Spirit Airlines gets in DOT’s face over new air fare display rules
Sen. Boxer doesn’t like the airline’s latest ploy, either
The debate over the U.S. Transportation Department’s new raft of regulations governing how airlines sell their tickets took a turn for the zany when Spirit Airlines imposed an “unintended consequences” fee of $2 per one-way trip per passenger.
Spirit said the fee was necessary to cover the costs that airlines will incur by adhering to a new rule requiring airlines to hold fares for 24 hours after booking without penalty.
This rule requires airlines to take out seat inventory “for those who may or may not decide to pay for it,” Spirit said. “This prevents us from selling these seats to someone who definitively wants to book their reservation and leads to seats not being filled.”
Therefore, Spirit must “spread costs over fewer customers, thus raising the cost for all passengers.”
Spirit’s antics don’t stop there: The carrier takes a jab at another new regulation when a customer performs a flight search, delivering the results with a large “WARNING: New government regulations require us to HIDE taxes in your fares.” It also sent an e-mail to its customers expressing the same sentiments.
But Spirit’s claim is not true, as Kevin Mitchell, chairman of the Business Travel Coalition, points out. Mitchell, who lobbied hard in favor of new consumer-protection rules, notes that carriers are required to display the total fare, including all mandatory taxes and fees, up front. But they are free to break the fare down if they choose so long as the base fare isn’t displayed more prominently than the total fare
Spirit’s ploy got Sen. Barbara Boxer (D-Calif.) fired up. She sent a letter to Ben Baldanza, the airline’s chief executive officer, saying she was “shocked by the failure of your airline to tell the truth” and urging him to set the record straight with his customers.
Baldanza, who seems to aspire to being the U.S. airline industry’s answer to Ryanair’s Michael O’Leary, hasn’t complied.
There are valid arguments on both sides. The airlines rightly point out that sellers of sweaters, refrigerators or lawn seed aren’t required to post the total price, including taxes.
But, as is often the case, the airlines did themselves no favors in the run-up to the new rules. They advertised ridiculously low fares to Europe, for example, then attached ridiculously high, often unexplained, surcharges that effectively tripled the fare. Macy’s doesn’t do that when it sells sweaters.
And Spirit itself came up with the mother of all fees: the “passenger usage fee.” You buy your ticket. Then you pay to use it.
Read about Sabre’s new defense in US Airways’ antitrust lawsuit in the Jan. 7 issue of TTU.
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