Wednesday, January 25, 2012

Taking a (Web) Page from Wikipedia's Book

Spirit Airlines is nothing if not clever, as I reported in The New York Times back in 2011 when this airline was alone among U.S. carriers in deciding to turn the baggage fee concept on its head. It not only charged to check a bag, it also charged for carry-ons. See what I mean? Verrrry clever.

Now, taking a page from the campaign of Wikipedia, Google and other popular Internet sites regarding proposed regulations of the web, Spirit has plastered an advisory on its home page about new government regulations that apply to airlines and it is urging passengers to make their voices heard in Washington.

Beginning this week, the U.S. Department of Transportation says airlines must include federal taxes when quoting the price of an airline ticket. Spirit's website alert was half of a two pronged effort to enrage airline passengers about the rule. It also send an email to its customers. But if Spirit thinks air travelers feel about their service providers the way that users of the Internet feel about Wikipedia and Google, maybe it's not as smart as I thought.

Photo courtesy Spirit Airlines
The reaction I've seen to Spirit's campaign is befuddlement. And once the issue is explained, befuddlement quickly turns to boredom. Spirit has misread the modern traveler if it thinks passengers care one whit more than the bottom line; "What is it gonna cost me to get from A to B? Question mark. Period.

Impulse travel is an increasingly popular activity a global phenomenon conceived and incubated by airlines that made travelers believe they could fly somewhere for pocket change. (See the music video by three Irish ladies for a hilarious example.) Its a deal with the devil though - a bait and switch that has travelers holding their noises while buying their tickets and boarding their planes.

Like Ireland's Ryanair, and others, Spirit advertises fares so low, low, low, the only way it can make money is by tacking fees, fees, fees to the price, price, price. the new law doesn't change that, it only adds the federal taxes and puts them right up front so would-be travelers can see them right away.

Rest assured, seat selection, ticket confirmation, checked bags and all those other add-ons will still hike up the ticket price. So my advice to Spirit is, Find a business model that eliminates that frustrating practice before you ask air travelers to carry your water because until you do, you and your airline buddies are in this fight on your own.


Oussama's Take said...

I know the airlines were all up in arms about increased cost to consumers if the rule is implemented. On the other as their customer whose ticket fares contribute to their well being, it would be nice to know what it is costing me to travel before I actually hit the book ticket button.
Is that too much to ask?!

Jeff Oliver said...

I love that video by the Irish ladies! Especially the last line about pre-paying for use of the steps. Sadly, it's not so far away from the reality of travelling on the Spirits and Ryanairs of the world.

Maybe Spirit is afraid that the new DOT rule will cause their customer to recognize that taxes are just a small part of the hidden costs of travelling with a no-frills carrier. The next logical step is for the DOT to require airlines to post a listing of all of their add-on fees right up front, so that the customer can do a true cost comparison.

Doug said...

First, anyone that has EVER bought an airplane ticket is aware of the taxes and fees so this was not a big problem. Also, airlines are already required to prominently display the fees.

I think you have pointed out just how disingenuous the government is being regarding the reason for these rules. The goal is not to clarify the "true cost" of the ticket, which of course is unknown until all options have been selected, but to force private businesses to bury government mandated fees and taxes into the "base cost" of the ticket so they are hidden from the consumer. Only a politician (or a sympathizer) can say with a straight face that these rules are about "greater transparency". Obviously they have quite the opposite effect.

Now the government can raise the fees/taxes and consumers don't have any way to determine how much of the fare goes to the government, just as it is with gasoline. Soon the airlines can be accused of "gouging" their customers along with the oil companies.

I for one hope Spirit and other airlines take the next logical step which is to include the fees, as they have been compelled to do, but highlight them (in parentheses next to the ticket price) so air travelers can see just how much of their hard-earned money goes to government bureaucracy.

Finally, it sounds as if some of you pine for the days of regulated, one-size-fits-all airfares. I say "No thanks".

sges said...

Actually, there is an important piece missing here. The problem is that airlines are publishing low "fares", then tacking on their OWN random "fees" - because airlines do not have to pay taxes on income from fees. That's why you see airlines charging for everything possible as a "fee" instead of as regular ticket price. THAT's the big issue airlines have with this new rule. (I, and much of my family, works in the airline industry. This is how I know that this is the problem.) Contrary to what Doug suspects, fees and taxes will always be indicated on a purchase receipt. Airlines are NOT being forced not to "blend" what is a tax/fee. They are being forced to list them in any advertising. It is not about gov't hiding fees. It's about AIRLINES not being able to hide fees.

Doug said...

sges, how is charging someone who wants to check bags, or wants to board early and have a "complimentary" drink, or who prefers a little more leg room a "random fee"? There are real costs borne by the airlines to provide these services and I for one don't want to subsidize the people who desire these amenities. Let every person pay for the services they choose to consume. The airlines are not "hiding" these fees. Certainly you must realize that these amenity fees can't be included in the total price until the consumer chooses them, right?

Also, the airlines have always been required to list the government taxes/fees in advertising (typically with a link near the fare on a website or at the bottom of a printed ad) and many have been fined for not doing it prominently enough, so that was not the intent of this rule. Contrary to your point that "airlines are NOT being forced to not [sic] "blend" what is a tax/fee", as I understand the law airlines are now required to display a total (i.e., "blended") cost including the taxes/fees so that's exactly what they are being forced to do. However, they can also show separately what portion of the total is for the fare/taxes/fees, etc. The problem is one of presentation: how do you display that much information and still make the presentation simple and appealing to someone who is comparing a list of fares? It's probably not a huge technical problem and the airlines that choose to separate the fare/taxes/fee components will figure it out.

Finally, I also work in the industry as do my family members but that doesn't make me any more of an expert on this than you. In any case, how does our (or our families) working in the industry give us any insight into the true intentions of politicians and government officials? I'm basing my opinion on the fact that fees that airlines were previously required to display in close proximity to the fare are now being "blended" into the fare in the name of "transparency". Obviously you can arrive at your own opinion however you choose.