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ULSaDODartmOn t o f Assisiam secretary '• ' •• , •( I A i !vi'i'20 0 New Jersey Ave , S E 

TiYir^atlon • i" C ."Tf^AT (T-^^^-^-^ion, DC 20590 

Office of the Secretary 

of Transportation i js :'1 A 'J: 9 0 

July 20, 2011 

Joanne W. Young 

David M. Kirstein 

Counsel for Petitioners 

Kirstein and Young 

1750 K Street, N.W., Suite 200 

Washington D.C. 20006 

Dear Ms. Young and Mr. Kirstein: 

This is in response to your letter dated July 6, 2011 on behalf of Spirit Airlines, Inc. ("Spirit") 

and Allegiant Air LLC ("Allegiant") (collectively "Petitioners") requesting that the U.S. 

Department of Transportation (the "Department" or "DOT") postpone or stay the effective date 

of its final rule enhancing airline passenger protections. Enhancing Airline Passenger 

Protections, 76 Fed. Reg. 23,110 (Apr. 25, 2011), pending judicial review of various provisions 

in this regulation by the United States Court of Appeals for the District of Columbia Circuit. On 

June 15 and 16, 2011, respectively, Allegiant and Spirit sought judicial review of this rule. 

As an initial matter, the Department notes that other interested parties, who have not filed 

petitions for review, have requested that the Department extend the effective date of the final 

rule, or certain provisions of the final rule. Upon review of those requests, the Department has 

decided to extend the effective date of certain provisions of the final rule, including the five 

provisions Petitioners challenge here, to January 24, 2012. The Department's decision to extend 

the effective date of those provisions will appear shortly in the rulemaking docket, DOT's 

website, and will be subsequently published in the Federal Register. Because the Department is 

extending the effective date of the provisions Petitioners challenge in this matter, a stay is not 

warranted under applicable law. Nonetheless, the Department has given careful consideration to 

your request, but has concluded that there is no basis for granting a stay. 

The Department's final rule on enhancing airline passenger protections contains many new 

requirements to improve the air travel enviroimient for consumers, expanding upon the passenger 

rights included in its first consumer rulemaking. The rule (1) increases the number of carriers 

that are required to adopt tarmac delay contingency plans and the airports at which they must 

adhere to the plan's terms; (2) increases the number of carriers that are required to report tarmac 

delay information to the Department; (3) expands the group of carriers that are required to adopt, 

follow, and audit customer service plans and establishes minimum standards for the subjects all 

carriers must cover in such plans; (4) adds carriers to those required to include their contingency 

plans and customer service plans on their websites; (5) increases the number of carriers that 
must respond to consumer complaints; (6) enhances protections afforded passengers in oversales 

situations, including increasing the maximum denied boarding compensation airlines must pay to 

passengers bumped from flights; (7) strengthens, clarifies and codifies the Department's 

enforcement policies concerning au: transportation price advertising practices; (8) requires 

carriers to notify consumers of optional fees related to air transportation and of increases in 

baggage fees; (9) prohibits post-purchase price increases; (10) requires carriers to provide 

passengers timely notice of flight status changes such as delays and cancellations; and (11) 

prohibits carriers from imposing unfair contract of carriage choice-of-forum provisions. Only 

this Department can adopt consumer-protection regulations to protect airline passengers as states 

are preempted from regulating in this area' and the Federal Trade Commission (FTC) Act by its 

own terms cannot be enforced against U.S. and foreign air carriers. Further, no private right of 

action exists for airline consumers to enforce the pertinent provisions of Title 49 in the courts. 

The Petitioners assert that the rule unlawfully: (1) ends the practice of permitting sellers of air 

transportation to exclude government taxes and fees from the advertised price; (2) prohibits the 

sale of nonrefimdable tickets by requiring airlines to hold reservations at the quoted fare without 

payment or cancel without penalty for at least twenty-four hours after the reservation is made if 

the reservation is made one week or more prior to a flight's departure; (3) prohibits post purchase 

price increases, including increases in the price of ancillary products and services, after the initial 

ticket sale; (4) requires baggage fees be disclosed on e-ticket confirmations; and (5) mandates 

notification of flight schedule changes. The entire rule is scheduled to take effect on August 23, 

2011, except for the provisions related to full fare advertising which were to become effective on 

October 24, 2011. However, as noted above, the Department has decided to extend the effective 

date of the full fare advertising provisions, as well as the other provisions Petitioners challenge 

along with certain other provisions, to January 24, 2012. 

The Department has the authority to postpone the effective date of rules when it "finds Justice so 

requires." 5 U.S.C. § 705. The factors to be considered in determining whether a postponement 

or stay is warranted are: (1) the likelihood that the party seeking the stay will prevail on the 

merits; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the 

prospect that others will be harmed if a stay is granted; and (4) the public interest ui granting the 

stay. See, e.g., CSX Transp.. Inc v. Williams, 406 F.3d 667, 670 (D.C. 2005); Washington Metro. 

Area Transit Commission v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C. Cir. 1977). A stay is 

considered "an extraordinary remedy that should be granted only when the party seeking relief, 

by a clear showing, carries the burden of persuasion." Cobell v. Norton, 391 F.3d 251, 258 (D.C. 

Cir. 2(X)4). We apply these four criteria in evaluatmg a request to DOT for a stay of a DOT 

final action pending judicial review. We have considered the arguments made in your stay 

request and concluded that you have not demonstrated that a stay is warranted in this instance. 

I. Petitioners Are Not Likely To Succeed On The Merits. 

Petitioners contend that a reviewing court is likely to set aside various provisions of the 

Department's final rule on enhancing ahline passenger protections because they are (1) contrary 

49 U.S.C. 41713 ("..States may not enact or enforce a law, regulation, or other provision having the force 

and effect of law related to a price, route, or service of an air carrier...'*), see Morales v. Trans World Airline, 504 

U.S. 374, lI2S.Ct.2031, lI9L.Ed.2d 157(1992). 
to the purpose and spirit of the Airline Deregulation Act; (2) arbitrary and capricious or not in 

compliance with procedures required by law as the Department failed to make a rational 

connection between the facts foimd and the choice made; (3) in violation of the Administrative 

Procedure Act's notice and comment requirements; and (4) contrary to air carrier corrmiercial 

free speech rights as protected by the First Amendment. However, the carriers provide no real 

evidence to support their claims. 

Full-Fare Advertising Rule 

Petitioners contend that the full-fare advertising rule is defective because it violates the 

Petitioners' commercial free speech rights protected by the First Amendment. The Petitioners 

also challenge as arbitrary and capricious the Department's change in its enforcement policy 

regarding price advertising, which previously permitted carriers to quote advertised base fares 

separately from non-ad valorem goveniment imposed taxes and fees collected on a per passenger 

basis. DOT disagrees with Petitioners* allegations. 

The First Amendment does not extend to commercial speech that does not "accurately inform the 

public about lawful activity" or is "more likely to deceive the public than to inform it." Central 

Hudson Gas & Elec. Co. v. Public Service Comm'n ofN.Y., 447 U.S. 557, 566 (1980). When 

commercial speech concerns a lawful activity and is not misleading, the Department may impose 

restrictions on it only when its interest in regulating speech is substantial, the regulation directly 

advances the govenmiental interest asserted, and the regulation is not more extensive than is 

necessary to serve that interest. Id. 

Spirit's and Allegiant*s contention that its First Amendment rights are violated appears to be 

based on its mistaken belief that the Department has not established through evidence in the 

record that fare advertising that excludes government taxes and fees is misleadmg. This is not 

the case. As we explained in responding to comments in the final rule, we have received 

complaints from consumers regarding fare advertising "some of which specifically mention 

feeling deceived when they are not quoted the fiill price to be paid after an initial inquiry." 76 

Fed. Reg. 23110, 23143 (Apr.25, 2011). We also noted diat "comments from individual 

commenters and persons participating in Regulation Room show consumers feel deceived when 

the total price, including taxes and fees, is not quoted to them after an initial fare mquiry." Id. In 

addition, we explained that consumers need a full picture of the total price to be paid in order to 

compare fares and routings as "carriers and online travel agencies have started to offer more 

complicated routings with multiple connections in order to provide the 'lowest' airfare to 

consumers" and that "with these changes in routings, taxes and fees can increase and become a 

significant portion of the price to be paid by consumers." Id. Further, the rulemaking record 

makes it clear that "in recent years, carriers are increasingly unbundling the cost of air travel, 

which further obscures the total fare to be paid by the consumer." Id. The Department believes 

that not requiring that the advertised price include all mandatory fees including government taxes 

and fees^ when combined with the increasingly common practice of imbundling the cost of air 

^ Nothing in the current regulation prohibits carriers from informing the public of the taxes and fees the 

government imposes on air travel. These taxes and fees, which have proliferated in number and increased in amount 

assessed over the years, may be stated separately or through links or "pop-ups" on websites that display the total 

price. 
travel makes it difficult if not impossible for an ordinary person viewing an advertisement to 

determine the total amount to be paid for the transportation. 

We also dispute the claim by the Petitioners that the prohibition on the practice of excluding 

government taxes and fees is arbitrary and capricious because, according to these carriers, 

nothing in the rulemaking record supports a reversal of policy relied on by the airline industry 

which the Department reaffirmed in 2006. Petitioners* contentions are not accurate. The 

Department proposed to end the practice of permitting sellers to exclude government taxes and 

fees from the advertised price because of concern that "in many cases consimiers are not easily 

able to determine the total cost of air transportation services or are deceived regarding the true 

price." 75 Fed. Reg. 32318, 32327 (June 8, 2010). The Department was also concerned that 

"[gjiven technological iimovations and new methods of communication, carriers and ticket 

agents are finding new and creative ways to advertise airfares, some of which circumvent the 

spirit if not the letter of the full-price advertising rule and Department enforcement policy.'* Id. 

A review of the enforcement orders issued by the Department demonstrates this point, that is, 

that the landscape relating to airfare advertising has changed since 2006 when the Department 

withdrew a notice of proposed rulemaking ("NPRM'*) in which it considered eliminating the 

taxes and fees exception. From 2(X)1 to 2(X)6, the Department issued 56 enforcement orders 

relating to advertising, with assessed penalties of $1,877,(X)0. This is contrasted with the past 

three and a half years (2007 through July 11, 2011), during which the Department has issued 52 

advertising orders with assessed penalties totaling $2,656,(X)0. The increase in enforcement 

orders concerning advertising is related to the technological innovations mentioned in the 

NPRM, including the increased use of the Internet and other means used for searching for 

airfares."* In 2006, two of die advertising orders issued by the Enforcement Office dealt with 

Internet advertising. That number has steadily increased over the last three years: in 2(X)7, fom* 

orders dealt with internet advertising; in 2(X)8, ten orders; in 2009, eight orders; in 2010, sixteen 

orders; and. so far in 2011, twelve orders. With the advent of mobile technology, Twitter, 

Facebook, and other methods to advertise fares, there is an even greater likelihood that carriers 

and ticket agents will find new and creative, and in some cases deceptive, ways to advertise 

airfares further circumventing the Department's enforcement policy. 

In addition to the reasons mentioned above for changing the Department's price advertising 

policy, the Department's regulatory evaluation explains that consumers are likely to benefit in 

several ways from a requirement that the price advertised include govenmient taxes and fees. 

"The first benefit is the time saved for those consumers beginning a ticket purchase that is later 

abandoned once the fiill fare is known. These beneficiaries see a fare advertised (in print, on 

television, etc.) that does not include all taxes and fees and decide to make the effort to purchase 

^ For example, in 2008, the Department issued an order assessing a compromise civil penalty of $50,000 

against Allegiant for not including convenience fees in initial base fares displayed in website advertisements despite 

such convenience fees being mandatory for on-line bookings. Similarly, in 2009, the Department issued an order 

assessing a compromise civil penalty of $375,000 against Spirit for a number of violations of our consumer 

protection regulations, including its display of fares on its website that did not include certain carrier-imposed fees 

in the advertised "base fare." Both carriers were directed to cease and desist from future similar violations. See 

Allegiant Airlines (Order 2008-9-18, September 15. 2008) and Spirit Airlines (Order 2009-9-8, September 17, 

2009). 
a ticket based on the advertised price, only to find that the full-fare price is 'too high' and no 

longer worth purchasing.'* Final Regulatory Analysis, Consumer Rulemaking: Enhancing 

Airline Passenger Protections II, p. 56. The regulatory evaluation also notes that "passengers 

who purchase tickets from websites that did not previously present full fares up front will benefit 

by (1) saving time that would previously have been spent searching for the full fare on single or 

multiple websites to be able to compare full-fare prices or (2) avoidmg being attracted by lower, 

incomplete fares and then not fully taking into account the full fare when it is subsequently 

revealed, which in turn may lead to less than optimal purchasing decisions." Id 

Although Petitioners assert that the agency had an insufficient basis for concluding that the new 

policy would reduce customer search times, they failed to provide conmients on the preliminary 

regulatory analysis that dealt with this issue, which was posted in the rulemaking docket on Jime 

2, 2010. In the preliminary regulatory analysis, we stated that we are expressly soliciting 

comments on the estimated benefits for this provision "including the average search time saved 

for passengers who already search for full fare information; the percentage of passengers who 

spend time searching websites to fmd full fare ticket information; the percentage of online ticket 

purchasers who purchase only from websites that provide full-fare pricing up-front; the 

percentage of passengers who are fully aware of added fees and taxes when purchasing tickets 

from travel sites that do not automatically display that data up front...." Preliminary Regulatory 

Analysis, Consumer Rulemaking: Enhancing Airline Passenger Protections II, pp. 42-43. The 

Petitioners declined to take advantage of this opportunity and yet would now deny this protection 

to all consumers on the basis that it would allegedly harm these two carriers' commercial 

opportunities. 

In sum, the requirement that the price advertised include all mandatory fees including 

government taxes and fees does not violate the First Amendment and is not arbitrary and 

capricious, but a measured response to the need to prevent misleading and deceptive 

advertisements. Thus, the Department concludes diat Petitioners have not demonstrated a 

likelihood of success on the merits with respect to this provision of the final rule. 

Allowing Reservations to Be Held at the Quoted Fare 

Petitioners also assert that the Department exceeded its statutory authority when it required 

carriers to permit consumers to hold fares without payment or cancel without penalty for at least 

twenty-four hours after the reservation is made if the reservation is made one week or more prior 

to a flight's departure. The carriers argue that this requirement is a form of fare regulation 

eliminated by the Airline Deregulation Act. The carriers also contend that the decision to impose 

such a requirement is arbitrary and capricious as the Department failed to provide an explanation 

for why the practice of not offering such reservations is per se unfair or deceptive. 

Although the Airline Deregulation Act phased out regulation of domestic airline rates and routes, 

Congress did not discontinue the govenmient's role and authority to protect consumers from 

unfair or deceptive practices. Indeed, the House Report accompanying the Civil Aeronautics 

Board ("CAB") Sunset Act, which transferred the responsibility for protecting consumers from 

the CAB to DOT, stated that a continuing government role to protect airline consumers was 

necessary because "[tjhese problems involve important issues of health, passenger comfort, and 
social policy, and in these limited areas the solutions reached by the marketplace are not always 

acceptable." GAO Report, Airline Competition: DOT's Implementation of Airline Regulatory 

Authority (June 1989), p. 39. 

The customer service standards in the final rule, including the requirement for airlines to allow 

passengers to hold a reservation without payment or cancel without payment for twenty-four 

hours if the reservation is made one week before travel, were put in place by the Department 

because it found that the solution reached by the marketplace in this area was unfair or deceptive. 

In 2009, the Department issued a final rule which required, among other things, that U.S. carriers 

adopt customer service plans that address "allowing reservations to be held or cancelled without 

penalty for a defined amount of time." 74 Fed. Reg. 68983 (Dec. 30, 2009). This rule became 

effective on April 29, 2010. However, after reviewing carriers* customer service plans, we 

concluded that the protections afforded consumers in that final rule were not sufficient. In 

particular. Spirit and Allegiant and a few others did not adopt plan provisions to effectuate the 

intent of the rule. 

We found that some carrier plans, though arguably in compliance with the original rule, were 

unfair in that they did not provide adequate protection to consumers or were deceptive in that 

they were vaguely written, making it difficult for a consumer to know exactly what a carrier was 

committing to do. For example, Allegiant states in its customer service plan that it does not 

allow reservations to be held without full payment being made at time of booking. In the same 

plan, Allegiant states that customers can cancel then- reservations up to 24 hours before the 

scheduled time of departure, but fails to mention that there are significant fees associated with 

cancellation or that the remaining fimds are returned only as a credit voucher for future travel on 

Allegiant to take place no later than one year from the date the original itinerary was booked. A 

customer needs to review various sections of Allegiant's terms and conditions of travel to 

ascertain the fees that will be deducted from the amount of the credit voucher: a cancellation fee 

of $50 per segment, per person, a convenience fee of $16.99 per traveling passenger for 

purchases that are not made at any of Allegiant's ticket offices, and an additional $ 14.99 per 

segment, per passenger for purchases made through an Allegiant Air Call Center. For example, 

if a family of four had a round-trip ticket consisting of two nonstop Allegiant flights that they 

purchased online, the cost of cancellation for them would be $467.96. If the same family of four 

had purchased the ticket through the call center, the cost of cancellation would increase to 

$587.88. This significant cancellation fee cannot be gleaned from a review of Allegiant's 

customer service plan. 

Moreover, we view it as an imfair and deceptive practice not to provide a "cooling off period*' 

for the purchase of airline tickets. As we noted in the NPRM, Congress modeled the 

Department's statutory authority under 49 U.S.C. § 41712 to prohibit imfair and deceptive 

practices on section 5 of the Federal Trade Commission (FTC) Act, 15 U.S.C. § 45. See 15 Fed. 

Reg. 32318, 32328 (June 8, 2010). The FTC has a three day cooling off rule for sales made at a 

location that is not the seller's permanent place of business.** In addition, some states have 

•* Since i 972, the FTC has had a requirement for a three day cooling-off period for sales of $25 or more made 

at a location that is not the seller's permanent place of business {e.g., sales at the buyer's residence or at facilities 

rented on a temporary or short term basis, such as hotel or motel rooms, convention centers, fairgrounds and 

restaurants, or sales at the buyer's workplace or in dormitory lounges). 16 C.F.R. § 429.0(a). 
instituted cooling off periods for a variety of other purchases.^ The FTC promulgated its cooling 

off rule to prevent customers from being pressured into making unwanted purchases. See 37 

Fed. Reg. 22937-40 (Oct. 26,1972). Similarly, we are requiring a cooling off period for airline 

ticket purchases to prevent consumers from being rushed/pressured into making imwanted 

purchases. A cooling off period allows consumers to check for lower fares and gives them time 

to coordinate their other travel arrangements without losing a quoted fare. It is also worth 

noting that the carriers and not the passenger determine the methodology that will be used to 

hold an airfare reservation: the reservation is held without payment or the reservation is held 

with payment which the carrier must refimd without penalty if requested within 24 hours. 

As for the argument that the requirement for airlines to allow reservations to be held at the 

quoted fare is arbitrary and capricious, we note that we explained our reasoning for this 

requirement in the notice of proposed rulemaking. We stated that "many carriers* customer 

service plans are not specific enough for a consumer to have realistic expectations of the types of 

services a carrier will provide imder its plan, or that some carriers may not be living up to theu" 

customer service commitments.'* 75 Fed. Reg. 32318, 32323 (June 8, 2010). We elaborated 

further that "when determming what minimum standards to apply to these plans, the Department 

reviewed customer service plans as currently implemented by a number of carriers, and chose the 

services already provided by some carriers that appear to be 'best practices.' *' Id. 

Also, despite arguments to the contrary by Petitioners, the final rule addresses the substantial 

objections and concerns raised in the rulemaking docket regarding the impact of this provision. 

In fact, we agreed with the comments of the carriers who suggested that, should we adopt this 

provision, we should establish a point in time after which carriers are no longer required to 

follow the "twenty-four hour" rule as it "could result in loss of sales and revenue by carriers and 

prevent other passengers from purchasing the seat if the seat is not released in a timely maimer 

prior to die flight." 76 Fed. Reg. 23110, 23129 (Apr.25, 2011). As such, we modified the 

provision so that the requirement to hold the reservation for twenty-four hours does not apply 

during the last seven days before a flight. This modification strikes a balance between 

consumers' needs to make travel plans and shop for a fare, and the carrier's need for adequate 

time to sell seats. 

In sum, the requirement to hold an airfare without payment for 24 bom's if a consimier makes the 

reservation one week or more prior to a flight's scheduled departure is not a form of fare 

regulation eliminated by the Au:lme Deregulation Act and is not arbitrary and capricious, but 

rather a measured response to prevent an unfair and deceptive practice. As a result, the 

Department concludes that the Petitioners have not demonstrated a likelihood of success on the 

merits on this issue. 

' For example, the State of Washington has several buyer's remorse laws that protect customers. You can cancel 

health club memberships within three days of signing up in Washington. The State of Tennessee is another example 

of a state with multiple buyer's remorse laws: Tennessee provides consumers with IS full business days to cancel 

camping club or vacation club contracts. 
Post Purchase Price Increases 

Petitioners maintain diat the Department's decision to prohibit post-purchase price increases for 

services and products not purchased with the ticket is arbitrary and capricious. This includes, but 

is not limited to, fees for checked baggage, carry-on baggage, meals, advance or upgraded 

seating assignments, canceling or changing reservations, and pet transportation. As support, the 

carriers claim that the Department has not found that carriers have engaged in such practices, has 

not articulated a rational basis for deeming such charges to be unfair or deceptive and has not 

explained the reasons that flex-fares would be unfair or deceptive. 

However, the carriers provide little evidence to support their claims. The fact that the 

Department has not found Uiat carriers are currently engaging in post-purchase price increases 

does not mean that carriers will not do so in the future. Indeed, it appears that based on Spirit's 

and Allegiant's lawsuit challenging this provision that the carriers would like to engage in such a 

practice by increasing the price of ancillary services and products not purchased with the ticket. 

Further, the Department articulated a rational basis for deeming such charges to be unfair or 

deceptive in the NPRM. The Department explained that "[cjonsumers are not made aware of the 

potential for a price increase at the time of purchase, and therefore are deceived when the 

increase is imposed and the seller uses the terms of the contract of carriage to justify an 

additional collection." 75 Fed. Reg. 32318, 32330 (June 8, 2010). When purchasing tickets, 

passengers are interested in not only the price of the fare but also the price for ancillary services 

and products.* 

The presence or absence of a fee for a certain service or product, along with the amount of such 

fee, influences a customer's purchasing decision. For example, consider a consumer who 

purchases non-refundable tickets for a family of four, based on the carrier's representation at the 

time that baggage is free, and the carrier subsequently changes its policy and introduces a bag 

fee. That family could suddenly be paying hundreds of dollars more than they anticipated. 

Consider also this same consumer having purchased four tickets but deciding not to pay a first 

checked bag fee of $25 at the time of purchase because the first checked bag fee at that time is 

$35 if purchased at the airport. The carrier subsequently changes its first checked bag fee policy 

so that it is $100 if purchased at the airport. This consumer may have made the decision to fly 

wiUi a different carrier or pay the bag fee at die time of ticket purchase had he or she known of 

the actual baggage fees that would have applied. Imposition of post-purchase fees and fee 

increases makes it difficult if not impossible for consumers to make decisions rationally as they 

lack adequate information to do so. 

We also want to point out that the prohibition on the imposition of post-piu-chase fees and fee 

increases for ancillary services codifies the existing enforcement policy that carriers and agents 

cannot increase the price of baggage after the purchase of the underlying air transportation and 

* According to a survey of 1, 396 air travelers conducted by the Consumer Travel Alliance from August 20-

31,2010, two out of every three air travelers say they have been surprised at the airport by unexpected fees for 

things such as checked bags, requesting a seat assignment, getting extra legroom, or flying standby. Nearly two out 

of three (65%) also stated that such fees placed some or a great deal of unexpected financial strain on their budget 

for the trip. See Things that Annoy Travelers Most: Consumer Reports Survey Results. Consumer Travel Alliance 

Comment on Rulemaking, DOT-OST-20 lO-0140-1710. 
expands this protection to other types of ancillary services and products. In 2008, the 

Department*s Aviation Enforcement Office issued guidance concerning the disclosure of 

baggage fees to the public. In that notice, the office stated that "[ijn no case should more 

restrictive baggage policies or additional charges be applied retroactively to a consumer who 

purchased his or her ticket at a time when the charges did not apply, or when a lower charge 

applied." Notice of the Assistant General Counsel for Aviation Enforcement and Proceedings, 

Guidance on Disclosure of Policies and Charges Associated with Checked Baggage, May 13, 

2008, available at http://airconsumer.dot.gov/rules.guidance.htm . Even before the recently issued 

final rule, a carrier had the obligation under the enforcement policy not to change the baggage 

fees between the date of purchase and day of flight. Carriers, including Petitioners, have been 

complying with this requirement and continue to do so. 

The final rule also does not impose any new obligation on carriers with respect to flex-fare 

tickets although the Petitioners appear to believe it does. As we understand it, flex-fare tickets 

would allow consumers to choose between a traditional "locked in" fare that would not fluctuate, 

and a lower fare that could change before the date of travel. In Allegiant's comments, submitted 

to the rulemaking docket well after the date by which such comments were due, it mentions that 

it is considering this new pricing option for its website and urges the Department to allow 

carriers to implement such a pricing structure. Because Allegiant filed its comments many 

months after the close of the comment period, the Department was unable to fully consider its 

suggestion As such, the Department's rule banning post-purchase price increases does not 

address this issue at all ~ it does not explicitly allow or prohibit this type of practice. It appears 

that the practice as described in Allegiant's comment would be an unfair and deceptive practice 

in violation of 49 U.S.C. § 41712 as it does not appear that there is a mechanism available for the 

consumer to know when die price will mcrease. Shortly after Allegiant's comment, a consumer 

advocacy group also submitted comments to the rulemaking docket. AirlinePassengers.org 

expressed its view that Allegiant's proposal is "[ajnother step backward from true transparency 

for consimiers." This organization noted its deep concern about the "impossible-to-determine 

total cost because Allegiant would determine that total cost on its own" and described 

Allegiant's new pricing option as "an effort to have DOT approve shifting normal airline 

business risk onto the consumer" See AurlinePassenger.org letter to DOT dated February 28, 

2011, DOT-OST-2010-0140-2041. In any event, because the flex-fare pricing structure is not 

addressed in the rule, a stay in the rule would have no impact on this matter. 

For the reasons described above, the Department's decision to prohibit post-purchase fees and 

fee increases for services not purchased with the ticket is not arbitrary and capricious, and the 

Department has acted well within its statutory authority in imposing this prohibition. Nothing in 

the final rule tells carriers what they can charge for, or how much they can charge for it. The 

final rule simply requires that carriers notify consumers of existing charges at time of purchase 

and honor those commitments. The final rule also doesn't address the flex fare pricing structure 

as Petitioners contend. Thus, the Department finds that Petitioners have failed to demonstrate a 

likelihood of success on the merits on this issue. 
10 

Baggage Fee Information on E-Tickets and Other Electronic Confirmations 

Petitioners argue that the Department acted arbitrarily and capriciously by requiring carriers to 

provide individualized baggage charge information on e-ticket and other electronic 

confirmations. As support for this argument, the carriers claim that the Department failed to 

explain how current practices regarding the disclosure of baggage allowances and baggage 

charges are unfair or deceptive. In addition, the carriers question the legality of permitting 

agents but not airlines to provide this information via a link to the baggage fee page of a carrier 

website. Also, presimiably as fijrther support for its contention that the Department overstepped 

its statutory authority and acted arbitrarily and capriciously, while acknowledging that the rule 

provides information about the benefits associated with this provision the carriers note that these 

benefits are not quantified. 

First, the Petitioners are mistaken in then: belief that the rule requires individualized baggage 

charge information on e-ticket and other electronic confirmations. The rule states that, on all eticket confirmations, including the summary page at the completion of an online purchase, 

carriers must provide information regarding the free baggage allowance and fee for a carry-on 

bag and the first and second checked bag "as specific charges taking into accoimt any factors 

(e.g., frequent flyer status, early purchase, and so forth) that affect those charges." 76 Fed. Reg. 

23110, 23166-67 (Apr.25, 2011). We used the term "specific charges" to ensure that die 

regulated entities understood that a range of fees would not be acceptable under the rule. In 

other words, carriers must provide specific information to consumers about all the factors that 

cause the fee for a carry-on bag or the first and second checked bag to vary so passengers can 

determine for themselves the fees that would apply to them. For example, it would not be 

sufficient for a carrier to state that the fee for the first checked bag ranges from $0 to $50, 

However, it would acceptable if the carrier states that the fee for the first checked bag would be 

$0 for its elite frequent flyer passengers or those with a specified credit card, $25 for passengers 

who purchase it online, and $50 for those passengers who pay at the airport. Of course, carriers 

are free to provide individualized baggage charge information to passengers but this is not 

required by the rule. 

Despite assertions to the contrary from the Petitioners, the Department has provided an 

explanation regarding how the current practice regarding the disclosure of baggage allowances 

and baggage charges are unfah and deceptive. Presently, carriers do not provide consumers with 

information regarding their free baggage allowance or fees for checked and carry-on baggage on 

e-ticket confirmations. The Department has stated on more than one occasion that it views 

checked or carry-on baggage as being "fundamental to air travel." 76 Fed. Reg, 23110, 23148 

(Apr.25, 2011). Individual commenters on the proposed rule noted being "surprised by 

additional baggage fees when they check-in at the airport." Id. The Consumer Travel Alliance 

also submitted comments stating that it "found that 66 percent of passengers were surprised by 

airline fees at the airport and 65 percent said these fees caused imexpected financial strain." See 

Consumer Travel Alliance letter to DOT dated September 20, 2010, p. 11, DOT-OST-2010-

0140-1507. We view the lack of disclosure to consumers about cany-on baggage and first and 

second checked bag fees in text form in the e-ticket confirmation in advance of check-in to be an 

imfatr and deceptive practice. We do permit ticket agents, unlike carriers, to provide the requured 

notice of applicable baggage charges through a hyperlink "to the locations on the airiine websites 
11 

where specific information may be obtained since the airiines often update and change fees.*' Id 

at 23147. 

As for the cost-benefit analysis for this provision, die Petitioners appear to argue that the 

Department exceeded its statutory audiority because the Department estimated compliance costs 

of $8 million but did not quantify the benefits. The Petitioners acknowledge Uiat the 

Department has described qualitative benefits for this provision in the rule and die Final 

Regulatory Analysis accompanying it. Executive Order 12866 does not mandate that an agency 

rely only on benefits or costs that it can quantify. It is perfectly reasonable and acceptable for an 

agency to also address and consider costs and benefits that cannot be monetized.^ See OMB 

Circular A-4. 

For the reasons described above, the Petitioners fail to demonstrate that the Department's 

decision to require carriers to provide specific baggage fee information on e-tickets and other 

electronic confirmations oversteps its statutory authority and is arbitrary and capricious. 

Therefore, the Department concludes that the Petitioners have not demonstrated a likelihood of 

success on the merits with respect to this provision of the final rule. 

Flight Status Notifications 

Petitioners are claiming that the Department's decision to require flight status notifications is 

arbitrary and capricious because the Department gave smaller carriers reason to believe the 

requirement would not apply to them and because the Department's regulatory analysis fails to 

address the cost impacts associated widi diis requirement. The carriers also assert that flight 

cancellations and delays will increase imder the rule, as they appear to believe the rule requires 

notification about tentative cancellations and delays. 

We reject the assertion diat the Department gave smaller carriers reason to believe a requirement 

to provide information about flight status changes to passengers and members of the general 

public would not apply to diem. Aldiough die Department stated that it was "tentatively" of die 

opinion that the costs of this provision for smaller carriers outweighed the benefits to consumers, 

it invited comments on whether this requirement should be applied to smaller U.S. carriers and 

foreign carriers and asked for information on die cost and benefit of expanding coverage to diese 

carriers. See 75 Fed. Reg. 32318, 32331 (June 8, 2010). Indeed, the Department received 

comments from various organizations and individuals on diis point. The New York State 

Consumer Protection Board, Association of Airlme Passenger Rights, Flyersrights.org, 

Consumers Union, various commenters on RegulationRoom.org, and Airports Council 

International-North America (ACI-NA) all submitted comments supporting expanding the 

proposed coverage of this rule to smaller U.S. carriers and foreign carriers. ACI-NA specifically 

points out diat delays and cancellations by smaller carriers who mainly serve small and non-hub 

airports can have severe adverse effects on connection hubs. The Department sees no reason for 

smaller carriers to conclude that the Department had ruled out applying this provision to them. 

OMB Circular A-4 states that "You should monetize quantitative estimates whenever possible. Use sound 

and defensible values or procedures to monetize benefits and costs, and ensure that key analytical assumptions are 

defensible. If monetization is impossible, explain why and present all available quantitative information." (p. 19). 
12 

We also reject the argument that the Department did not weigh the relative costs and benefits of 

requiring flight status notifications of smaller carriers. We note that both Petitioners failed to 

comment on the flight status notification provision in the NPRM despite the Department 

specifically soliciting comment on "whether the regulation should cover a greater number of 

carriers and operations, including operations of smaller U.S. carriers and/or international 

operations of U.S. and foreign carriers" and "[w]hat would be the cost or benefit of expanding 

coverage to diose additional carriers?" 75 Fed. Reg. 32318, 32331 (June 8, 2010). The 

Department made a determination to apply the flight status notification requirement to smaller 

U.S. carriers and foreign air carriers because it concluded that the unquantifiable benefits 

outweighed the imquantifiable costs based on all the information available to it. 76 Fed. Reg. 

23110, 23158 (Apr. 25, 2011). More specifically, die Department explained diat "monetized 

estimates could not be developed from the information available on the record** for the 

requu-ement to provide prompt passenger notification of flight status changes. Id. However, it 

added that there are "lajdditional imquantifiable benefits that are dkectly or indirectly related to 

this rulemaking, which result in benefits that the Department has determined justify the costs." 

It identified this unquantifiable benefit as the benefit to consumer from "tg]reater comfort and 

certainty from knowing that information will be available in a timely maimer." Id. Put another 

way, consumers should not be left with critical schedule information related to their trip that the 

carrier knows is false. 

The Department further explained the qualitative benefit of die rule by stating that "[t]he need 

for, and importance of timely notification regarding flight delays, diversions or cancellations 

exists whether it is a U.S. or foreign carrier operating die flight and whether it is a non-reporting 

or reporting carrier operatmg the flight." Id at 23154. As for the cost, the Department states that 

it expects that "foreign carriers and non-reporting U.S. carriers will work with their code-share 

reporting-carrier partners, most of which have the necessary systems in place, to comply with the 

notification requirements contained in this final rule." Id. While we recognize that Petitioners do 

not code-share with the reporting carriers, we do not expect diese carriers or other small carriers 

to be starting from scratch to comply with this requirement as they already address notifymg 

consumers of known delays, cancellations, and diversions in their customer service plans as 

required by the prior consumer rule. 

Petitioners also seem to misunderstand the flight status notification requirements, which may be 

the reason they believe the cost impact is much larger than it actually is. The carriers 

mistakenly believe the final rule requures carriers to notify passengers and the public of "tentative 

delays or cancellations." In the NPRM, we proposed to require carriers to provide notifications 

in situations where the carrier becomes aware or should have become aware of a flight status 

change. Many carriers challenged the "should have known" standard, arguing that it is difficult 

to comply with this standard. The Department agreed with commenters diat this proposed 

standard would have created uncertainties and did not include it in the final rule. Under the final 

rule, carriers are only required to notify passengers and others of any "known" delay, diversion, 

and cancellation. We do not consider a carrier to be aware of a delay or cancellation when the 

carrier is still in the process of determining whether such a change may occur. Carriers are also 

free under the rule to notify passengers that a delay or cancellation may have to occur, if the final 

decision has not as yet been made. 
13 

tn sum, the Department's decision to require smaller carriers to provide information about flight 

status changes is not arbitrary and capricious, as die Department solicited comments on whether 

this requirement should be applied to smaller U.S. carriers and considered the cost impacts to 

them. Thus, the Department concludes that Petitioners have failed to demonstrate a likelihood 

of success on the merits on this issue. 

U. Petitioners Have Not Demonstrated That Thev Would Suffer Irreparable Harm in 

the Absence of a Stav 

In order to obtain a stay. Petitioners must also demonstrate that they will suffer irreparable harm 

absent a stay of the effective date of the amendments pending judicial review. Irreparable injury 

is the essential predicate for a request for a stay of agency action pending review. 5 U.S.C. § 

705. hideed, "[t]he basis for injunctive relief in the federal courts has always been irreparable 

harm and inadequacy of legal remedies." Sampson v. Murray, 415 U.S. 61, 88 (1974), quoted in 

Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir. 1985). 

Petitioners' contentions of ureparable harm rest in part on their claim that a violation of the First 

Amendment automatically results in irreparable harm. However, when the irreparable harm 

alleged "is inseparably linked" to a claim of a First Amendment violation, the irreparable harm 

determination first requires an analysis of Petitioners* likelihood of success on the merits. See, 

e.g., Newsome v. Albemarle County School Board, 354 F.3d 249, 254-55 (4di Cir. 2003); 

Giovani Carandola, Ltd. v. Bason, 303 F.3d 507, 511 (4di Cir. 2002). Here, Petitioners cannot 

simply assert a "per se" finding of irreparable harm because, as set forth above, they have failed 

to establish a likelihood of success on the merits of their First Amendment claim under Central 

Hudson Gas & Elec. Corp. v. PublicServ. Comm'n ofN.Y., 447 U.S. 557 (1980) and its progeny. 

Petitioners also allege they will suffer irreparable economic injury in die form of compliance 

costs, lost opportunity costs, and damage to dieir corporate system/identities unless there is a stay 

of the effective date pending judicial review. The D.C. Circuit imposes "a high standard for 

irreparable injury." Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. 

Cir. 2006). "ITjhe injury 'must be both certain and great; it must be actual and not theoretical." 

Id. (quoting Wise. Gas Co., 758 F.2d at 674), Also,"[t]he moving party must show '[t]he mjiu^ 

complained of is of such imminence that there is a 'clear and present' need for equitable relief to 

prevent irreparable harm.'" Id. (citations, brackets, and internal quotation marks omitted). 

Under this standard, Petitioners have failed to meet their burden. Without providing supporting 

evidence. Petitioners contend that they will suffer irreparable harm because diey "will be forced 

to dramatically change or abandon the marketing, distribution and pricing models that allowed 

them to keep ticket prices low." They assert that non-refundable tickets and flexibility in 

ancillary fees and services are essential to keeping Petitioner's ticket prices low and differentiate 

them from odier carriers. They also mention Spirit's $9 Fare Club program and state that die fare 

advertising rule would have significant negative impact on this program as it would require the 

carrier to include government taxes and fees and if purchased on the internet a convenience fee 

which would "reduce Spirit's subscription revenues and force ticket prices to rise." Petitioners 

add that "tajdvertising low base fares is essential for attracting customers and increasing demand 
14 

in the market served." They argue that the rule leaves "little distinction between the low fare 

carriers and legacy carriers." 

We find the Petitioners arguments to be seriously flawed and reject their claim that they will 

suffer irreparable economic harm for various reasons. The fare advertising rule doesn't cause 

ticket prices to rise - the passenger would have had to pay for the government taxes and fees and 

if purchased on the uitemet a convenience fee (in Spirit's case) whether or not the full fare 

advertising rule existed. The full fare requirement simply ensures the passenger is aware of the 

total ticket price earlier. As for the argument diat displaying the full fare could reduce Spirit's 

subscription revenues, we agree that it is possible that a passenger may not be as interested in the 

$9 Fare Club program when they realize that the actual cost of travel is more than $9. However, 

the impact of the full fare advertising rule on Spirit for its $9 Fare Club program is no different 

than the impact on other carriers, including legacy carriers, who would also be required to 

display all the mandatory fees associated with air travel m the ticket price. This was fully 

considered in the Department's regulatory evaluation. Indeed, we noted that one of the benefits 

of the full fare advertising rule is "the time saved for those consumers beginning a ticket 

purchase that is later abandoned once the full fare is known." We explain that diese mdividuals 

"see a fare advertised (in print, on television, etc.) that does not include all taxes and fees and 

decide to make the effort to purchase a ticket based on the advertised price, only to find that die 

full-fare price is 'too high' and no longer worth purchasing." Final Regulatory Analysis, 

Consumer Rulemaking: Enhancing Airline Passenger Protections II, p. 56. 

Petitioners also assert that the new rules will require them to make unspecified "significant 

changes to their websites and the way they communicate with their customers." Absent any 

explanation or evidence of the nature of the required changes. Petitioners' assertions are entitled 

to little weight. While we acknowledge that the rule requires some changes to advertising 

practices, it is far from self-evident that there would be a dramatic cost associated with altering 

web sites to alert customers earlier in the purchase process of taxes and fees that already must be 

calculated, disclosed, and collected at die time of purchase. We noted in the preamble to the 

April 25, 2011 rule that "sellers of air transportation are constandy updating their fare matrices 

and die mediods by which diey display fares." See 76 Fed. Reg. 23143 (Apr. 25, 2011). hi 

addition, we are now givmg carriers until January 24, 2012 (9 mondis from the date the final rule 

was issued) to comply widi the full-fare advertising provisions, allowing them to use their 

business judgment to determine the most cost-effective time and maimer to make any necessary 

adjustments. 

We also find unpersuasive the assertion that the final rule will necessitate a change in the 

marketing, distribution and pricing models that allowed Petitioners to keep ticket prices low. 

Again, the Department's full fare advertising rule does not increase ticket prices but requires 

disclosure of the actual ticket prices. With respect to ancillary services and fees, nothing in the 

rule tells a carrier what kind of ancillary service or product they can have or how much they can 

charge for it. The rule simply requires that carriers notify consumers of existing charges at time 

of purchase and honor those commitments. Also, Petitioners did not provide any evidence that 

diey will suffer irreparable harm related to holding a reservation for twenty-four hours without 

payment or refunding a pajmient upon request within 24 hours of the sale. The Department 

already addressed the cost concerns regarding this provision by establishing a point in time after 
15 

which carriers are no longer required to follow the "twenty-four hour" rule as it '*could result in 

loss of sales and revenue by carriers and prevent other passengers from purchasing the seat if the 

seat is not released in a timely maimer prior to the flight.'* 76 Fed. Reg. 23110, 23129 (Apr.25, 

2011). 

Petitioners' allegations do not establish irreparable harm under the high standards required by 

applicable law. Accordmgly, the Department finds that Petitioners will not suffer irreparable 

harm in the absence of a stay pending judicial review. 

III. Substantial Harm to Other Parties Would Occur If a Stav Is Granted, and Issuance 

of a Stav Would Harm the Public Interest 

Petitioners must further demonstrate that no other parties will be harmed if a stay is granted, and 

that a stay would serve the public interest. Petitioners argue that a stay would not impose any 

substantial harm on any other person and that a stay would serve the public interest by 

maintaining existing consumer protection rules and practices in place pending judicial review. 

These factors tip decisively in favor of denying a stay. Beyond the interests of Allegiant Air and 

Spirit Airlines, who disagree with the rule amendments. Petitioners fail to demonstrate how a 

stay would not harm other parties and serve the public interest. Here, die government shares 

with the public a strong interest in timely implementation and enforcement of air passenger 

consimier protection regulations. The Department is not persuaded, as Petitioners contend, diat 

the public will be confused if the amendments change as a result of judicial review, or that the 

public will benefit by air carriers' contmued deceptive practices. To the contrary, the interests of 

odier parties and the public are best served by enhancing protecdons for airlines passengers as 

set forth in the final rule. Airlines and sales agents currently have widely varying practices 

regarding which taxes and fees are included in quoted prices, and Petitioners fail to explain how 

obtaining consistency would confuse, rather than aid, consumers. 

Moreover, if the Department were to issue a stay that would delay implementation of the 

amendments beyond the new effective dates, airline passengers will suffer injury by the practices 

that the amendments seek to eliminate in the air travel environment. See, e.g., Serono 

Laboratories, Inc. v. Shalala, 158 F.3d 1313, 1326 (D.C. Cir. 1998) (irreparable harm to plaintiff 

arising from challenged regulation, balanced against similar harm to a third party if the stay is 

granted, resulted in a '*wash" on the factor of irreparable harm). Accordingly, the Department 

rejects the contention that the issuance of a stay in this matter would not harm other parties and 

serve the public interest. 
16 

IV. Conclusion 

The Department has reviewed Petitioners* request for a stay of the effective date of the 

amendments, and finds that Petitioners have failed to satisfy any of the four criteria required for 

an agency to grant a stay pending judicial review. Accordingly, the Department finds that justice 

does not require a stay in this matter. 

Sincerely yours, 

Susan Kurland 

Assistant Secretary for 

Aviation and International Affairs