U.S. suspends Obama airline transparency review

[March 04, 2017]  By David Shepardson

WASHINGTON (Reuters) - The Trump administration said on Friday it is suspending action on an Obama administration decision in October to probe a long-time practice by some airlines of preventing various travel websites from showing their fares and whether to require transparency in airline baggage and other fees.

The U.S. Transportation Department said in a notice Friday it is suspending a public comment period on the review of the practices to "allow the president’s appointees the opportunity to review and consider this action."

Airlines generated $3.8 billion in baggage fees in 2015 and the Obama administration said in October it was formally exploring requiring airlines and ticket agents to provide consumers with prices that include service fees for baggage and other services alongside fares at points of sale.

Separately, the Trump administration is also extending the compliance date for a new regulation requiring reporting of data for mishandled baggage and wheelchairs in aircraft cargo compartments for one year - until Jan. 1, 2019.

Airlines for America, the industry trade group representing American Airlines Group Inc <AAL.O>, United Continental Holdings Inc <UAL.N>, Southwest Airlines Co <LUV.N> and others, praised the decision.

"Today’s action is a common sense measure reinforcing that the airline industry is capable of making the decisions that best serve our customers, our employees and the

communities we serve," the airlines' group chief executive Nicholas Calio said in a statement.

The group added the "airline industry operates under 13,000 regulations across 13 agencies, many of which are outdated, obsolete and in need of reform."

President Donald Trump met with airline chief executives last month and asked them to identify regulatory hurdles preventing job growth in the industry.

A plane prepares to land over a cyclist during unseasonably warm weather at Reagan National Airport in Washington, U.S., February 22, 2017. REUTERS/Joshua Roberts

A study commissioned by a travel agencies' trade group, the Travel Technology Association, in 2014 found that restricting the ability to comparison-shop would result in ticket prices increasing more than 11 percent.

Airline shares rose on the news.

JPMorgan said in a research note Friday that the "the protections never mattered in the first place - the financial impact of the Obama protections was largely irrelevant, in our view."

The Obama administration efforts were very modest, JPMorgan said, and did not propose limiting airlines’ ability to pursue ancillary revenue, such as an outright ban on bag fees.

But JPMorgan added: "U.S. airlines appear to increasingly have the ear of a sympathetic, regulatory-averse administration."

(Reporting by David Shepardson; Editing by Bernard Orr)

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