Thu, Feb 09, 2012
Charge For Costs Of New DOT Rule Draws Response
Political discourse frequently includes mention of the costs
regulation imposes on business and their consumers. It's usually a
vague concept, but Spirit Airlines has ticked off Transportation
Secretary Ray LaHood by itemizing the estimated cost of new
consumer protection rules recently imposed by the department. It's
even calling the $2/ticket surcharge the "Department of
Transportation's unintended consequences" fee.
At issue is DOT's rule allowing passengers to change their minds
within 24 hours of booking a flight without paying a penalty. But
when seats held for passengers who change their minds can't be
resold, planes will fly with fewer seats occupied, raising the
per-passenger costs for the airlines. Spirit Airlines CEO Ben
Baldanza tells USA Today, "People love the idea of not having to
commit to a reservation, but this regulation, like most, imposes
costs on consumers."
While other airlines may absorb the costs into their base fares,
that would be very conspicuous for Spirit, which has fares as low
as $9. The company has staked out a position in the market which
shifts as many optional costs as possible into a la carte fees to
keep base fares low, even charging an added fee for carry-on
bags.
LaHood isn't pleased with the cheeky itemization of the costs of
his new rule. He tells the paper, "Rather than coming up with new
and unnecessary fees to charge their customers, airlines should
focus on providing fair and transparent service — that's what
our common-sense rules are designed to ensure."
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