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Boxer goes ballistic on Spirit Airlines

By Josh Richman
Thursday, January 26th, 2012 at 11:33 am in Barbara Boxer, Transportation, U.S. Senate.

U.S. Senator Barbara Boxer is going toe-to-toe with a Florida-based airline that’s complaining about how airfare taxes and fees must be reported.

Boxer, D-Calif., released a letter she sent today to Spirit Airlines CEO Ben Baldanza expressing “concern with Spirit Airlines’ deliberate attempt to deceive the flying public about a new Department of Transportation (DOT) rule that will improve the transparency of airfares for consumers.”

At issue is a new rule that requires that all mandatory taxes and fees be disclosed to customers up front in the fares that airlines advertise to the public. That includes a segment fee of $3.80 per take-off and landing; a passenger facility charge of up to $18 roundtrip; and a Sept. 11 Security Fee of up to $10 roundtrip for travel within or from the U.S.; other fees may apply for international flights.

Here’s how Southwest Airlines explains it:

In the past, fares displayed in our advertising and on southwest.com and airtran.com included the Base Fare plus a 7.5% federal excise tax. The additional government-imposed taxes and fees were shown separately from the fare in advertising and added to the total fare at the time the reservation was priced.

With the new regulation, fares will include the Base Fare plus the 7.5% excise tax, plus all additional government-imposed taxes and fees that we collect and distribute to various government agencies.

The fare amount with all government-imposed taxes and fees included creates various dollar amounts that are difficult to use in advertising efforts; therefore we’ve decided to round up our fares to the nearest dollar for display purposes only. The rounded up fare amount will be more than what a Customer will actually pay when booking the ticket – the cost variant between the displayed fare versus the booked fare could be up to 99 cents.

At first glance, airline fares will “look” higher after the implementation of these provisions, but that is only because of the added taxes and fees that will now be included on the front end as opposed to the back end. We did not increase our air fares on Southwest or AirTran.

Put simply, travelers already are paying these taxes fees – the new rule just requires that they be disclosed sooner. Airlines can still advise their customers how much of that total cost is attributable to the government, and how much the base fare is.

But Spirit – which operates more than 175 daily flights to over 45 destinations throughout the U.S., Latin America and Caribbean, including Oakland International Airport – e-mailed customers this week and has even launched a separate website with the headline, “WARNING: New government regulations require us to hide taxes in your fares.”

“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),” Spirit’s website says. “And if they can do it to the airline industry, what’s next? As the transparency leader and most consumer-friendly airline, Spirit DOES NOT support this new USDOT mandate. We believe the better form of transparency is to break out costs so customers know exactly what they’re buying.”

Boxer, however, notes airline passenger advocacy groups like the Business Travel Coalition also are criticizing Spirit for misleading consumers about the new rule with “over-the-top fear tactics.”

And the Department of Transportation in November fined Spirit for violating federal aviation laws and Department rules prohibiting deceptive advertising in air travel. When it launched service from Los Angeles to Las Vegas, Spirit used billboards and hand-held posters to advertise fares of $9 each way without disclosing the additional taxes and fees. The airline also used Twitter to promote the $9 fares but required travelers to visit two separate web pages to determine the amount of the taxes and fees.

“I have been shocked by the failure of your airline to tell the truth in an email sent to your customers earlier this week as well as in warnings posted on Spirit.com that read, ‘New government regulations require us to HIDE taxes in your fares.’ Nothing could be further from the truth,” Boxer wrote in her letter today. “I urge you to immediately send a clarifying email to your customers and remove the misleading information from your website.”

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  • Robert Poff

    Not sure what this is all about, I have been useing Spirit for the last 4 or 5 years, and when you check out at the end it is all layed out for you. Unless I’m missing something please leave it like it was.

  • Elwood

    “Not sure what this is all about–”

    With Baba Booboo you’ll never know what it’s all about, just sound and fury signifying nothing.

  • John W

    I’m with Boxer on this one. All the government requires is the transparency and user-friendliness of an all-inclusive price — with the option of also disclosing the details if they wish. Can’t claim to be a free marketeer and not also be for competition. And, as they teach in Econ. 101, transparency is the sine qua non of real competition.

  • RR, Senile Columnist

    A tempest in a teacup (made from recycled material)

  • Ken Head

    I think it’s a great idea to show all taxes and fees. IN fact, it’s such a good idea, that the same should appear on every ballot for every politician. Every tax and fee for which they voted in all offices they’ve held should be listed below their names. The same should appear at the end of every political commercial promoting them, and any other form of advertising that they use. Truth in advertising and truth in political commerce is what we need!