WASHINGTON, April 23 (Reuters) - The U.S. Transportation

Department is finalizing on Tuesday new rules that require

upfront disclosure of airline fees and mandate refunds for

delayed baggage or inoperative services like onboard Wi-Fi.

The rules, which were nearly three years in the works, will

require airlines and ticket agents to tell consumers upfront

about baggage or change and cancellation fees. The department

said consumers are expected to save $543 million annually in

excess airline fees.

The new rules require airlines and ticket agents to disclose

extra service fees alongside the full fare, the first time fare

and schedule information is displayed online.

The government will also require airlines to refund baggage

fees if bags are not delivered within 12 hours of domestic

flights arriving or 15 to 30 hours of their international flight

arrivals, as well as for services that do not work or are not

provided. Airlines must promptly and automatically issue refunds

if flights are canceled.

"Airlines should compete with one another to secure

passengers' business-not to see who can charge the most in

surprise fees," said U.S. Transportation Secretary Pete

Buttigieg.

Airlines for America, a trade group representing major

carriers, said airlines "offer transparency and vast choice to

consumers from first search to touchdown. U.S. airlines are

committed to providing the highest quality of service, which

includes clarity regarding prices, fees and ticket terms."

In May, President Joe Biden said USDOT was writing new rules

to require airlines to compensate passengers with cash for

significant flight delays or cancellations when the carriers are

responsible. But almost a year later, USDOT has still not issued

a formal proposal.

Airlines will be required to explain fee policies before

ticket purchases and share fee pricing and policies with other

companies that display fares.

Under the new rules, airlines will be required to tell

consumers seats are guaranteed and passengers need not pay seat

selection fees. Carriers are prohibited from advertising

promotional discounts that do not include mandatory

carrier-imposed fees.

Last month, a U.S. Senate Committee said it was stepping up

its investigation into billions of dollars in yearly airline

fees, noting between 2018 and 2022, total revenue across major

U.S. airlines from baggage fees increased from $4.9 billion to

$6.8 billion.