LaHood on Spirit’s carry-on baggage fees: “We’re gonna hold the airline’s feet to the fire on this”

Spirit Airlines’ decision to begin charging passengers for carry-on luggage — and lowering some fares to a penny — has caught the attention of the federal government, as many predicted it would. In part one of our exclusive interview with Transportation Secretary Ray LaHood, we talk about fees, consumer protection and the future of airline service.

Spirit Airlines announced earlier this week that it would start charging passengers for carry-on bags this summer. It has also lowered some fares to one cent. I think it’s possible customers will think they’re booking a penny fare, only to discover that everything else is extra after they’ve made a purchase decision. Do you think that’s the way they ought to be doing it?

Absolutely not.

How should they be doing it?

I think they should fully disclose to people — either if they’re calling or if they’re looking at a computer screen — in a way that’s legible and clearly readable, so that if they are going to charge you, you board the plane and you put your bag above the seat, that whatever that charge is, people can see that.

This idea of trying to deceive people with some little amount of print that nobody can read, or somewhere tucked away, I don’t agree with that.

And we’re gonna hold the airline’s feet to the fire on this. Because we have an obligation to do it and we have the ability to do it.

I think it’s a bit outrageous that an airline is going to charge someone to carry on a bag and put it in the overhead. And I’ve told our people to try and figure out a way to mitigate that. I think it’s ridiculous.

Do you think Spirit crossed the line?

I don’t think they care about their customers. That’s what I think. And I think when you charge somebody to use the bathroom, you don’t care about your customers. I mean, it’s pretty clear.

That hasn’t happened here — yet.

No, but they’re suggesting it.

What about convenience fees — charging people to use their credit card? Allegiant Air does that now. DOT hasn’t stopped it.

I think if it’s not disclosed, it’s a real insensitivity to customers. I really do.

I think the question really is, at what point do you disclose that? Do you disclose it when you’re quoting the fare …

I think it should be disclosed on the phone or on the computer screen, when you’re buying the ticket.

When the fare is being quoted? So that you can make an informed buying decision?

That’s correct. I think trying to keep these things secret is not a fair way to treat people.

I’m sure you’ve been following the Menendez bill, which would require airlines to quote a total price on their tickets. Isn’t that the kind of thing your department can mandate in an administrative rulemaking?

Yes, it is.

So when you say you want to hold their feet to the fire, you’re talking about a rulemaking?

That’s correct.

There’s one scheduled for release in June. Is that what you’re aiming for?

We have a rule in process, and all the things we’re talking about, they’re being considered.

We’re on this. Stay tuned.

Speaking of rulemakings, several airlines have asked for exceptions to your new tarmac delay rule, and they’re threatening to cancel flights. Any thoughts on that?

You know, I think I could make an argument that our tarmac rule is about safety. How safe can it be for someone to sit on an airplane for more than three hours, in that steel tube, without access to a bathroom, without access to food, without access to water?

To me that’s a safety issue. And it’s a health issue. I can make the case for that.

I’ve read where they say, “We’re going to go back to the gate.” Fine. You know what happens when you go back to the gate? You can rebook your flight, you can go home and rest, and get on a flight the next morning. Or you can sit at the terminal, and make a decision.

You’re not cooped up in an airplane without food, water or a lavatory.

So I take it that airlines asking for exemptions are not going to get them?

Look, you know my philosophy on this. I don’t think I can say.

A lot of people have noticed a shift in the way the Department of Transportation has approached customer service issues in this administration. What’s going on?

I think we feel we have an obligation to the flying public, for safety. We want to make sure that when people get into a car, a bus, a train, an airplane, that it’s the safest it can possibly be.

But I know a lot about being a passenger. And how passengers are mistreated. And so, it’s a priority. A lot of us around here are passengers. I think there is a different philosophy. But it’s based around safety.

I wanted to ask you about codesharing. People say they’re confusing when their ticket has one airline on it but they end up flying on another. Do you think there’s adequate disclosure?

I think the idea that codesharing is confusing — I agree with that. I agree that when people really pay attention when they look at a computer screen, as they’re buying a ticket, [they're confused].

Our obligation is to make sure that when people get a ticket, that the name of the airline is on there. What airline it is. I take your point on this. When I would board a plane in Peoria, I would see United Express on it, but on the ticket it would say Midwest. And unless you pay attention, you don’t know that it’s a different company than United Airlines.

So we do feel an obligation that there has to be truth in the purchase of a ticket. Truth in the amount of tax that you’re paying. Truth in who’s actually going to be operating the airline. So we have figured out ways to do that — not always recognizable by the flying public, unfortunately.

But when it’s called to our attention that there is not this kind of acknowledgment, we make sure the airline knows that. And if they’re not complying, we have ways to mitigate that.

This interview was conducted April 7, 2010. The questioners were Christopher Elliott, National Geographic Traveler’s ombudsman, and Charlie Leocha, president of the Consumer Travel Alliance.

(Photo: WSDOT/Flickr Creative Commons)

  • Bryan

    I’ll believe it when I see it…or maybe read it! All rhetoric and no bite or consequences to amount to anything. If one airline does, then the rest will follow shortly. I guess we need to pack in a cardboard box and ship via FedEx or UPS.

  • larry

    Ray La Hood must be aiming for a higher office and wants good press. He simply told something that is not true about bathroom fees on Spirit. He said they were suggesting it. That is completely opposite of what the CEO of Spirit said yesterday on Fox News. When asked, he said it was not nor ever would be under consideration. He said a customer should not be charged for something they HAD to do, only for stuff that was optional. Also Spirit’s new baggage policy and fee schedule is in really BIG BOLD type on the baggage page on their web site. I do not think the Federal Government has any business tinkering with the marketing departments of ANY business.

  • http://http/aol.com Barbie45

    Larry, I would like to be able to not be charged with my carry ons, however I agree with you no more Federal Government messing around with market forces.There are many other airlines we can fly with that do not have that policy.

  • Phil

    People are confused when buying an airline ticket as mentioned above? They do have a choice, confusion or walking into a travel agency and having it done right. No simpathy here for those confused people, if you don’t know or understand what you are doing then don’t do it.

  • http://www.cosmo-and-me.blogspot.com Cosmos Human

    Spirt just lost my business, I have never even flown on them.

    Ryanair now will charge to use the toilet. I only hope that someone does not become ill and can’t get his money in the slot fast enough! What a huge mess that will be.

    Where will these fees stop? We are treated like baggage anyway.

  • NH

    I think some of the confusion comes in because they don’t list all the so-called “optional” fees when you are looking at the fares for a ticket. Yes, Spirit lists the baggage fees on their baggage policy page, but what about all the other fees? There should be a chart with all the possible fees an airline may charge you that is either on the main page of the website, or that is on the same page as all the fare quotes. A customer shouldn’t have to hunt on the website trying to find all the fees they may have to pay, in addition to the fare. Airlines don’t have near enough transparency when it comes to fees. The Truth-in-Lending Act made it a lot easier for people to make an informed decision when it comes to credit/lending, since all the information is there in a concise, fairly uniform format. When you go to the store to purchase an item, the full price (minus the tax) is listed on the shelf. Why can’t airlines do the same thing?

    I understand that airlines are hurting right now and the ancillary revenue gained from all the new fees are helping. I can even half-way agree with checked baggage fees. It costs the airlines when you check a bag (they have to pay baggage handlers, pay for a baggage handling system, etc.). So, I may not like it, but there is an additional service here. However, why should I pay the airline for me carry a bag on the plane and place it in the overhead bin. I am the one doing the work, not the airline. I also really dislike seat assignment fees. What is the cost to the airline in letting me pick out a seat?

  • BucksterSF

    OMG – have we really become a society of such whiners that it matters what the government says about fees???? Vote with your dollars folks. It actually works.

  • Jesse

    The codeshare portion of this story was most interesting. To an inexperienced flyer, when you buy your ticket on united.com, pull up to the United terminal, board at a gate with United logos and United personnel everywhere, get on a plane that says United on the side, sit in a seat that says United on the head rest, read the United in flight magazine, have a flight attendant with a United uniform … you think that you’re actually flying United. In actuality you’re flying Colgan, or Midwest, or Chattaqua, or Mesa, or Republic, or Corporate, or Skywest, or ExpressJet, or Shuttle America, or Comair, or ASA or …..

    It’s deceiving.

  • Harry

    Attn: Chris
    It was great that you had the opportunity to interview Mr. LaHood, particularly about consumer protection related to Spirit’s apparently deceptive advertising. Why don’t you interview Alex Sink about the decade of deception travel agents in your home state of Florida have engaged in? In reading your blogs there must be tens of thousands of consumers who bought what they thought was insurance. What’s happening now? The guilty parties are being slapped on the wrist and even you are being sued for reporting on the issue. It’s admirable that a politician like Mr. LaHood is taking such a strong stand, but what is Ms. Sink doing?
    Yes, the Spirit story could be big news, but Florida consumers have been ripped off for almost a decade and that IS big news.

  • http://nodebtworldtravel.com brian

    It’s the fatigue of the consumer that is fueling the outrage against this additional fee. Everyone knows the airlines are losing money and no one want to see people out of work or another company out of business.

    There is nothing that can be done about it. Spirit should be forced to make all the POTENTIAL fees visible before booking but those super low fares are going to bring people in. Call it clever marketing, call it bait and switch, but I fear the rest of the industry will follow.

  • Carver

    @Phil

    If I understand correctly, allow the airlines to make misleading statements so that customers are forced to utlize travel agents? Yeah, that’s a fair solution

  • David Z

    I think some of the confusion comes in because they don’t list all the so-called “optional” fees when you are looking at the fares for a ticket. Yes, Spirit lists the baggage fees on their baggage policy page, but what about all the other fees? There should be a chart with all the possible fees an airline may charge you that is either on the main page of the website, or that is on the same page as all the fare quotes. A customer shouldn’t have to hunt on the website trying to find all the fees they may have to pay, in addition to the fare. Airlines don’t have near enough transparency when it comes to fees.

    IMHO that pretty much sums it up. If an airline shows the fare on page two, then the bag fees on page four, then finally all the fees on page seven…no wonder people can get rather confused and frustrated having to go through all that rather than an “all-in-one” page.

  • Heather

    I’ve said this on a number of posts but I’ll say it again…it’s AGAINST THE
    CREDIT CARD POLICY THAT A U.S COMPANY SIGNS (read: agrees to
    abide by) THAT THEY CAN *NOT* CHARGE A FEE FOR USING A
    CREDIT CARD. Any U.S. business that does this needs to be reported
    ASAP to the credit card companies. These cc companies WILL go after
    the “violator”.

  • J C

    The issue of whether or not, carrying your bag on the plane is non service related, because you are doing it yourself is irrelivant. Same with the seat assingment fees when YOU click it. . This has nothing to do with service, safety, or cabin congestion. It is nothing more than a blatant move to add another fee Period.

    Also, to those who feel it is a right to carry on piece of luggage, it is not. It is a PAST PRACTICE that we have enjoyed, just like other past practices that we are now paying for.

    It’s a business decision and it’s getting to be the nature of the beast as other Airlines are looking at this. You can decide what to do with your wallet. It’s as simple as that.

  • EricR

    @Heather – your information is not correct under all circumstances. Do you have documented proof for your statement, or are you just repeating this because someone else told you?

    For example, while in most instances charging *more* for a transaction because the customer uses a credit card DOES usually violate the terms of service to which the merchant agreed, giving a *discount* if the customer pays with cash DOES NOT violate their merchant agreement. Very fine line, but it’s still a huge loophole. (Gas stations do this all the time, if you’ve noticed.)

    The “convenience fees” charged by Allegiant Air may be an entirely different type of loophole, especially if such fee is properly disclosed and doesn’t necessarily segregate credit card purchases. (Try booking a flight on Allegiant when you tell them you don’t want to pay the convenience fee – can’t be done. You can try to report, but you’re still not booking that flight!)

    Last time I researched this, I discovered the following states prohibit credit card surcharges: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. Not sure how that applies when booking from within California but the vendor is in Delaware, though…

    I believe *minimum* orders are indeed prohibited across the Board (i.e., requiring that you must spend at least $10.00 to use your credit card), and if you have Visa, you can call (800) VISA-911 to report violations. Not sure what the MasterCard report line is.

    BTW, many stores set up merchant clearing accounts with their banks or with a service provider that handle all Visa/MasterCard transactions. Not sure if that changes the rules at all.

    Here are two URLs I found while previously looking for documentation:
    http://consumerist.com/2006/04/mega-update-requiring-minimum-credit-card-purchases-is-a-violation.html
    http://fso.cpasitesolutions.com/premium/LE/06_le_ic/fg/fg-merchants.html
    Both links work, but I don’t know if the articles are still 100% current.

    Also check out Section 167 of the Federal “Truth in Lending Act.”

    BTW, did you know that under the merchant agreements of MasterCard, Visa, Discover, and AMEX, you do NOT need to present a driver’s license in order to complete a credit card transaction? Very interesting… ;)

  • larry

    Eric,R, you stated this better than I could. Heather is just half right. Some Liquor Stores in my area have 2 prices listed on each product. One cash and the other for credit, debit and charge. As a retailer myself for 35 years, I can state for certain that as long as both prices are posted, this does not violate contracts with card companies.

  • Carver

    While I admit, I have not seen every credit card contract from all over the US, I’ve seen a few and each one strcitly forbade charging more for the use of a credit card. Of course, I can imagine that a large enough vendor might be able to negotiate around that.

  • PauletteB

    Ryanair will probably also charge a fee to make change! I don’t care how cheap their “base” rate is, it’s still too much to pay for such corporate idiocy. Can’t help but wonder if they nickel and dime on pilots and maintenance too.

  • PauletteB

    For my most recent trip to Australia, Qantas and/or my TA gave me a “discount” for paying cash instead of using a credit card. As with gasoline stations, as long as both prices are posted clearly/provided up front, it’s perfectly legal.

  • Ed

    Spirit claims that they can save travelers money by imposing a $45/bag carry-on fee. I don’t see how that can be…
    *NOW* if the gave people a $45 discount for *NOT* carrying on a bag, well, that’s a different thing…that’s obvious.

    as for charging to use the bathroom? Well, that’s SOP for europe! Have you ever gone to the bathroom in a public establishment without having to put in a Euro first?
    Ed

  • Kevin M

    Ed – it’s one thing to charge for a public bathroom in a store or restaurant (although I agree that exceptions ought to be made for paying customers, but that’s an “ought to” not a “should be forced to”). In theory, you can always go down the street to a place that doesn’t charge, or back to your house/hotel/apartment/condo whatever, assuming you can hold it for the duration.

    On a plane flight, particularly a lengthy one, you have no other choices. That’s a significant difference.

    I think if a rule on disclosing fares on websites, etc. is made, it could be quite simple. The airline must ask the traveler to answer “yes” or “no” (and in appropriate cases, indicate a quantity) to all questions which could affect the total price of the trip. Will you be checking a bag? If so, how many? Will you have a carry-on piece of luggage other than a briefcase or purse? Do you want to be able to select your seat now, or will you accept any seat assigned at the time of the flight? And so forth. All of this should be required to be asked at the same time as you indicate your desired city-pairs & dates of travel, or in an intermediate screen that comes up before you are shown any prices.

    Then, and only then, should the airline (or Orbitz, or Expedia) be allowed to quote you a fare, and it should include everything you indicated. In addition, the displayed price should include, itemized, at a minimum:
    -the base airfare;
    -actual taxes levied on the transaction
    -fees levied by the government (security fee, for instance)
    -fees levied by the airport(s) in question (landing fees, for instance)
    -fees levied by the airline (baggage fees, seat selection fees, exit row fees, whatever – each identified and with an amount for each).

    Then consumers could really make an informed choice. United may show a $150 fare before all the extras, and Southwest may show a $174 fare, but the totals may be closer (or further apart) depending on whether or not someone utilizes things like checked bags or picking a seat. THAT’S disclosure.

  • Erest

    @ Heather April 8, 2010 at 12:42 pm
    I’ve said this on a number of posts but I’ll say it again…it’s AGAINST THE
    CREDIT CARD POLICY THAT A U.S COMPANY SIGNS (read: agrees to
    abide by) THAT THEY CAN *NOT* CHARGE A FEE FOR USING A
    CREDIT CARD. Any U.S. business that does this needs to be reported
    ASAP to the credit card companies. These cc companies WILL go after
    the “violator”.

    Heather,
    I have talked to both MC and Visa (in 2009) via email and telephone about this very thing. They have both told me, that it is up to my card issuer, ie: Wells Fargo and BA. If you have some specific information that backs your claim, please post it. I, and probably others, would be intrested in seeing it.

    My impression after talking to the to MC and Visa is that they only cared about their fees the issuer pays them. Thats what I thought anyway. So please; pin them down and post it. I would love for it to be enforceable.

  • James

    The “market forces” argument is often spouted by a lot of company high-ups, and sounds pretty good when said. Problem is, the “free” part is only really free until they have you by the balls. Think of how difficult it is sometimes to just change cable providers. A lot of towns MAYBE have BOTH comcast and verizon, problem being both are complete consumer atrocities, and in most cases charge roughly the same. F*cked if you do, F*cked if you don’t. Its the same with airlines: Which has a flight on the day you can actually head out, that’ll match with your hotel reservations (or work obligation or whatever)? Oh what’s this? only spirit or united, and oh BOTH are doing it now?

    Well SH*T.

    The free market system would WORK, its not a bad idea in theory (then again neither’s communism and you’d probably be very happy to tell me just how bad that gets in practice), but all you get are a bunch of near identical bastards copying eachother on how to best fuck you up the ass, paying to change some laws so its legal, and then some more to squeeze out more competition, using that “big brother government” they worry you so much about to protect themselves from retaliation.

    Its not free if the head’s legally and financially immune to the actions of its hands. A little regulation can make for far more freedom and competition. The king on the hill just doesn’t like being pushed.

  • Jennifer

    I agree with BucksterSF. The beauty of living in a free market society is that consumers have all the power in the world to put Spirit Airlines out of business. Just don’t fly them if you don’t believe in their policy. Do we really need big government to come in and tell a company how to run their business?

  • Cathy

    By charging for checked bags the airline created this boarding and unboarding nightmare, not enough room in bins, people walking up and down isles while boarding is underway, getting bumped and shoved by reg. sized luggage, and the people who just HAVE to get things in and out of the bag right over your head. Airlines make it worse by not enforcing thier own rules for size restriction for carry ons. Charging for both carry on and checked bags is what would be (or is) outrageous. The vast majority of us need some kind of luggage while traveling, it has to go somewhere. There should be at least one option to not pay extra for something that is an integral part of travel. If you don’t like the free option then you can pay extra.

  • http://www.kwicherbichen.com Brian

    Stop being a bunch of whiners. For Christ sake, if you don’t like the fees vote with your feet. The company will either change it’s policy or go out of business. What is they were only charging 1/2 the price of others and had a couple extra fees for using other services that you might be able to do without? Would you be saying the same thing? Hell no you’d might lighten your load a little or take a pee before you got on the plane and save 1/2 off.

    LaHood is a moron to say anything about how a company chooses to run. It’s their money let them fail if they like. I wish these Government bureaucrats would mind their own friggin business and stop wasting tax dollars meddling in private business affairs.

  • FJP912

    So Spirit’s CEO “said a customer should not be charged for something they HAD to do, only for stuff that was optional.” Umm, except for a few routes frequented by business travelers flying to meetings in the morning and coming home the same day (and there aren’t too many of those routes in Spirit’s schedule), doesn’t everyone have to bring some luggage? For that matter, people who travel without luggage are presumed to be terrorists. So, shouldn’t we charge THEM more, like an extra fee that goes to TSA, to make up for the cost of the extra screening?

  • Roy

    Why the big fuss. I’ll never fly Spirit again. Others should do the same.

  • http://HipsterTravelGuide.com Scott Burgess

    Elliott — fantastic job getting LaHood on the record — though I am concerned that the feds are talking about regulating even more things. I’m with so many other people and am boycotting Spirit, that’s the best way to deal with these very greedy companies — not give them any money. A penny for the ticket and $189 charge on my credit card — even a dope like myself can see through that.

  • Raquens Turenne

    Hello! I am going back to Haiti with 2 baggages. How should I check them online?

  • http://pancho@panchosays.com panchosays

    USA needs high-speed bullet trains!!!! Just like them thurd world countries have and we doesn’t.
    Shame shame.

  • http://profile.yahoo.com/7PNXHSWNHBH5SSJTMM4YKOYLNE JhelaPeh Atatalyc

    This is one of the best desserts I have ever eaten, much less made! Id give it 6 stars if it would let me. I used high quality coconut milk (sorry, lite isnt allowed in my kitchen) ;) and I tasted the perfect amount of coconut without extract. I also added maybe a 1/4 -1/2 cup of ghirardelli bitter sweet chocolate chips at the end of the wine reduction. Again, Wow!!