Last updated: 01:54 PM ET, Wed April 30 2014

DOT Denies Spirit’s Claim that New Rules “Hide” Taxes

Airlines & Airports | U.S. Department of Transportation | Kate Rice | January 25, 2012

Spirit Airlines is casting new Department of Transportation rules requiring airlines to advertise fares including taxes and fees as a government effort to hide taxes. The DOT disputes that. “Nothing in our rule will prohibit a carrier from informing consumers that the fare includes a specified amount of taxes and government fees, as long as the stated fare includes those taxes and fees,” said a DOT spokesman.

The new rules require airlines to give the full fare, including taxes and fees, rather than the base fare plus taxes and fees. That means if you’re booking a round-trip flight from New York to Chicago, airlines have to say that the total fare is $399. But there’s nothing stopping an airline from saying, as JetBlue Airways now does, that that price includes $21.80 in taxes and fees. A quick check of airline websites finds that some airlines list the taxes and fees under the full fare, others do not. The new regulations do not prevent airlines from posting the taxes included in the price.

The rationale behind the new rule is to give travelers the full price upfront rather than requiring them to add it up as they go. Airlines charge for many component of an airline ticket that used to be included, such as checking baggage, seats with slightly more legroom, boarding privileges and other factors.

Separately, however, the airline industry is concerned about the tax burden borne by airlines and their passengers.According to the Airlines for America (A4A), the trade association for U.S. airlines, “in spite of the airlines’enormous contribution to the economy, air travel is taxed at a higher federalrate than alcohol and tobacco — products that are taxed to discourage their use. Since 1990, the number of aviation taxes/fees has increased from six to 17; the total amount of taxes paid by the industry has grown from $3.7 billion to $17 billion over the same period.” Spirit is not a member of A4A.

For its part, the Business Travel Coalition is criticizing Spirit Airlines’ ad campaign against new consumer protection rules enacted by the Department of Transportation. Spirit is calling the rules an effort to hide taxes. “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,” the BTC said in a statement.

Open Allies for Airfare Transparency, a lobbying group seeking to clarify airfares, also criticized Spirit and its campaign. "Spirit Airlines and this seat-of-the-pants grassroots advertising campaign distorts the spirit of one of the most important actions to protect consumers undertaken by the Department of Transportation,” said Executive Director Art Sackler. “This misleading ad campaign only underscores the need for DOT's initiatives to protect consumers by requiring full disclosure and enabling consumers to compare complete prices across competing airlines.”

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