Biden moves to crack down on hidden airline fees: 'You should know the full cost'

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On Monday, the Biden administration announced plans to go after airlines and travel websites if they try to slip in fees after you've picked your flight or even after you’ve bought the ticket.

The proposed rule is part of Biden’s overall competition efforts and now will undergo a 60-day review and public comment period before it can be enacted. President Biden touted the efforts to pressure airlines into changing their policies during a White House event on Monday afternoon.

The overall effort — part of Transportation Secretary Pete Buttigieg’s recent promise to make flying less painful — comes as other key issues such as constant flight cancellations and an ongoing pilot shortage elude quick fixes.

"You should know the full cost of your ticket, right when you are comparison shopping to begin with so you can pick the ticket that actually is the best deal for you," Biden said Monday.

US President Joe Biden speaks during the third meeting of the White House Competition Council in the State Dining Room of the White House in Washington, DC, on September 26, 2022. (Photo by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
President Joe Biden speaks during the third meeting of the White House Competition Council in the State Dining Room of the White House on September 26. (Mandel Ngan/AFP via Getty Images) (MANDEL NGAN via Getty Images)

The new rules would apply to extra charges such as baggage fees, change fees, and cancellation fees. They'll also apply to family seating fees that, much to flyers' chagrin, can be tacked onto fares during the last step of the booking process or after the ticket has been purchased — often significantly driving up the price.

‘Help travelers make informed decisions’

Under the proposed rule, customers searching online would see the fees the first time an airfare is displayed and potential fees for extras such as flight changes and baggage would also need to be shown immediately. The new rule would apply to flights inside the US and those that take off or land in the US.

“Airline passengers deserve to know the full, true cost of their flights before they buy a ticket,” Buttigieg said in a statement, adding that the new rules “will help travelers make informed decisions and save money.”

A trade group representing major US air carriers, Airlines for America, told Yahoo Finance in a statement that its airlines are already "committed to providing the highest quality of service, which includes clarity regarding prices, fees and ticket terms.” The statement added: “Passenger carriers provide details regarding the breakdown of airfares on their websites, providing consumers clarity regarding the total cost of a ticket.”

The group represents major airlines American (AAL), United (UAL), Delta (DAL), Southwest (LUV), JetBlue (JBLU), Hawaiian (HA), and Alaska (ALK).

Monday's move is the latest from the Biden administration to try to improve the flying experience, at least on the margins. Recent efforts have included a new "Airline Customer Service Dashboard" as well as dediicating $1 billion to upgrade America’s airport terminals.

U.S. Secretary of Transportation Pete Buttigieg testifies before the House Committee on Transportation and Infrastructure during a hearing on
Secretary of Transportation Pete Buttigieg testifies before Congress in July. (REUTERS/Sarah Silbiger) (Sarah Silbiger / reuters)

'Capitalism without competition isn't capitalism'

Nonetheless, the more deeply rooted problems such as a shortage of pilots and the related wave of cancellations earlier this summer haven’t proven as open to administration solutions.

The Transportation Department is in the midst of a 90-day review process for another new rule around the issue of getting refunds in the event of flight cancellations. The administration is also pursuing enforcement actions against 10 airlines for extreme delays in providing refunds.

On Monday, Biden said his administration's efforts were having an effect. “They cancel on you and you have to pay a fee to rebook. C’mon man,” he said. "It’s simply not fair."

Airlines for America also also said Monday that its members “offer a range of options — including fully refundable fares — to increase accessibility to air travel and to help customers make ticket selections that best fit their needs.”

In a recent Yahoo Finance Live interview, Melius Research Director Conor Cunningham noted that some of the overall pressures on flyers could be easing, while acknowledging delays are still a problem. Still, he added, "Delays are better than cancellations, though obviously not great, but we're moving in the right direction, I guess."

Monday’s announcement came out of the third meeting of Biden’s White House Competition Council, whose members include Buttigieg, Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo, and others. The group has the ambitious mandate of fostering competition across the economy from finance to health care to technology to transportation.

Its efforts were also cast by the White House this week as an effort to also bring down costs in the face of inflation. White House Press Secretary Karine Jean-Pierre said Monday that the average American loses up to $5,000 a year “due to lack of competition.”

During his remarks Thursday, Biden applauded the Transportation Department’s move and said other agencies would soon do the same in their areas of influence pointing to fees from internet providers , banks, and cellphone companies.

"Capitalism without competition isn't capitalism, it's exploitation and we're building an economy that works for everyone," Biden said during his remarks.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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