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."

FMI: www.spirit.com