Appeals Court Vacates Airline Fee Disclosure Rule

Fifth Circuit Court rules USDOT lacked authority to require upfront baggage and ancillary fee disclosures.

Feb. 3, 2026 at 4:23pm

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A federal appeals court has vacated a U.S. Department of Transportation (USDOT) rule that required airlines to disclose baggage and other ancillary fees upfront during the flight booking process. The Fifth Circuit Court of Appeals ruled that the USDOT lacked the authority under federal law to issue such a consumer-friendly regulation, siding with major airlines that had challenged the rule.

Why it matters

The appeals court decision is a setback for airline passengers who had hoped the rule would provide more transparency and prevent unexpected fees. Airlines have long resisted disclosing fees upfront, arguing it would "upend the way airlines interact with their customers." The ruling allows airlines to continue their current practice of revealing fees later in the booking process, which can lead to consumers overpaying for services.

The details

In 2024, the USDOT issued regulations requiring airlines and ticket agents to disclose service fees alongside airfares to help consumers avoid unexpected charges. The agency said consumers were overpaying $543 million annually due to hidden fees. However, the airline industry challenged the rule, arguing the USDOT lacked the legal authority to issue such a regulation. The Fifth Circuit Court agreed, vacating the rule and reversing a previous decision that had sent it back to the USDOT for review.

  • The USDOT issued the fee disclosure rule in April 2024.
  • In January 2025, a three-judge panel of the Fifth Circuit Court sent the rule back to the USDOT but blocked its enforcement.
  • On February 3, 2026, the full Fifth Circuit Court vacated the rule and reversed the previous decision.

The players

U.S. Department of Transportation (USDOT)

The federal agency that issued the regulation requiring airlines to disclose baggage and ancillary fees upfront during flight booking.

American Airlines, United Airlines, Delta Air Lines, JetBlue, and Alaska Airlines

Major U.S. airlines that challenged the USDOT's fee disclosure rule, arguing the agency lacked the authority to issue such a regulation.

Airlines for America

The trade group representing major U.S. airlines that joined the legal challenge against the USDOT's fee disclosure rule.

International Air Transport Association (IATA)

The global trade association for the airline industry that also joined the legal challenge against the USDOT's fee disclosure rule.

Fifth Circuit Court of Appeals

The federal appeals court that vacated the USDOT's airline fee disclosure rule and reversed a previous decision that had sent it back to the agency for review.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee (Instagram)

The takeaway

The appeals court decision is a win for airlines, who can continue their current practice of revealing fees later in the booking process, but a setback for consumers who had hoped for more transparency around airline fees. The ruling raises questions about the USDOT's authority to issue consumer protection regulations in the airline industry.