Biden administration cracks down on junk fees in air travel

The Biden administration finalized rules Wednesday requiring airlines to automatically refund passengers for canceled or significantly delayed flights and to share baggage, change, or cancellation fees upfront.

“Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them – without having to ask,” Transportation Secretary Pete Buttigieg said in a statement. 

“Today’s announcements will require airlines to both provide passengers better information about costs before ticket purchase, and promptly provide cash refunds to passengers when they are owed — not only saving passengers time and money, but also preventing headaches,” he continued. 

Under the first of two rules issued by the Department of Transportation on Wednesday, airlines must provide fliers with full, automatic refunds if their flight is canceled or delayed by more than three hours domestically and six hours internationally. 

Airlines are also required to refund passengers for other significant changes to their flights — such as changes in departure or arrival airport or increases in the number of connections — as well as significant delays in baggage return.

The second rule requires airlines to disclose extra fees — including fees for checked bags, carry-on bags, and changing or canceling reservations — the first time that fare and schedule information is provided to customers.

Airlines also must explain these fees before passengers make their final purchase, and this fee information must be provided to third parties.

“Airlines should compete with one another to secure passengers’ business—not to see who can charge the most in surprise fees,” Buttigieg added. “DOT’s new rule will save passengers over half a billion dollars a year in unnecessary or unexpected fees by holding airlines accountable for being transparent with their customers.”

The crackdown on airlines is part of a larger push by the Biden administration to rein in so-called “junk fees.”

In March, the Consumer Financial Protection Bureau finalized a rule that capped credit card late fees at $8. The same month, the Federal Communications Commission adopted a rule requiring cable and satellite television providers to clearly display their “all-in” pricing. 

The “junk fees” push comes as President Biden attempts to sell Americans on his economic agenda ahead of November’s election. Many Americans have maintained largely negative views on the economy despite easing inflation and a booming job market.