Recent And Future Changes To Airfare And Package Tour Price Advertising Regulations

Airfare and Air Tour Package Advertising

The Department of Transportation (DOT) has announced that it will amend its "Full Fare" advertising rule. The proposal will be included in a Notice of Proposed Rulemaking (NPRM) anticipated to be published in December 2025titled Enhancing Flexibility of Air Fare Price Advertising NPRM.  Although DOT's announcement did not provide specifics regarding what it will propose, it stated that the rule would be amended "to allow airlines and ticket agents greater flexibility in how they advertise air fares." The currently effective rule requires any advertised fare to include all mandatory fees and taxes. It also prohibits the display of any fare components, including government-imposed fees and taxes, to be more prominent than, or in a font size larger than or equal to, the total fare to be paid by a consumer.

In addition, DOT's rules require that when advertising the price of an airfare package, or tour, the entire package cost must be displayed, including government-imposed fees and taxes. This includes package tour components such as hotel stays. DOT's current Full Fare advertising rule is contrary to the advertising practices of most products and services, including travel services offered without airfare, such as hotel stays. Until recently, DOT's price advertising rule for hotel stays that are a component of an air-inclusive tour was the only federal government regulation on hotel price advertising.

Hotel and other Short Term Stay Advertising

However, in December 2024, the Federal Trade Commission (FTC) published its Trade Regulation Rule on Unfair or Deceptive Fees, which applies specifically to hotel stays.¹FTC's rule, which it promoted as its "Junk Fees" rule, makes it a violation for any business to "offer, display, or advertise any price" for short term lodging such as a hotel, "without clearly and conspicuously disclosing the total price." Like DOT's rule, the FTC rule requires disclosure of the total price more prominently than any other pricing information. However, there is a significant distinction between the FTC and DOT rules. Unlike DOT's rule, the FTC rule allows businesses to exclude government charges from the advertised price.²

Dual Compliance

This inconsistency is directly addressed by FTC in the preamble to the final rule. The FTC notes that while DOT's Full Fare rule requires that government taxes and fees be included in the total price of airfare and hotel packages, FTC's rule only "permits businesses to exclude government charges from the total price, it does not require them to do so." Accordingly, businesses can comply with both rules by including government charges in advertised prices, at least when hotel stays are combined with airfare in a package.

Future Consistency?

In view of DOT's announcement that it will amend the full fare rule, and the disparate treatment of government taxes and fees between DOT and FTC's rules, DOT may propose changing the full fare rule to allow airfares to be advertised without government-imposed fees and taxes, as some airlines have requested. It is also possible that the proposal will instead eliminate the prohibition on stating government taxes and fees more prominently or in the same or larger font than the total price. In fact, DOT has stated that the rule would "eliminate overly prescriptive requirements which prevent airlines from highlighting government taxes on air transportation."

Eliminating restrictions on prominence and font size would address the problem that airlines encounter when attempting to "highlight" that part of the total amount consumers pay goes directly to the government. However, given the current Administration's policy of deregulation, it seems more likely that DOT will propose eliminating the requirement to include government-imposed fees and taxes in advertised airfares and air and hotel packages.

The Steptoe Aviation team will be monitoring this and other DOT rulemakings and will provide future updates. If you have any questions about DOT or FTC's advertising rules, we stand ready to assist.

Footnotes

1. The Trade Regulation Rule on Unfair or Deceptive Fees applies to all live-event ticket sales and short-term lodging.

2. Sellers must disclose the final price to be paid, including any government charges, before payment and must display the final price "more prominently, or as prominently as," the price without government charges.

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