consumers. The potential effect represents an
offset to benefits, and it is possible that it equals or outweighs the
benefits. Thus, it is not possible to quantify at this time whether the
proposed rule yields benefits that exceed costs.
The primary costs of the proposed rule are the costs that carriers
and ticket agents would incur to share ancillary fee data, modify
websites, and allow transactability for assigned seats for children 13
or under. These costs include startup implementation costs as well as
ongoing costs. Third parties involved in data exchange, such as global
distribution systems (GDSs)) and direct-channel companies, would incur
costs as well despite not being directly regulated by the rule. Because
these entities are already starting to upgrade systems for market
reasons, the cost properly associated with the proposed rule is the
cost of requiring them to upgrade earlier than they would without the
rule.
Table 1 summarizes the results of the analysis and the potential
economic effects of the proposed rule.
Table 1--Summary of Annual Economic Effects
------------------------------------------------------------------------
Item Annual amount
------------------------------------------------------------------------
Benefits:
Gross benefits:
Reduction in deadweight loss due to See illustrative example
increased accuracy in consumers' price in regulatory impact
calculations. analysis (RIA).
Reduction in search costs for consumers See illustrative example
seeking information on ancillary fees.. in RIA.
Reduction in surprise costs and anxiety Not estimated.
for passengers traveling with children.
Market feedback effects (enhanced price Not estimated.
and quality combinations).
Offsets to gross benefits:
Increase in search costs for consumers Not estimated.
seeking information on items displaced
by new disclosures.
Total benefits....................... Indeterminate.
Costs:
Implementation and contract negotiation See illustrative example
costs for carriers, ticket agents, GDS in RIA.
companies, and direct-connect companies
to display ancillary fees and allow
transactability for assigned seats for
children 13 or under.
Ongoing costs for carriers to provide See illustrative example
data. in RIA.
Ongoing costs for carriers and ticket Not estimated.
agents to exchange and maintain
ancillary fee information for offline
and in-person purchases.
Total costs.......................... Not estimated.
Transfers:
Gains in consumer surplus (from airlines Indeterminate.
back to consumers).
Net benefits......................... Indeterminate.
------------------------------------------------------------------------
Table 2 summarizes the key uncertainties for quantifying or
monetizing the economic effects of the proposed rule. The same
uncertainties that prevent the estimation of primary impacts preclude
the assessment of potential secondary effects, including effects on
airfares, ancillary fees, ancillary services, or GDS contracts with
carriers and ticket agents. The Department seeks comment on these
issues, as well as on potential implementation costs of the proposed
rule and the potential changes on consumer search costs and decision-
making.
[[Page 63733]]
Table 2--Summary of Key Uncertainties for Quantifying Economic Effects
------------------------------------------------------------------------
Item Annual amount
------------------------------------------------------------------------
Benefits:
Gross benefits:
Reduction in deadweight loss due to <bullet> Amount of price
increased accuracy in consumers' price mistake.
calculations. <bullet> Number of
passengers who do not
incorporate full
information into price
calculation.
<bullet> Number of
passengers who would
choose not to use
ancillary services with
full price information
versus those who would
forgo air travel
altogether.
Reduction in search costs for consumers <bullet> Amount of time
seeking information on ancillary fees. saved.
<bullet> Number of
consumers who would save
time shopping for
airline fares.
Reduction in surprise costs and anxiety <bullet> Number of
for passengers traveling with children. consumers unaware of
ancillary fees.
Offsets to gross benefits:
Increase in search costs for consumers <bullet> Increase in
seeking information on items displaced search time.
by new disclosures. <bullet> Number of
consumers who experience
increased search time.
Costs:
Implementation and ongoing costs for <bullet> Needed changes
carriers, ticket agents, GDS companies, to websites.
and direct-connect companies to display <bullet> Needed changes
ancillary fees and allow transactability to programming.
for assigned seats for children 13 or
under.
Ongoing costs for carriers and ticket <bullet> Amount of
agents to exchange and maintain training required to
ancillary fee information for offline enable ticket agents to
and in-person purchases. use ancillary fee
information.
Transfers:
Gains in consumer surplus (from airlines <bullet> Extent to which
back to consumers). existing industry
pricing practices
increase producer
surplus (profits).
------------------------------------------------------------------------
Executive Order 13132 (Federalism)
This NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132 (``Federalism''). This NPRM
does not propose any requirement that (1) has substantial direct
effects on the States, the relationship between the National Government
and the States, or the distribution of power and responsibilities among
the various levels of government, (2) imposes substantial direct
compliance costs on State and local governments, or (3) preempts State
law. States are already preempted from regulating in this area by the
Airline Deregulation Act, 49 U.S.C. 41713. Therefore, the consultation
and funding requirements of Executive Order 13132 do not apply.
Executive Order 13175
This NPRM has been analyzed in accordance with the principles and
criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because none of the
options on which we are seeking comment would significantly or uniquely
affect the communities of the Indian tribal governments or impose
substantial direct compliance costs on them, the funding and
consultation requirements of Executive Order 13084 do not apply.
Regulatory Flexibility Act
When a Federal agency is required to publish a notice of proposed
rulemaking (5 U.S.C. 553), the Regulatory Flexibility Act of 1980 (5
U.S.C. 601 et seq.) requires the agency to conduct an initial
regulatory flexibility analysis (IRFA). An IRFA describes the impact of
the rule on small entities (5 U.S.C. 603). An IRFA is not required if
the agency head certifies that a rule will not have a significant
economic impact on a substantial number of small entities (5 U.S.C.
605).
The Department has prepared an IRFA for this proposed rule,
summarized in this section and available at <a href="http://regulations.gov">regulations.gov</a> under
Docket No. DOT-OST-2022-0109.
The proposed rule would have some impact on U.S. air carriers,
foreign air carriers and ticket agents that qualify as small entities.
It would also have some impact on Global Distribution Systems (GDSs),
but none of the three major GDS companies in the market (Amadeus,
Sabre, and Travelport) qualify as small businesses.
A carrier is a small entity if it provides air transportation
exclusively with small aircraft, defined as any aircraft originally
designed to have a maximum passenger capacity of 60 seats or less or a
maximum payload capacity of 18,000 pounds or less, as described in 14
CFR 399.73. In 2020, 28 carriers meeting these criteria reported
passenger traffic data to the Bureau of Transportation Statistics.\46\
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\46\ Bureau of Transportation Statistics. No date. ``T1: U.S.
Air Carrier Traffic and Capacity Summary by Service Class.'' <a href="https://transtats.bts.gov/">https://transtats.bts.gov/</a>.
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A ticket agent is a small entity if it has total annual revenues
below $22 million.\47\ This amount excludes funds received in trust for
an unaffiliated third party, such as bookings or sales subject to
commissions, but includes commissions received. In 2017, the latest
year with available data, 7,827 travel agency establishments had annual
revenues of less than $25 million.\48\ This number overestimates the
number of small entities because some establishments may have annual
revenues greater than $22 million.
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\47\ See https://www.sba.gov/document/support--table-size-
standards, NAICS Code 561510.
\48\ U.S. Census Bureau. 2022. ``Economic Census.'' <a href="https://www.census.gov/programs-surveys/economic-census.html">https://www.census.gov/programs-surveys/economic-census.html</a>.
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The proposed rule could have impacts on small entities because
carriers and ticket agents would incur costs to modify websites and
upgrade systems to exchange ancillary fee data. Because the Department
could not estimate these costs reliably, it could not determine whether
the proposed rule would impose a significant impact on a substantial
number of small entities. The Department seeks comment on the potential
implementation costs of the proposed rule for small entities.
[[Page 63734]]
Paperwork Reduction Act
Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.) (PRA),
no person is required to respond to a collection of information unless
it displays a valid Office of Management and Budget (OMB) control
number. The Department invites interested parties to comment on the
information collection requirements contained in this document. As
prescribed by the PRA, the requirement will not go into effect until
OMB has approved the requirement.
This NPRM proposes three new information collections: (1) U.S. air
carriers, foreign air carriers, and ticket agents must disclose, during
the booking process, applicable fee information for the first and
second checked baggage and for carry-on baggage, applicable fee and
policy information for changing and cancelling reservations, and, for
bookings that involve a passenger 13 or under, the seat fee, if any,
for the child passenger to be seated next to an accompanying adult; (2)
air carriers, foreign air carriers, and ticket agents must disclose
their policy on 24-hour ticket hold or cancellation; and (3) air
carriers and foreign air carriers must ensure that partner carriers and
ticket agents receive information regarding certain baggage fees,
change and cancellation fees and policies, and family seating fee so
that the partner carriers and ticket agents can accurately provide such
information to consumers and so that the family seating fee can be
transactable at the point of ticket purchase.
For each of the information collections, the title, a description
of the respondents, and an estimate of the burdens are set forth below:
1. Requirement that U.S. air carriers, foreign air carriers, and
ticket agents disclose, during the booking process, the applicable fee
information for the first and second checked baggage, one carry-on bag,
the applicable fee and policy information for changing and canceling
reservation, and the seat fee, if any, for a passenger 13 or under to
be seated next to an accompanying adult.
Title: Disclosure of Ancillary Fees and Policies During the Air
Transportation Booking Process:
Respondents: U.S. carriers, foreign air carriers, and ticket agents
that sell or display carrier fare and schedule information to consumers
in the United States.
Number of Respondents: We estimate that as many as 206 U.S. air
carriers and foreign air carriers and as many as 600 ticket agents may
be impacted by this requirement. Our estimate is based on the following
information and assumptions: Ticket agents includes online travel
agencies (OTAs), brick-and-mortar travel agencies, corporate travel
agencies, and tour operators that market airline tickets. There may be
approximately 9,500 travel agencies and over 2,500 tour operators in
the United States, although not all of those entities market air
transportation online to consumers in the United States. In addition,
most ticket agents rely on global distribution systems (GDSs) to create
online fare and schedule displays. GDSs and entities that create or
develop and maintain their own online fare and schedule displays, such
as many of the impacted carriers and the largest travel agents, will
incur some planning, development, and programming costs to reprogram
their systems to provide online displays of fare and schedule
information that includes baggage fee information on their websites.
For these reasons, we assume that about five percent of United States
ticket agents, including GDSs and large travel agencies, or as many as
600 ticket agents, would be impacted by this requirement. Many smaller
carriers also rely on GDSs to create online fare and schedule displays
so our estimate of 206 impacted carriers may be overstated.
Estimated Annual Burden on Respondents: Approximately 80 hours per
respondent. Our estimate is based on the following information and
assumptions: the primary costs to respondents for the disclosure
requirement would arise from programming, data management, website
modification, and other related costs to carriers and ticket agents to
display the required ancillary fee information. Revising website
displays in this manner would likely be similar to the revisions that
carriers and ticket agents needed to make to their websites to comply
with the requirement to include all taxes and fees in fare displays
(``full fare rule''), as prescribed by the Enhanced Airline Passenger
Protections II rulemaking.\49\ In that rulemaking, the Department
estimated that compliance with the full fare rule would require
approximately 80 hours per respondent.\50\
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\49\ 76 FR 23110 (Apr. 25, 2011).
\50\ See Regulatory Impact Analysis on page 59, available at
<a href="https://www.regulations.gov/document?D=DOT-OST-2010-0140-2046">https://www.regulations.gov/document?D=DOT-OST-2010-0140-2046</a>.
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The burdens in this rulemaking are expected to be incurred one time
by regulated entities. Once the modifications required by this
information collection have been incorporated into the websites of
regulated entities, we do not expect that this information collection
will impose additional ongoing costs, such as website maintenance, for
regulated entities who have been operating websites prior to the
promulgation of this rulemaking. As currently proposed, this rulemaking
would not require the creation of new websites by regulated entities
that did not already maintain websites for the purpose of selling air
transportation. For those entities selling air transportation through
other means, such as by phone, the rule would require that such
entities inform consumers about certain ancillary service fees at the
time a fare is quoted. Due to the relatively marginal increase in time
needed to orally convey the information required by this information
collection, the burden of this information collection with respect to
offline purchases of air transportation is expected to be minimal.
Estimated Total Annual Burden: Approximately 64,480 hours for all
respondents (based on an assumption of 16,480 hours for carriers and
48,000 hours for ticket agents). Based on an estimated mean hourly wage
of $45.90 for web and digital interface designers,\51\ this results in
a total annual cost of $2,959,632 ($756,432 for carriers and $2,203,200
for ticket agents).
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\51\ <a href="https://www.bls.gov/oes/current/oes151255.htm">https://www.bls.gov/oes/current/oes151255.htm</a>.
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Frequency: Once information is incorporated into website displays,
this rulemaking would not require further modifications to websites.
Ongoing website costs (such as for maintenance) are expected to be
unchanged by this rulemaking.
2. Requirement that U.S. air carriers, foreign air carriers, and
ticket agents disclose on their websites 24-hour hold or cancellation
policies.
Title: Disclosure of 24-hour hold or cancellation policy on carrier
and ticket agent websites during the booking process.
Respondents: U.S. carriers, foreign air carriers, and ticket agents
that sell or display carrier fare and schedule information to consumers
in the United States.
Number of Respondents: We estimate that the same regulated entities
impacted by Information Collection 1 would be impacted by this
requirement. Our estimates include 206 U.S. air carriers and foreign
air carriers and as many as 600 ticket agents.
Estimated Annual Burden on Respondents: Approximately 80 hours per
respondent. The primary costs to respondents would arise from the
design, programming, and modification of websites to display 24-hour
hold and
[[Page 63735]]
cancellation policy information, which is primarily static, prior to
the ticket purchase. This rulemaking would not require the creation of
new websites by regulated entities that did not already maintain
websites for the purpose of selling air transportation.
Estimated Total Annual Burden: This information collection would
result in an estimated annual burden of 48,360 hours (based on an
assumption of 12,360 hours for carriers and 36,000 hours for ticket
agents).
3. Requirement that U.S. air carriers and foreign air carriers
ensure that partner carriers and ticket agents receive information
regarding certain baggage fees, change and cancellation fees and
policies, and family seating fee so the partner carriers and ticket
agents can accurately provide such information to consumers.
Title: Disclosure of baggage and other fee information to partner
carriers and ticket agents.
Respondents: U.S. air carriers and foreign air carriers that
provide fare, schedule, and availability information to ticket agents
to sell or display flights within, to, or from the United States.
Number of Respondents: We estimate that approximately 206 carriers
will be impacted by this requirement. This includes foreign carriers
that may not serve the United States on their own equipment but may
sell connecting itineraries between the United States and a foreign
point, when at least one of the foreign-to-foreign segments is operated
by the foreign carrier.
Estimated Annual Burden on Respondents: Approximately 16 hours per
respondent. The proposed information collection would require carriers
to either distribute baggage fee and family seating information or make
the specific policies, including the calculation of baggage and seat
fees applicable for passenger-specific itineraries, available to third
parties. Carriers selling tickets in the United States already display
baggage and ancillary fee information on their websites, as required by
existing regulation (14 CFR 399.85(d)). This information includes the
use of baggage fee calculators and other tables accessible to
consumers. The rulemaking would require that this information be made
available in such a way that partner carriers and ticket agents have
access to this information in a non-static, dynamic format such that
the partner carriers and ticket agents can disclose baggage fee and
family seating information to consumers during each itinerary search
and to allow for the purchase of a seat fee for a child passenger at
the same time as the ticket purchase. Because partner carriers already
have mechanisms to share this information with third parties, the
additional modifications that would be required by this information
collection are not expected to be significant. Moreover, carriers
already share this information with each other (i.e., partner carriers)
to facilitate codeshare and interline ticketing. This potential burden
of sixteen hours per respondent, as referenced here, may overestimate
the actual burden for most carriers.
Estimated Total Annual Burden: This information collection would
result in an estimated annual burden of 3,296 hours. Based on an
estimated mean hourly wage of $46.46 for computer programmers,\52\ this
results in a total cost of approximately $153,132.
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\52\ <a href="https://www.bls.gov/oes/current/oes151251.htm">https://www.bls.gov/oes/current/oes151251.htm</a>.
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The Department invites interested persons to submit comments on any
aspect of each of these information collections, including the
following: (1) The necessity and utility of the information collection,
(2) the accuracy of the estimate of the burden, (3) ways to enhance the
quality, utility, and clarity of the information to be collected, and
(4) ways to minimize the burden of collection without reducing the
quality of the collected information. Comments submitted in response to
this NPRM will be summarized or included, or both, in the request for
OMB approval of these information collections.
Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (UMRA) requires, at 2
U.S.C. 1532, that agencies prepare an assessment of anticipated costs
and benefits before issuing any rule that may result in the expenditure
by State, local, and tribal governments, in the aggregate, or by the
private sector, of $100 million or more (adjusted annually for
inflation) in any one year. As described elsewhere in the preamble,
this proposed rule would have no such effect on State, local, and
tribal governments or on the private sector. Therefore, the Department
has determined that no assessment is required pursuant to UMRA.
National Environmental Policy Act
The Department has analyzed the environmental impacts of this
proposed action pursuant to the National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.) (NEPA) and has determined that it is
categorically excluded pursuant to DOT Order 5610.1C, Procedures for
Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979).
Categorical exclusions are actions identified in an agency's NEPA
implementing procedures that do not normally have a significant impact
on the environment and therefore do not require either an environmental
assessment (EA) or environmental impact statement (EIS). See 40 CFR
1508.4. In analyzing the applicability of a categorical exclusion, the
agency must also consider whether extraordinary circumstances are
present that would warrant the preparation of an EA or EIS. Id.
Paragraph 4(c)(6)(i) of DOT Order 5610.1C provides that ``actions
relating to consumer protection, including regulations'' are
categorically excluded. The purpose of this rulemaking is to enhance
protections for air travelers and to improve the air travel experience.
The Department does not anticipate any environmental impacts, and there
are no extraordinary circumstances present in connection with this
rulemaking.
Signed this 25th day of September 2022, in Washington, DC.
Peter Paul Montgomery Buttigieg,
Secretary of Transportation.
List of Subjects in 14 CFR Part 399
Air carriers, Consumer protection, Enforcement.
For the reasons stated in the preamble, DOT proposes to amend 14
CFR chapter II, subchapter F, as follows:
PART 399--STATEMENTS OF GENERAL POLICY
0
1. The authority citation for part 399 continues to read as follows:
Authority: 49 U.S.C. 41712, 40113(a).
0
2. Revise Sec. 399.80(s) to read as follows:
Sec. 399.80 Unfair and deceptive practices of ticket agents.
* * * * *
(s) Failing to disclose and offer web based discount fares to
prospective passengers who contact the agent through other channels
(e.g., by telephone or in the agent's place of business) and indicate
that they are unable to use the agent's website due to a disability and
failing to disclose ancillary service fee information (as required by
Sec. 399.85) to prospective passengers who contact the agent through
other channels (e.g., by telephone or in the agent's place of
business). The disclosure of ancillary service fee information (as
required by Sec. 399.85) must be made at the time that the schedule
information is being provided to the consumer.
0
3. Revise Sec. 399.84(a) to read as follows:
[[Page 63736]]
Sec. 399.84 Price advertising and opt-out provisions.
(a) The Department considers any advertising or solicitation by a
direct air carrier, indirect air carrier, an agent of either, or a
ticket agent, for passenger air transportation, a tour (i.e., a
combination of air transportation and ground or cruise accommodations)
or tour component (e.g., a hotel stay) that must be purchased with air
transportation that states a price for such air transportation, tour,
or tour component to be an unfair and deceptive practice in violation
of 49 U.S.C. 41712, unless the price stated is the entire price to be
paid by the customer to the carrier, or agent, for such air
transportation, tour, or tour component.
(1) Charges included within the single total price listed (e.g.,
government taxes) may be stated separately or through links or ``pop
ups'' on websites that display the total price, but such charges may
not be false or misleading, may not be displayed prominently, may not
be presented in the same or larger size as the total price, and must
provide cost information on a per passenger basis that accurately
reflects the cost of the item covered by the charge.
(2) An airline or ticket agent may display a price that includes
all mandatory charges and one or more ancillary service fees more
prominently than a price that only includes all mandatory charges.
* * * * *
0
4. Revise Sec. 399.85 to read as follows:
Sec. 399.85 Notice of ancillary service fees.
(a) Definitions. For purposes of this section, the following
definitions apply:
Ancillary service fee means the fee charged for any optional
service the U.S. or foreign air carrier provides beyond passenger air
transportation. Such fees may include, but are not limited to, charges
for checked or carry-on baggage, canceling or changing a reservation,
advance seat selection, in-flight beverages, snacks and meals, lounge
access, bedding or other amenities, or seat upgrades.
Ancillary service package means a package or bundle of one or more
ancillary services offered for sale by a carrier or ticket agent. Such
packages are typically offered after the consumer has selected an
itinerary and fare category during the booking process. Carriers and
ticket agents are not required to offer ancillary service packages.
Anonymous itinerary search means a search conducted on the website
of a U.S. carrier, a foreign air carrier, or ticket agent, that does
not take into account information specific to a characteristic of the
passenger that impacts the ancillary service fees to be charged or
other parameters relevant to these fees (e.g., size and weight
limitations on baggage).
Consumer or user means the person who uses the website of a U.S.
carrier, a foreign carrier, or ticket agent, to search for and/or
purchase air transportation. ``Consumer'' or ``user'' may also refer to
a person who seeks to obtain information about air transportation,
whether through a website or other means.
Passenger-specific itinerary search means a search conducted on the
website of a U.S. carrier, foreign air carrier, or ticket agent that
takes into account information specific to a characteristic of the
passenger that may impact the ancillary service fees to be charged or
other parameters relevant to these fees (e.g., size and weight
limitations on baggage). Such information could include the passenger's
status in the airline's frequent flyer program, the passenger's
military status, or the passenger's status as a holder of a particular
credit card. An itinerary search is ``passenger-specific'' when a user
has provided passenger-specific information prior to conducting the
search, including when conducting previous searches if the information
is cached, or if the user conducts a search while logged into the
search website and the operating entity of that website has passenger-
specific information as part of the user's profile.
(b) Online fee disclosures of baggage. Each U.S. air carrier,
foreign air carrier, and ticket agent that has a website marketed to
U.S. consumers where it advertises or sells air transportation must
accurately display (or cause to be displayed) the fee that applies, if
any, to an itinerary for a first checked bag, a second checked bag, and
a carry-on bag. The fees must be included on the first page displayed
when a consumer conducts a search for air transportation when fare and
schedule information is shown. Display of the baggage fee by links or
rollovers is not permitted. Ancillary service fees other than those
referenced in this paragraph (b) may also be displayed on the same
page, at the carrier or ticket agent's discretion. All fees displayed
must be the total to be paid by the consumer for the ancillary service.
(1) Consumers must be offered both the option to conduct a
passenger-specific itinerary search and the option to conduct an
anonymous itinerary search. For passenger-specific itinerary searches,
the fees required to be displayed under this paragraph (b) must be
adjusted to reflect accurately the itinerary of the passenger, the fare
category displayed or selected, and the status of the passenger. For
anonymous itinerary searches, the fees required to be displayed under
this paragraph (b) must be adjusted to reflect accurately the itinerary
of the passenger and the fare category displayed or selected, without
taking into account passenger-specific information.
(2) If the carrier or ticket agent displays multiple fare
categories for the same flight in response to an itinerary search
(e.g., the search results page displays basic economy, restricted
economy, flexible economy, and business class fares simultaneously for
the same flight), the carrier or ticket agent must display the bag fees
applicable to each fare category associated with that fee. In
circumstances where a particular fare category prohibits the checking
of a bag or the carriage of a carry-on bag, the carrier or ticket agent
must indicate that the item is prohibited under the fare category and
display the penalty, if applicable, for carrying on or checking the
item.
(3) If the carrier does not display any fee for a first or second
checked or carry-on bag at the time the consumer searches for and
purchases air transportation, the carrier may not impose a fee on the
consumer for a checked or carry-on bag following the ticket purchase.
If a ticket agent does not display any fee for a checked or carry-on
bag at the time the consumer searches for and purchases air
transportation, the ticket agent must promptly refund the consumer for
any bag fee the carrier imposes on the consumer for the itinerary.
(4) In displaying the applicable bag fee required by this paragraph
(b), each U.S. carrier, foreign air carrier, or ticket agent, must
display the weight and dimension limitations that the carrier imposes
for each checked bag and carry-on bag. Such limitation information may
be displayed using links or pop-ups adjacent to the display of the bag
fee. For passenger-specific itinerary searches, the weight and
dimension limitations must be adjusted to the level applicable to the
passenger based on the passenger-specific information provided.
(5) If a carrier or ticket agent offers for sale an ancillary
service package that includes baggage, it may display the package and
the package price in addition to the standalone bag fees, if any,
already required under paragraph (b)(1) of this section.
(6) For air-tour packages sold online by ticket agents where the
carrier
[[Page 63737]]
providing air transportation is not known at the time of booking,
ticket agents are not required to provide specific baggage fee
information as required by this paragraph (b). In such cases, the
ticket agent must clearly and prominently disclose on the first screen
in which the ticket agent offers a package fare quotation for a
specific itinerary selected by a consumer that additional airline fees
for baggage may apply and that those fees may be reduced or waived
based on the passenger's frequent flyer status, method of payment, or
other consumer characteristic. Once the carrier providing air
transportation for an air-tour package is known, the ticket agent must
provide baggage fee information as prescribed by this paragraph (b)
both to prospective consumers and to consumers who purchased the air-
tour package before the identity of the carrier providing the air
transportation became known.
(c) Online disclosure of cancellation and change fees. Each U.S.
carrier, foreign air carrier, and ticket agent that has a website
marketed to U.S. consumers where it advertises or sells air
transportation must accurately display, on the first page when a
consumer conducts a search for air transportation and fare and schedule
information is shown, the applicable fee for the consumer to change the
reservation and cancel the reservation. Display of the cancellation and
change fee by links or rollovers is not permitted. The fee displayed
must be specific to each fare category displayed and adjusted based on
passenger-specific information provided by the consumer. The carrier or
ticket agent must also display the following information, which may be
with the use of links or pop-ups adjacent to the pertinent fee:
(1) A summary of the applicable cancellation policy for the
itinerary displayed, adjusted based on the consumer's passenger-
specific and itinerary-specific information provided, if applicable;
and
(2) A summary of the applicable ticket change policy for the
itinerary displayed, adjusted based on the consumer's passenger-
specific and itinerary-specific information provided, if applicable.
(d) Online disclosure of 24-hour change and cancellation policy.
Each U.S. carrier, foreign air carrier, and ticket agent that has a
website marketed to U.S. consumers where it sells air transportation
must display a statement, before the consumer can execute his or her
purchase or reservation of air transportation, indicating whether the
consumer's booking can be cancelled without penalty within 24 hours of
booking, or whether the consumer has the option to hold the reservation
for 24 hours at the quoted price without executing the purchase,
consistent with the carrier or ticket agent's policy and, for carriers,
consistent with 14 CFR 259.5(b)(4).
(e) Online disclosure and transactability of family seating fee.
Each U.S. carrier, foreign air carrier, and ticket agent that has a
website marketed to U.S. consumers where it advertises or sells air
transportation must disclose to each consumer seeking to purchase air
transportation in which at least one passenger is 13 years of age or
under, wherever fare and schedule information is provided, the fee, if
any, for the passenger age 13 years or under to be seated adjacent to
the seat of an accompanying adult in the same class of service. This
fee must be displayed alongside the quoted fare associated with each
itinerary search result. Display of the family seating fee by links or
rollovers is not permitted. Each U.S. carrier, foreign air carrier, and
ticket agent that has a website marketed to U.S. consumers where it
sells air transportation must also enable the consumer to select and
purchase the seat at the time the seat fee is disclosed if the consumer
chooses to do so.
(f) Disclosures for tickets not purchased online. For tickets
purchased by consumers in the United States in person or by phone, each
U.S. carrier, foreign carrier, and ticket agent must disclose to
consumers the baggage fees, change fees, cancellation fees, and family
seating fees (i.e., the fee for a passenger 13 or under to obtain a
seat next to an accompanying adult, if the carrier imposes such a fee
and the consumer's intended booking includes a passenger age 13 or
under) that apply at the time a fare is quoted for an itinerary. The
fees disclosed must be adjusted based on passenger-specific information
provided by the consumer.
(g) Changes in baggage fees. If a U.S. or foreign air carrier has a
website marketed to U.S. consumers where it advertises or sells air
transportation, the carrier must promptly and prominently disclose any
increase in its fee for carry-on or first and second checked bags and
any change in the first and second checked bags or carry-on allowance
for a passenger on the homepage of that website (e.g., provide a link
that says ``changed bag rules'' or similarly descriptive language and
takes the consumer from the homepage directly to a pop-up or a place on
another web page that details the change in baggage allowance or fees
and the effective dates of such changes). Such notice must remain on
the homepage for at least three months after the change becomes
effective.
(h) Disclosures of baggage fees on e-ticket confirmations. A U.S.
carrier, a foreign air carrier, an agent of either, or a ticket agent
that advertises or sells air transportation in the United States, must
include information regarding the passenger's free baggage allowance
and/or the applicable fee for a carry-on bag and the first and second
checked bag on all e-ticket confirmations for air transportation
within, to or from the United States. The requirement in this paragraph
(h) applies to all tickets sold on a website marketed to U.S. consumers
where the carrier or agent advertises or sells such air transportation,
including the summary page at the completion of an online purchase and
a post-purchase email confirmation.
(1) Carriers must provide this information in the e-ticket
confirmation. Ticket agents may provide this information in text form
in the e-ticket confirmations or through a hyperlink to the specific
location on airline websites or their own website where this
information is displayed.
(2) The fee information provided for a carry-on bag and the first
and second checked bag must be expressed as specific charges taking
into account any passenger-specific factors that affect those charges.
(i) Website disclosure of all ancillary service fees. If a U.S. or
foreign air carrier has a website marketed to U.S. consumers where it
advertises or sells air transportation, the carrier must prominently
disclose on its website information on ancillary service fees available
to a passenger purchasing air transportation. Such disclosure must be
clear, with a conspicuous link from the carrier's homepage directly to
a page or a place on a page where all such ancillary services and
related fees are disclosed. In general, fees for particular services
may be expressed as a range; however, baggage fees must be expressed as
specific charges taking into account any factors (e.g., frequent flyer
status, early purchase) that affect those charges.
(j) Fee information distribution to ticket agents. (1) For air
transportation within, to, or from the United States, each U.S. and
foreign air carrier that provides fare, schedule, and availability
information to ticket agents to sell or display the carrier's flights
directly to consumers, must provide such ticket agents useable,
current, and accurate information of the fee rules for a first checked
bag, a second checked bag, one
[[Page 63738]]
carry-on bag, canceling a reservation, and changing a reservation. The
information provided by the carrier must be sufficient to enable the
ticket agent to comply with the baggage disclosure requirements in
paragraph (b) of this section and the change and cancellation
disclosure requirements in paragraph (c) of this section. Carriers have
no obligation to ensure that these fees are transactable by ticket
agents; and
(2) For air transportation within, to, or from the United States,
each U.S. and foreign air carrier that provides fare, schedule, and
availability information to ticket agents to sell or display the
carrier's flights directly to consumers must provide such ticket agents
useable, current, and accurate information of the fee rules for
aircraft seats if the carrier charges a fee for a child, who is age 13
or under on the date an applicable flight is scheduled to occur, to be
seated in a seat adjacent to the seat of an accompanying adult. The
aircraft seat fee information must be detailed enough to enable the
ticket agent to disclose the applicable fees for adjacent seats for
each flight in the itinerary of a child, who is age 13 or under on the
date an applicable flight is scheduled to occur, as set forth in
paragraph (e) of this section. Carriers must ensure that seat fees are
transactable by ticket agents.
(k) Unfair and Deceptive Practice. The Department considers the
failure to provide and adhere to the disclosures required by this
section to be an unfair and deceptive practice within the meaning of 49
U.S.C. 41712. The Department also considers the practice of collecting
a fee from consumers for critical ancillary services (i.e., first and
second checked bags, one carry-on item, canceling or changing a
reservation, adjacent seats when traveling with a child who is 13 years
of age or under) without disclosure of this fee when fare and schedule
information is provided to be an unfair and deceptive practice in
violation of 49 U.S.C. 41712. Any fee that has been collected from
consumers for critical ancillary services must be refunded to consumers
by the seller of the air transportation if disclosures required by this
section were not provided.
0
5. Revise Sec. 399.88(a) to read as follows:
Sec. 399.88 Prohibition on post-purchase price increase.
(a) It is an unfair and deceptive practice within the meaning of 49
U.S.C. 41712 for any seller of scheduled air transportation within, to
or from the United States, or of a tour (i.e., a combination of air
transportation and ground or cruise accommodations), or tour component
(e.g., a hotel stay) that includes scheduled air transportation within,
to or from the United States, to increase the ticket price of that air
transportation, tour or tour component or to apply revised price rules
for a first checked bag, a second checked bag, and one carry-on bag to
a consumer, after the air transportation has been purchased by the
consumer, except in the case of an increase in a government-imposed tax
or fee. A purchase is deemed to have occurred when the full amount
agreed upon has been paid by the consumer.
* * * * *
[FR Doc. 2022-22214 Filed 10-19-22; 8:45 am]
BILLING CODE 4910-9X-P
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</html>Indexed from Federal Register on October 20, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.