Spirit Airlines fed up, says government has hidden agenda

Spirit airlinesThis week, Spirit Airlines, mad about new airline disclosure rules, started adding a $4 “unintended consequences of DOT regulations” fee to ticket prices. It’s just the latest in a salvo of complaints by airlines over new fare disclosure rules they feel are unfair.

Spirit Airlines isn’t happy with the new rule requiring airlines to include all taxes and mandatory fees in the quoted airfare price and posted a big “Warning!” sign pop-up on the carrier’s website making that quite clear earlier this week. The pop-up is gone now but the information is still prominently displayed, urging consumers to contact their Congressional Representatives to complain.

In a direct attack on the new rules Spirit says “If the government can hide taxes in your airfares, then they can carry out their hidden agenda and quietly increase their taxes. (Yes, such talks are already underway.)” on their linked web site, keepmyfareslow.org.

Spirit believes that with the total price on display up front, it looks like airlines are raising their prices which could drive away consumers, something a low-cost airline can not afford.

“We’re against these new regulations because we actually think it reduces transparency,” Spirit Airlines CEO Ben Baldanza told Time this week. “We think it makes it harder for consumers to understand what they’re paying for.”

The new regulations of airline marketing also allow passengers to wait as long as 24 hours to pay for a reservation, a huge change from policies airlines have requiring immediate, nonrefundable payment for discount fares.

Here is where they might have a point: its a trade-off of sorts.

Airlines often struggle to fly full planes and need to have them full to make a profit. The airline gives a discount to attract buyers and expects that seat to stay sold in return.

Spirit CEO Ben Baldanza said in a statement that “the new rule takes seats out of circulation, albeit temporarily, limiting the inventory for people willing to pay on the spot. As a result, he said, the airline now has to spread costs over fewer passengers, and add the $4 fee” reported the Las Vegas Review-Journal.

Confusing? Looking at this from a different angle might provide some clarity. This is an issue that cruise lines, exempt from disclosure rules, have begun dealing with recently also.

Traditionally doing what DOT rules are having airlines do just now, travel agents or passengers booking directly could put a courtesy hold on a cruise cabin to lock in the price and availability for a given period of time. That took the cabin out of the available inventory for others to choose from, much like airlines are being forced to do now. Affecting available inventory and pricing even more, huge blocks of cabins on a given sailing could be held out of available inventory for a proposed group sailing, artificially inflating occupancy levels.

On the other end, cruise line cancellation policies were more generous in the past, allowing passengers to book up to a year or more in advance and cancel just before final payment with no penalty. Cancellation charges started on the day final payment was due and increased as the date of sailing came closer, to where if passengers canceled within 7 days of sailing the cancellation penalties would be as much as was paid for the booking. Now, that 100% penalty time is happening farther out from sailing, giving the cruise line more time to sell that cabin to someone else and further discouraging passengers from cancelling.

A good example of what the airlines are talking about can be found in new cruise fare options aimed at reducing those cabins that have been taken out of the available inventory but are not really sold yet.

Carnival Cruise Lines
Early Saver Fare is a good example.

In world of seemingly unlimited deals and offers with pricing all over the board, Carnival guarantees the Early Saver Fare to be the lowest advertised fare and reduces the price if a legitimate lower price is found.

Simple.

In return, the buyer agrees that the deposit is totally non-refundable, few changes can be made to a booking without incurring a $50 per change administrative fee, and standard cancellation penalties apply, much like reduced fare airline tickets were before the disclosure rules set in.

Airlines contend that they are being singled out as other travel products including hotel rooms and cruise vacations that commonly advertise tax-off pricing and are not affected by the rule. They are correct on that point.

Transportation Secretary Ray LaHood does not agree though, calling the regulations common sense in his own return attack.

“This is just another example of the disrespect with which too many airlines treat their passengers,” he said reports the Chicago Tribune.

On the other hand, if how discount air carriers do business keeps them in the air, at low prices, should we complain? Who really ends up losing here?


Bankruptcy for American Airlines


Flickr photo by redlegsfan21

Which airline made the most money on baggage fees?

airline baggage feesLast year, baggage fees were used by airlines to make up for lost fare revenue, as the recession kept people on the ground. This year, it’s just been a great source of extra revenue, as passenger traffic and fares are up – and the fees haven’t gone away. Almost all airlines are getting in on the action, some more egregious than others.

Well, data for the third quarter of 2010 is in, and we can finally take a look at who’s hitting us hardest … and for how much. The numbers will probably shock you. The top baggage fee-grabber owned close to 30 percent of the total baggage fees charged in the United States, a market that has reached $2.6 billion for the first three quarters of the year, and the top five dominate with approximately 80 percent of the total fees charged for bags, according to data from the Department of Transportation.

Let’s take a look at the top five airlines for baggage fee snatching (and then the rest):1. Delta Air Lines, $733 million: in fairness, Delta is the largest airline in the United States, so it’s to be expected that it will generate the most revenue.

2. American Airlines, $431 million: the third-largest airline hits the #2 spot for baggage fees, implying an aptitude for prying open customer wallets yet to be recognized by its competitors.

3. US Airways, $388 million: again, this is an impressive take, as evidenced by the distance between US Airways and Continental, in the #4 spot.

4. Continental Airlines, $258 million: this almost makes the airline look downright reasonable, especially when it’s year-to-date baggage fees aren’t even as substantial as what Delta raked in during the third quarter alone!

5. United Airlines, $239 million:

And, the rest:

6. AirTran Airways: $112 million

7. Alaska Airlines: $81 million

8. Spirit Air Lines: $56 million

9. Frontier Airlines: $44 million

10. JetBlue Airways: $43 million

11. Allegiant Air: $43 million

12. Hawaiian Airlines: $40 million

13. Virgin America: $27 million

14. Southwest Airlines: $23 million

15. Republic Airlines: $18 million

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16. Horizon Air: $13 million

17. Sun Country airlines: $9 million

18. Mesa Airlines: $2 million

19. Continental Micronesia: $2 million

20. USA 3000 Airlines: $2 million

[photo by The Story Lady via Flickr]

New Spirit Airlines promo invites you to check out the “oil on our beaches”

The cheeky ad designers at Spirit Airlines are at it again – after their “Muff Diving”, “DD” and “MILF” promotions, their newest stunt invites you to check out the “oil on our beaches”.

In this case though, the oil does not show the BP spill, but scantily clad women covering themselves in “Best Protection SPF 50″ sun tan lotion.

The promotion is actually not bad
– and offers $50 off a variety of flights ($25 off each way), but as usual you’ll want to pay close attention to the fine print and other details of the promotion.

And of course, this promotion wouldn’t be a Spirit Airlines promotion if it didn’t create some major controversy – their PR department has had to issue a statement explaining that they are not mocking the oil spill, but pointing out that there are still plenty of beaches that are not impacted. Whether or not that was their actual intent, the promotion seems to be working, because it got our attention!

Major airlines commit to keeping carry-on luggage fee free – will not follow Spirit Airlines

In a funny twist to the Spirit Airlines carry-on bag fee situation, Senator Charles Schumer has managed to get five major airlines to agree that they will not follow suit.

American, Delta, JetBlue, United and US Air have all confirmed that they will not go the route Spirit Airlines took, and that they will keep carry-on baggage free. The commitment comes as Senator Schumer works to talk Spirit Airlines out of their plan which will go into effect on August 1st.

In the past, many fee generating measures quickly spread to other airlines, so it was not completely unthinkable that the measure could become an industry standard.

In our own survey, 93.2% of Gadling readers said they think the carry-on bag fee is a bad idea.

While I agree that government getting involved in the private world of air travel is a dangerous precedent – I applaud their intervention in this case – the government regulates the skies and has the right to put measures in place to protect consumers.


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Senator duo working to ban Spirit Airlines carry-on bag fees


The clip of Spirit CEO Ben Baldanza reporting from an overhead luggage bin suddenly makes sense – his plan to introduce carry-on bag fees has reached two senators, who are outraged over the proposal. So outraged in fact, that they are drafting legislation that will prohibit airlines from charging for bringing bags on board.

Senators Benjamin L. Cardin (D-MD) and Mary Landrieu (D-LA) have created the Cardin-Landrieu Free of Fees for Carry-On Act. The bill covers the following:

  • Prohibits each air carrier operating in the United States from charging any fees for carry-on baggage that falls within the restrictions imposed by the air carrier with respect to the weight, size, or number of bags;
  • Requires each such air carrier to make detailed information about restrictions with respect to the weight, size, and number of carry-on baggage available to passengers before they arrive at the airport for a scheduled departure on the air carrier;
  • Requires each such air carrier to make available to the public and to the Secretary a list of all passenger fees and charges (other than airfare) that may be imposed by the air carrier.

Kudos to these senators for working on behalf of travelers. Of course, the bill is still in such an early stage that it is hard to determine how much support it will get.