Allegiant, Spirit sue DOT over consumer protection rules
Two discount airlines, Allegiant and Spirit, have gone to court to block some provisions of the Transportation Department's new batch of consumer protection rules, including the rule imposing a 24-hour grace period, during which travelers could hold reservations without payment or cancel without penalty, up to one week before departure.
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The two carriers also challenged the DOT's decision to reverse its long-standing policy on price advertising to require that all taxes, fees and mandatory service charges, whether imposed by governments, carriers or intermediaries, be included in the advertised price. This rule change is slated to take effect in October, but other aspects of the rules are effective in August. U.S. and foreign airlines have asked the DOT for more time to comply.
Spirit and Allegiant filed their actions separately in the U.S. Court of Appeals for the D.C. Circuit. The two cases have already been consolidated, but procedural dates for legal briefs and oral argument have not been established.
In addition to the refund and price advertising rules, the two airlines challenged a rule that lays down specific requirements for the disclosure of ancillary fees on websites and in e-ticket confirmations, plus a provision that will prohibit airlines from raising the price of air travel, or the component of any part of a package, after the consumer's purchase.
Spirit specifically noted that this rule could prohibit future price increases for ancillary or "nonticket" services that the consumer has not yet purchased.
Spirit also challenged a portion of the rules specifying how and when airlines must notify passengers about cancellations and delays.
In this stage of the appeal process, the parties do not normally provide elaborate explanations for their positions, but Allegiant said in its petition to the court that the DOT lacks the statutory authority to dictate airline refund policies, and has adopted rules that "prohibit truthful speech in violation of the First Amendment." The DOT's actions, it said, amount to "indirect regulation of the pricing of air travel and related services ... contrary to the letter and spirit of the Airline Deregulation Act."
The airline further stated that several of the DOT's conclusions regarding what is unfair or deceptive "are not fairly supported by reliable evidence."
Spirit said in a statement that it acted "to resist efforts by regulators that go beyond reasonable consumer protections to impose higher costs on airlines without corresponding benefits to the traveling public."