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Spirit Airlines Blasts New Regulation CostsJanuary 31, 2012 By: George Dooley Travel Agent
The U.S. Department of Transportation’s (DOT) new regulation requiring airlines to hold fares for 24 hours after booking without penalty comes with unintended consequences and is costing consumers millions, says Spirit Airlines.
To cover the costs of this regulation, Spirit is introducing the $2 DOTUC fee. The $2 fee to cover the unintended consequences of government regulations goes into effect today, January 31, 2012, Spirit said.
"While this may appear to be a consumer-friendly rule at first, the USDOT has ignored the cost impact to consumers. As the transparency leader, Spirit believes that consumers have a right to know that this misguided regulation is expensive and is hitting consumers directly in their pocket books. Spirit believes low fares are what help consumers most," Spirit said.
“People love the idea of not having to commit to a reservation, but this regulation, like most, imposes costs on consumers,” says Spirit President and CEO Ben Baldanza. “Wouldn’t we all like to eat all we want and not get fat? Regulators like to try to sell the idea of this rule, but have ignored the cost impact to consumers. You simply can’t eat all you want without consequences.”
"This rule mandates that we take out seat inventory for those who may or may not decide to pay for it. This prevents us from selling these seats to someone who definitively wants to book their reservation and leads to seats not being filled. The consequence is that we must spread costs over fewer customers, thus raising the cost for all passengers," Spirit said.
This ‘tax’ on consumers ripples through all aspects of the economy and costs Americans jobs, Spirit said, urging Americans to take action and hold elected officials and their appointees accountable to their promise to reduce regulations.
Spirit offered a reminder that last year Spirit walked the walk while most other airlines "gouged" their consumers when Congress failed to reauthorize the FAA’s funding.
During the FAA shutdown airlines could not collect federal taxes, Spirit noted, and while Spirit passed along all of the tax rollback savings to its customers, the company said nearly all other carriers pocketed the difference in taxes in the form of higher fares.