Airlines have become reliant on ancillary fees to provide additional revenue above and beyond the basic price of an airfare. According to NYCAviation, airlines took in an additional $22.6 billion worth of fees in 2011, but at least one group of consumers is fed up with one fee in particular. According to NBC News, attorneys have filed a class action lawsuit against low-cost carrier Spirit Airlines claiming the Passenger Usage Fee charged by the airline is not an optional fee at all.
What is the basis for the lawsuit?
According to USA Today, the Miami-based law firm Podhurst Orseck filed the lawsuit claiming that the fee has no real value and that Spirit represents the fee as if it were imposed by the government. The Passenger Usage Fee is charged on all tickets purchased by phone or via Spirit.com, the most popular methods of ticket purchases, and ranges from $8.99 and $16.99 per ticket. Spirit claims the fee is used to cover ticket distribution costs , according to the Associated Press.
How dependent on fees is Spirit?
According to the United States Bureau of Transportation Statistics, airlines have pocketed more than $815 million from baggage fees and more than $630 million in reservation change fees in the first quarter of 2012. However, based on 2011 financial statistics, Spirit Airlines received 33.2 percent of its revenue from non-ticket related fees in 2011, according to NYCAviation, which makes the low-cost airline more dependent on revenue from fees than any other U.S. airline.
Is Spirit's Passenger Usage Fee unavoidable?
Spirit maintains that the fee is only charged on Internet and phone-based transactions, which means that any potential passenger looking to avoid paying the fee need only visit an airport counter, according to USA Today. In addition, the airline even mentions that lower fares might be available at the airport than directly on its website. However, the fee is included in the advertised price of the airfare and not added after the fact, which keeps it inline with DOT regulations.
How much does Spirit make off the fee?
During the time period covered by the class action lawsuit, from 2008 to 2011, it is estimated that Spirit raised $142 million, but that number could increase. Because airlines only report revenue from certain fee categories, including baggage fees and reservation change fees, it is difficult to gauge exactly how much money Spirit has collected from the Passenger Usage Fee.
Jason Gallagher is a former travel professional with a decade of experience in the industry. He remains an avid traveler and hotel fan with exposure to technology and trends in properties across the United States.
- Travel & Tourism
- Company Legal & Law Matters
- Spirit Airlines
- class action lawsuit