United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED January 28, 2025 No. 24-60231 Lyle W. Cayce ____________ Clerk Airlines for America; Alaska Airlines, Incorporated; American Airlines, Incorporated; Delta Air Lines, Incorporated; Hawaiian Airlines, Incorporated; Jetblue Airways Corporation; United Airlines, Incorporated; National Air Carrier Association; International Air Transport Association,

Petitioners,

versus Department of Transportation,

Respondent,

consolidated with _____________

No. 24-60373 _____________ Spirit Airlines, Incorporated,

Petitioner,

versus United States Department of Transportation,

Respondent. Case: 24-60231 Document: 173-1 Page: 2 Date Filed: 01/28/2025

______________________________

Petitions for Review from an order of the Department of Transportation Agency No. 89 Fed. Reg. 34620 ______________________________ Before Southwick, Haynes, and Douglas, Circuit Judges. Haynes, Circuit Judge: In 2024, the Department of Transportation (“DOT”) issued a final rule under 49 U.S.C. § 41712(a) requiring airlines to disclose certain fees upfront when potential customers search for itineraries. See Enhancing Transparency of Airline Ancillary Service Fees [hereinafter “Rule”], 89 Fed. Reg. 34620 (Apr. 30, 2024). Two groups of airlines now challenge the Rule as unauthorized by Congress and unlawful under the Administrative Procedure Act (“APA”). We hold that DOT has authority to make rules under § 41712(a). However, we ultimately REMAND this particular Rule, as DOT failed to fully comply with the requirements of the APA. I. Background A. Legislative Background Under the Federal Aviation Act of 1958, the Civil Aeronautics Board regulated the interstate airline industry. Nw., Inc. v. Ginsberg, 572 U.S. 273, 279–80 (2014). “Pursuant to this authority, the Board closely regulated air carriers, controlling, among other things, routes, rates, and services.” Id. at 280. The Board also had authority “to take administrative action against certain deceptive trade practices.” Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378 (1992). Specifically, Congress empowered the Board to “investigate and determine whether any air carrier . . . has been or is engaged in unfair or deceptive practices or unfair methods of competition” and to “order such air carrier . . . to cease and desist from such practices or

2 Case: 24-60231 Document: 173-1 Page: 3 Date Filed: 01/28/2025

No. 24-60231 c/w No. 24-60373 methods” upon finding after “notice and hearing” that the air carrier was engaged in the same. Nader v. Allegheny Airlines, Inc., 426 U.S. 290, 296 n.7 (1976) (quoting § 411 of the Federal Aviation Act, 72 Stat. 769 (formerly codified at 49 U.S.C. § 1381 (1976))). “In 1978, however, Congress enacted the [Airline Deregulation Act (the “Deregulation Act”)], which sought to promote ‘efficiency, innovation, and low prices’ in the airline industry through ‘maximum reliance on co