January 25 - Spirit Airlines Misleads Customers


RADNOR, PA - Business Travel Coalition (BTC) today denounced Spirit Airlines for lying to its customers and the flying public regarding a new U.S. Department of Transportation (DOT) consumer protection rule that went into effect this week. Using over-the-top fear tactics, the airline warned consumers that: “Spirit must now HIDE the government's taxes and fees in your fares.” This statement is a disgraceful lie; period, full stop.

Airlines must prominently display the total fare, including mandatory fees and taxes (but not optional services fees, e.g., for checked bags). However, the plain truth is that airlines are allowed to break out these tax items on their websites and in print advertising in as much detail as they care to so long as the breakout is not more prominent than the total price – to avoid misleading consumers. For Spirit Airlines to state otherwise and to endeavor to launch a grassroots campaign based on a false and deceptive statement is unethical in the extreme, and inexcusable. (Note: See evidence of deception appended to the bottom of this statement.)

The purpose of the new DOT rule is to ensure consumers are not misled regarding the total price of an air ticket purchase in a radically changed airline marketplace. Since 2008, many airlines have aggressively unbundled services that were previously included in the price of an airline ticket, such as checked baggage. It has become exceedingly more difficult in recent years for consumers to determine the total price of air transportation. This new DOT rule represents a strong step in the right direction even as there is significantly more consumer-protection work in air transportation to be accomplished.

“With this ill-considered attack on DOT, Spirit Airlines has reached a new low and no doubt secured the Poster-Child crown for 2012 for misleading consumers. It is this kind of reckless anti-consumer behavior, designed to confuse consumers in this new unbundled, optional fee environment - where fees are hidden and base fares are distorted - that has drawn regulatory interventions from Washington and Brussels,” stated BTC Chairman Kevin Mitchell. “Regulators understand that there is great profit in consumer confusion and have justifiably interceded. Additional consumer-protection work needs to be accomplished with a sense of urgency.”

BTC strongly supports the third consumer-protection Notice of Proposed Rulemaking scheduled for publication in August 2012 that will address the availability of unbundled optional services (e.g., checked bags) and associated fees to agency and corporate sales channels, thereby facilitating efficient comparison-shopping for consumers. Airline customers continue to pay supra premium prices -- billions of dollars in fees -- for optional services because the inability to efficiently compare the total cost of air travel (base airfares and optional services fees) on an apples-to-apples basis across multiple airlines guarantees that these prices go undisciplined by the marketplace.

“Given the order of magnitude of ongoing consumer harm, BTC urges DOT Secretary Ray LaHood to take steps to expedite the rulemaking process within the Department and to seek to reduce the White House Office of Management and Budget review time,” added Mitchell. “The U.S. Congress should also direct DOT, through FAA reauthorization legislation, to require airlines to promptly provide optional services and fee data in an electronic and transactable format to all channels where individual airlines offer their base airfares for sale.”

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NOTE: TACIT EVIDENCE OF SPIRIT’S DECEPTION

See page 22, question 3. http://airconsumer.ost.dot.gov/rules/EAPP_2_FAQ_01-11-2012final.pdf.

DOT advised the airlines that “the Department decided to include a provision permitting a seller of air transportation to break-out these charges while still displaying the total price to be paid by the consumer. A separate statement of these taxes and fees, however, must not be false or misleading, must be provided on a per-passenger basis and must accurately reflect the cost of the charge to the carrier, and may not be displayed prominently. The purpose of the rule is to ensure consumers are not misled regarding the total cost of the purchase.”

DOT even provided the airlines with slides to illustrate how to display taxes and fees. See slides 31 and 32.http://airconsumer.ost.dot.gov/rules/April2011Amendments_003.ppt

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