U.S. Supreme Court will not hear airline appeal over ad rule

WASHINGTON, April 1(Reuters) - The U.S. Supreme Court on Monday declined to weigh a federal government rule that requires airlines to advertise the full cost of tickets.

Allegiant Travel Co, Southwest Airlines Co and Spirit Airlines Inc had all challenged the U.S. Department of Transportation's regulation, which prohibits airlines from leaving taxes and government fees out of their advertised rates.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit upheld the rule in July on a 2-1 vote.

The airlines say the regulation infringes upon their free speech rights.

It requires that any price shown in an advertisement must be "the entire price to be paid by the customer," the Department of Transportation said.

Airlines can give a separate breakdown of taxes and other costs, but it must be in a smaller size than the total cost and not "displayed prominently," the agency said.

The airlines' lawyer, Paul Clement, said in court papers that the Obama administration introduced the rule at a time when it was calling for "new, higher taxes on airline passengers."

He noted that some airlines had explicitly criticized the taxes in their advertisements.

In seeking the high court's review, the airlines also said the federal government was seeking to assert authority in contravention of the 1978 law that deregulated the industry.

The Obama administration said in court papers that it could issue the rule under its authority to ban unfair or deceptive practices.

The rule "constitutes a reasonable exercise of the department's longstanding authority to prevent consumer confusion in airfare advertising," Solicitor General Donald Verrilli wrote.

The case is Spirit Airlines v. Department of Transportation, U.S. Supreme Court, No. 12-656.