Spirit Airlines names fare hike after Transportation Department

Reuters News
Posted: Feb 02, 2012 11:53 PM
Spirit Airlines names fare hike after Transportation Department

By John Crawley

WASHINGTON (Reuters) - Commercial airlines often complain about government rules and at times seek to change them, but Spirit Airlines has created turbulence in Washington in response to a new mandate by naming a $2 fare hike after the U.S. Department of Transportation.

The low-fare carrier, which has tangled with regulators in the past, struck at the Obama administration after new rules requiring greater transparency in industry fare advertisements took effect last month.

Spirit, calling the changes "misguided and expensive," announced that it was adding an additional $2 charge per ticket, which it called the "Department of Transportation Unintended Consequences Fee," which took effect on Tuesday.

"Regulators like to try to sell the idea of this rule, but have ignored the cost impact to consumers," Spirit CEO Ben Baldanza said in a statement.

Spirit was particularly unhappy with a requirement that gives customers who make a reservation but do not commit to flying 24 hours to cancel their plans without paying a penalty. Airlines cannot sell the seat during that period even if another customer is prepared to pay for it immediately.

Major carriers have sued to overturn the rule. Spirit says restrictions on selling all seats will spread costs over fewer customers, resulting in higher fares.

Transportation Secretary Ray LaHood called the regulations common sense and fired back at Spirit.

"This is just another example of the disrespect with which too many airlines treat their passengers," he said in a statement.

Regulators and Spirit have wrangled for several years over advertising transparency, triggering allegations that resulted in proposed fines.

In separate action last week, the Transportation Department proposed a $100,000 fine against Spirit over allegations it failed to appropriately record and respond to complaints about how it treated disabled passengers.

Spirit had no comment on the latest penalty.

(Editing by Steve Gorman and Peter Bohan)