US Supreme Court declines to review airfare advertising rule

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The US Supreme Court will not review an appeal court's 2012 decision to uphold Department of Transportation (DOT) regulations requiring that airfare advertisements include all government imposed taxes and fees.

The Supreme Court's decision, made 1 April, comes in response to a "petition for a writ of certiorari" filed in November 2012 by low-cost carriers Spirit Airlines, Allegiant Airlines and Southwest Airlines, which had argued the new regulations violate free speech protections and obscure the amount of government taxes and fees.

The petition asked the Supreme Court to review the July 2012 decision by the US appeals court in the District of Columbia to uphold the DOT's "airfare advertising rule," as well as the "24h rule," both of which took effect in January 2012.

"We are disappointed and disagree with the decision," Spirit Airlines told Flightglobal in an email. "American consumers are going to pay more for air travel, and have less choice, as the government continues to pile costly new rules onto an already over-regulated and over-taxed industry."

Spirit adds that the regulations will stifle economic growth and hinder job creation.

Allegiant Airlines and Southwest Airlines did not immediately respond to a request for comment.

The advertising rule requires airlines' and ticket agents' advertisements to display the total price of airfares, including taxes and fees, and prohibits advertisements from displaying the base airfare as prominently as the total amount a consumer will pay.

The 24h rule requires airlines to allow customers to hold a reservation for 24h or allow them to cancel a reservation within 24h of booking without a penalty. The 24h rule applies only to reservations made one week or more prior to departure.

In response to the petition, the DOT released a brief arguing that the regulations are within its authority to prohibit unfair of deceptive advertising practices in the airline industry.

The agency says the potential for airline customers to be confused by advertising is "particularly great" because taxes and fees can constitute a high percentage of the overall cost of air travel.

The DOT says it considers prices to be unfair or deceptive if they do not state the entire price to be paid by the consumer.

"This regulation was a reasonable exercise of the agency's authority and imposes little or no burden on airlines' ability to communicate truthful information," the DOT wrote. "The airfare advertising rule constitutes a reasonable exercise of the department's long-standing authority to prevent consumer confusion in airfare advertising and is fully consistent with the First Amendment."

The low-cost airlines that filed the petition had argued that the regulations violated First Amendment protections of free speech. They asked the Supreme Court to consider if the DOT exceeded its statutory mandate and acted "arbitrarily and capriciously by re-regulating" an industry that Congress chose to deregulate.

The airlines said the regulations require them to "hide the tax burden" imposed on air travel by the federal government.

The regulations had support from consumer advocates and groups like American Society of Travel Agents.