Spirit Airlines has announced a new $2 fee on every ticket they sell. This is in response to the latest regulation from the United States Department of Transportation requiring all airlines to allow consumers to cancel a ticket purchase within 24 hours without penalty.
Spirit has instituted this new fee, complaining that this “misguided and expensive regulation” will cut deeply into their bottom line. “This prevents us from selling these seats to someone who definitively wants to book their reservation and leads to seats not being filled,” says Spirit CEO Ben Baldanza. “The consequence is that we must spread costs over fewer customers, thus raising the cost for all passengers.”
It’s actually kinda funny when you think about it.
Spirit WILL need those extra two dollars per ticket because of this new regulation, but not because they have to hold seats for 24 hours that may not actually be sold. That would only be a factor on flights running at 100% occupancy, and even on those, Spirit routinely oversells their seats.
Here, I believe, is the real reason this regulation will hurt Spirit Airlines:
For years, Spirit Airlines has thrived on a strategy I call “Too Bad, We Have Your Money Now.”
Did you buy a Spirit ticket on Travelocity for one set price, then found out a few hours later that Spirit’s additional fees not mentioned on Travelocity would add hundreds of dollars to your trip? Too bad, we have your money now! No refunds!
Did you buy a ticket on Spirit’s site to fly on a Sunday and then realize moments later the site somehow assigned you a ticket to fly on Monday? Too bad, we have your money now! Any change will cost you $130.
This new regulation is simply the DOT doing its job: protecting consumers from predatory practices. And it's about time. A company that isn’t in the business of taking advantage of consumers shouldn’t have any issue with giving a customer a grace period for a full refund. If Mr. Baldanza wants the DOT to leave his airline alone, he would be well advised to end Spirit’s policies that regularly take advantage of consumers.
Spirit has instituted this new fee, complaining that this “misguided and expensive regulation” will cut deeply into their bottom line. “This prevents us from selling these seats to someone who definitively wants to book their reservation and leads to seats not being filled,” says Spirit CEO Ben Baldanza. “The consequence is that we must spread costs over fewer customers, thus raising the cost for all passengers.”
It’s actually kinda funny when you think about it.
Spirit WILL need those extra two dollars per ticket because of this new regulation, but not because they have to hold seats for 24 hours that may not actually be sold. That would only be a factor on flights running at 100% occupancy, and even on those, Spirit routinely oversells their seats.
Here, I believe, is the real reason this regulation will hurt Spirit Airlines:
For years, Spirit Airlines has thrived on a strategy I call “Too Bad, We Have Your Money Now.”
Did you buy a Spirit ticket on Travelocity for one set price, then found out a few hours later that Spirit’s additional fees not mentioned on Travelocity would add hundreds of dollars to your trip? Too bad, we have your money now! No refunds!
Did you buy a ticket on Spirit’s site to fly on a Sunday and then realize moments later the site somehow assigned you a ticket to fly on Monday? Too bad, we have your money now! Any change will cost you $130.
This new regulation is simply the DOT doing its job: protecting consumers from predatory practices. And it's about time. A company that isn’t in the business of taking advantage of consumers shouldn’t have any issue with giving a customer a grace period for a full refund. If Mr. Baldanza wants the DOT to leave his airline alone, he would be well advised to end Spirit’s policies that regularly take advantage of consumers.
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