WASHINGTON, Feb 3 (Reuters) - A federal appeals court on Tuesday agreed to set aside its ruling last year that the U.S. Transportation Department had authority to require airlines to fully disclose fees upfront when passengers book flights.

The 5th U.S. Circuit Court of Appeals in New Orleans in an en banc decision vacated the USDOT rule and reversed a January 2025 decision by a three-judge panel.

Major airlines challenged a consumer-friendly rule issued in April 2024 during the Biden administration, which required airlines and ticket agents to disclose "ancillary fees" such as baggage charges during the booking process arguing federal law gave the Transportation Department no power to issue such rules.

(Reporting by David Shepardson in Washington)

((Email David.Shepardson@thomsonreuters.com 202-579-6093))