WASHINGTON —
The government can require airlines to show consumers a total ticket price that includes taxes and fees in print and online ads, the U.S. Court of Appeals said Tuesday, rejecting an industry challenge to a series of consumer protection regulations.
The Department of Transportation, which issued the regulations last year, has the authority to regulate “unfair and deceptive” airline industry practices, the three-member panel said in its ruling.
The ruling also covers two other regulations: A requirement that airlines allow consumers who purchase tickets more than a week in advance the option of canceling their reservations without penalty within 24 hours after purchase, and a ban on airlines increasing the price of tickets or baggage fees after tickets have been bought.
The rules had been challenged by Spirit and Southwest airlines, with the support of two major airline industry trade associations.
Prior to the new regulations, airlines could advertise a base airfare and separately disclose taxes and fees, which consumers would have to add together to arrive at a total price. Under the new regulations, airlines can still breakdown the price of a ticket to show taxes and fees, but the total price must be displayed in the largest type size and be the most prominent price in the ad or on the web page.
The airlines argued that there was nothing deceptive about listing taxes separately, which they said is the general norm in the U.S. economy.
But Judge David Tatel, who was appointed by President Bill Clinton, wrote in the decision that there’s nothing in the regulations that would force airlines to hide the taxes. As an example, he pointed to Spirit’s website, where taxes are clearly displayed under the heading: “The government’s cut.”
Judge Raymond Randolph agreed the transportation department has the authority to require the ads display a total ticket price, but wrote in a dissent that he disagreed with the portion of the regulation that requires a larger typeface be used for the total price than for taxes and fees. He said the regulation restricts the airlines’ political speech. Randolph and the third judge on the panel, Karen Henderson, were appointed by President George H.W. Bush.
Officials for Southwest and Spirit said the two airlines are already complying with the regulations.
“While we’re disappointed in the court’s decision, it really doesn’t further impact us,” said Brad Hawkins, a Southwest spokesman.
Misty Pinion, a Spirit spokeswoman, warned: “American consumers are going to pay more for air travel and have less choice, as the (transportation department) continues to pile costly new rules onto an already over-regulated and over-taxed industry.”
Jean Medina of the trade association Airlines for America said: “We continue to believe that this rule enables the government to effectively hide the ball regarding how high airfare taxes are.”
Kevin Mitchell, chairman of the Business Travelers Coalition, which represents corporate travel managers, said the decision is “really good news for consumers” since it reaffirms the Transportation Department’s authority to regulate the airline industry.
“Were it not for the Transportation Department, (airline) consumers would have no protections whatsoever — it would be consumer protection no man’s land,” Mitchell said.
Under President Barack Obama the department has issued a series of consumer regulations aimed at protecting airline passengers, including placing a three-hour limit on the length of time airlines can keep passengers waiting on airport tarmacs before giving them the option of leaving the plane. Another wave of regulations, scheduled for November, is expected to address whether airlines should be required to provide the global distribution systems used by travel agents with all their ticket price and fee information.
Consumers haven’t been able to effectively comparison shop airline ticket prices since 2008, when airlines began charging fees for a wide range of services previously included ticket prices, Mitchell said.
Business
Airline bid to block consumer protections rejected
- Business
-
-
Stock market falls as traders fear stimulus cuts
Stocks are falling after the Federal Reserve gave a slightly more optimistic outlook for the U.S. economy, which investors took as a hint that the bank was nearer to a decision to reduce its economic stimulus program.
-
Top UK court overturns sanctions on Iranian bank
Britain’s Supreme Court quashed sanctions against an Iranian bank penalized over its alleged links to Iran’s nuclear weapons program, saying Wednesday that Bank Mellat had been arbitrarily singled out.
-
Netflix to expand to Netherlands later this year
Netflix is going Dutch.
-
World Bank highlights climate-poverty link
The World Bank says it will increasingly view its efforts to help developing countries fight poverty through a “climate lens.”
-
Japan formally OKs new nuke safety requirements
Japan’s nuclear watchdog formally approved a set of new safety requirements for atomic power plants Wednesday, paving the way for the reopening of facilities shut down since the Fukushima disaster in a move critics charge is too hasty.
-
World Food Prize goes to 3 biotech scientists
The World Food Prize Foundation on Wednesday took the bold step of awarding this year’s prize to three pioneers of plant biotechnology whose work brought the world genetically modified crops.
-
Investors look for answers on economy from Fed
Worry and speculation have consumed investors since Chairman Ben Bernanke spoke to Congress last month about the Federal Reserve’s drive to keep long-term interest rates at record lows.
-
Dish won’t submit revised bid for Sprint
Satellite TV operator Dish Network Corp. said Tuesday it would not submit a revised bid for Sprint, leaving the path open for the wireless carrier to accept what it already considers a superior offer from Japan’s Softbank.
-
West Virginia mine safety lab creates disasters to train
Orange flames lick at the roof of the coal mine, heat building and visibility dropping as smoke begins to fill the underground passageway.
-
Stocks edge lower as investors wait on Fed
Stocks edged lower in early trading on Wall Street Wednesday as investors waited for word from the Federal Reserve.
- More Business Headlines
-



