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This rulemaking would amend DOT's aviation consumer protection regulations to ensure that consumers have ancillary fee information, including "baggage fees," "change fees," "cancellation fees," and seat fees that impact families traveling with children at the time of ticket purchase. This rulemaking would also examine whether fees for certain ancillary services should be disclosed at the first point in a search process where a fare is listed. This rulemaking implements section 5, paragraph (m)(i)(F) of Executive Order 14036 on Promoting Competition in the American Economy, which directs the Department to better protect consumers and improve competition.

Statement of Need:

This rulemaking proposes that consumers have ancillary fee information, including "baggage fees," "change fees," and "cancellation fees," at the time of ticket purchase.

Summary of the Legal Basis:

49 U.S.C. 41712; 14 CFR part 399, Executive Order 14036

Alternatives:

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Anticipated Costs and Benefits:

The rule would yield societal benefits if it reduced deadweight loss from inaccurate price calculations or reduced search costs. Inaccurate price calculations lead to over consumption 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 rule could lead to crowding out of other relevant information for some consumers. The potential effect represents an offset to benefits, and it is possible that it equals or outweighs the benefits.

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 (GDS) 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.

Risks:

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