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Spirit Airlines Passes Savings to TravelersJuly 25, 2011 By: George Dooley Travel Agent
Spirit says some federal taxes, including the 7.5 percent U.S. federal excise tax on domestic travel, a $3.70 domestic segment tax, and a $16.30 international arrival/departure tax are no longer valid and cannot be collected by airlines.
Effective immediately, Spirit is passing along all of these tax rollback savings to its customers.
"Some carriers have not been so generous and have pocketed the difference in taxes in the form of higher fares, " Spirit says. "What many do not realize is that the 7.5 percent federal excise tax was previously included in the fare. For example, if your ticket was $100 last Friday, it included 7.5% federal excise tax of $7.50 plus a $3.70 domestic segment tax for a total of $103.70. Today, the new fare without the 7.5% tax and $3.70 tax should be $92.5."
Spirit said it is lowering all domestic non-stop fares by 7.5 percent and passing along the other tax savings, which can add up to over $50 round-trip per customer.
Spirit notes that other carriers are not so generous, saying, "Some are maintaining the previous pricing levels and continuing to charge customers the full $103.70 used in the earlier example and have chosen to pocket their share of the estimated $200 million per week difference and actually in effect raised fares today following the government’s deadline to cease collection of the taxes."
"Spirit has become a model for transparency, ensuring customers are not impacted by hidden fees as practiced by other airlines and the government. Spirit would never for example hide a bag fee inside a higher fare like some other airlines who have the audacity to claim that 'bags are free.' And before today, many did not realize that the 7.5 percent federal excise tax fee was hidden inside the domestic airfare," the airline said.
Spirit is encouraging consumers to contact their representatives in Congress to ask that they reauthorize the FAA, and is encouraging consumers to demand that if or when these taxes are reinstated that they be broken out and not be hidden inside the fare as practiced in the past.
"Congress could reverse this tax holiday at any time, so Spirit encourages customers to take advantage of these tax savings while they are available now," Spirit says.
Customers may be entitled to a refund on taxes for tickets purchased before today for travel after today. Consumers should contact the IRS directly for details, Spirit says.