July 6, 2011 

By FedEx and Electronic Mail

The Honorable Ray LaHood 

Secretary of Transportation 

U.S. Department of Transportation 

1200 New Jersey Avenue SE 

Washington, DC 20590 

Re: Request to Postpone, or Stay, the Effective Date of Certain Provisions of 

the Enhancing Airline Passenger Protections Final Rule, 

76 Fed. Reg. 23,110 (Apr. 25, 2011)

Dear Secretary LaHood: 

INTRODUCTION AND REQUEST FOR RELIEF

Allegiant Air, LLC (“Allegiant”) and Spirit Airlines, Inc. (“Spirit”) (jointly, the 

“Petitioners”) have sought review of various amendments to 14 C.F.R. Parts 259 and 399 in the 

United States Court of Appeals for the District of Columbia Circuit. Spirit Airlines, Inc. v. DOT, 

No. 11-1219, D.C. Cir. (filed June 15, 2011), consolidated with Allegiant Air, LLC v. DOT, 

No. 11-1222, D.C. Cir. (filed June 16, 2011). These amendments were enacted in Enhancing 

Airline Passenger Protections, 76 Fed. Reg. 23,110 (Apr. 25, 2011) (the “Final Rule”). Pursuant 

to 5 U.S.C § 705 and Fed. R. App. P. 18, Petitioners respectfully request that the Department 

postpone, or stay, the effective date of the amendments pending judicial review. We ask that you 

respond by 5:00 p.m. on July 14, 2011. We will construe the absence of a response as a denial of 

this request and will proceed to seek a stay from the Court. 

In the Final Rule, the Department (1) reverses an almost-25 year policy permitting 

government taxes and fees to be stated separately from the base fare in airline advertising 

(§ 399.84(a)); (2) prohibits the sale of nonrefundable tickets purchased seven days or more 

before departure (§ 259.5(b)(4)); (3) prohibits post-purchase price increases, including increases 

to the price of ancillary services and products, made after the purchase of underlying air 

transportation (§ 399.88(a)); (4) dictates the manner in which baggage fees must be disclosed on 

e-ticket (electronic) confirmations (§ 399.85(c)); and (5) mandates when a carrier must 
The Honorable Ray LaHood 

Request for Postponement or Stay 

July 6, 2011 

communicate notices regarding flight changes, delays or cancellations to its customers 

(§ 259.8).1

These rules fall short of the procedural and substantive standards set forth in the 

Administrative Procedure Act (the “APA”), 5 U.S.C. §§ 551-559, 701-706. As explained in 

detail, they are arbitrary and capricious, not in compliance with procedures required by law, 

contrary to the governing statute—the Airline Deregulation Act of 1978 (the “Deregulation 

Act”)—and, most problematically, contrary to air carrier commercial free speech rights as 

protected by the First Amendment. In addition to imposing unreasonable implementation costs 

at a time of escalating fuel prices, these amendments threaten to seriously harm Petitioners’ 

business models, which are based on the existing rules, as well as harm the millions of 

passengers who travel on these carriers. For these reasons, justice requires that relief be granted. 

Petitioners request that the Department stay the effective date of the amendments until the 

judicial review proceedings are concluded in the Court of Appeals. 

BACKGROUND

Allegiant and Spirit are post-deregulation, low-cost carriers that cater to price-conscious 

and underserved consumers. These carriers contribute significantly to the Deregulation Act’s 

goal of an air transportation system relying on actual and potential competition to provide 

efficiency, innovation, and low prices.2

Allegiant is a Las Vegas-based, full-service travel company, whose unique business 

model makes it possible for travelers from small communities throughout the United States to 

reach major destinations like Las Vegas, Phoenix, Los Angeles, Orlando, Tampa/St. Petersburg 

and Ft. Lauderdale easily and economically. Allegiant now serves 63 small communities and 11 

other destinations using its fleet of full-sized (not regional) jet aircraft. On all routes, Allegiant 

offers low-fare nonstop service that can be bundled with hotel accommodations and other travelrelated services. Allegiant’s average base fare in 2010 was approximately $76 and, in the first 

quarter of 2011, this figure was $89. In 2010, Allegiant ranked number one for low-cost carriers 

in Aviation Week’s Top Performing Airlines study and ranked 25th on Fortune magazine’s 

Fastest-Growing Companies list. 

Spirit is an ultra low-cost, low-fare carrier based in Ft. Lauderdale that provides 

affordable travel options in the United States and between the United States and cities in Central 

and South America and the Caribbean. Its ultra-low cost carrier (ULCC) business model, 

instituted in 2007, allows it to offer the lowest possible fares combined with a range of optional 

services for additional fees, which provides price-sensitive travelers valuable flexibility in 

selecting the combination of services that best suits their needs. Spirit’s average passenger ticket 

revenue per segment in 2010 was approximately $77 and, in the first quarter of 2011, this figure 

 

1

 Allegiant did not include a challenge to § 259.8 in its petition for review. However, Allegiant did challenge the 

sufficiency and validity of the cost-benefit regulatory evaluation analysis of the Final Rule undertaken by the 

Department pursuant to applicable requirements. 

2

 49 U.S.C. § 40101(a)(12). 

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was only $82. On a regular basis, Spirit offers promotional base fares as low as $9 (plus 

applicable taxes and fees). 

Allegiant and Spirit have been successful principally due to their ability to innovate and 

market affordable base fares to very price-sensitive travelers. Offering affordable base fares with 

unbundled ancillary services allows Petitioners to stimulate demand in the markets they serve. 

This business model has enabled Allegiant to provide valuable service primarily to travelers 

from small communities who otherwise would be without nonstop air service and have only 

limited ability to connect through larger cities, at markedly more expensive fares. 

In order to compete with the legacy airlines, these low-cost carriers have relied on the 

Department’s prior policies regarding price advertising, refundability of tickets, and postpurchase price changes. Their rapid growth in recent years has been due largely to their ability 

to differentiate themselves from legacy carriers and to target markets that are underserved or 

feature largely high-fare service, generating new traffic that in many instances would not 

otherwise have traveled by air, if at all. The Final Rule threatens the carriers’ very way of doing 

business and ultimately will harm the public and the communities they serve. 

LEGAL ARGUMENT

Pursuant to APA, the Department may postpone the effective date of the rules “when the 

agency finds that justice so requires.” 5 U.S.C. § 705. In accordance with D.C. Cir. R. 18, such 

relief pending review is appropriate where (1) the moving party is likely to prevail on the merits; 

(2) the moving party will suffer irreparable injury if relief is withheld; (3) no substantial harm 

will come to other parties if relief is granted; and (4) a stay serves the public interest. See CSX 

Transp., Inc. v. Williams, 406 F.3d 667, 670 (D.C. Cir. 2005). DOT has applied this four-part 

test to prior requests to postpone the effective dates of final rules, e.g., Letter from Jim L. Swart, 

Director, Office of Drug and Alcohol Policy and Compliance, to William F. Sheehan, Counsel 

for BNSF Railway Company, Docket DOT-OST-2003-15245 (Oct. 30, 2008). 

I. Petitioners Are Likely To Succeed on the Merits. 

A reviewing court shall hold unlawful and set aside agency actions, findings and 

conclusions when they are (a) arbitrary, capricious, an abuse of discretion or otherwise not in 

accordance with law; (b) contrary to law or the Constitution; or (c) without observance of 

procedures required by law. 5 U.S.C. § 706(2)(A)-(D). The challenged rules fail one or more of 

these tests and, as a result, are likely to be set aside by the D.C Circuit. Because Petitioners are 

likely to prevail on the merits, and the carriers will be irreparably harmed if forced to comply, 

justice demands that the agency postpone the effective date of the rules pending judicial review. 

Spirit and Allegiant made clear in their comments in the underlying rulemaking that 

certain of the proposed rules were contrary to the purpose and spirit of the Deregulation Act, 

now codified at 49 U.S.C. § 40101. The Deregulation Act eliminated government control over 

carrier routes, pricing and services and promoted, to the maximum extent possible, competitive 

forces that would result in, among other things, entry by new carriers and innovation. Id.

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Importantly, Congress specifically directed the Department, in carrying out the agency’s 

regulatory functions, to foster the continued strengthening of small air carriers like Allegiant and 

Spirit. Id. In large part, the Deregulation Act has achieved those goals and spawned the birth 

and growth of carriers like Allegiant and Spirit, which have been market innovators and have 

made it possible for millions of passengers to enjoy low-fare travel. The rules impose 

requirements that directly affect the price of air travel and the services that carriers can offer. 

Since the Department has stifled innovation and competition without making any credible 

finding that the prohibited practices are unfair or deceptive, it has overstepped its statutory 

authority. 

In addition, the rules are arbitrary and capricious or are not in compliance with 

procedures required by law. The Department has not examined the relevant data, has relied 

heavily on a few anecdotal and unsubstantiated public comments and a highly flawed regulatory 

analysis,3 and has failed to articulate a satisfactory explanation for its action (i.e., a rational 

connection between the facts found and the choice made). See Motor Vehicle Mfrs. Ass’n v. 

State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). 

Also, the Department violated the APA’s notice-and-comment requirements, 5 U.S.C. 

§ 553, by failing to provide prior notice of its evidence purporting to establish the existence of 

consumer confusion, thus depriving Petitioners and other carriers of the meaningful opportunity 

to comment on the alleged evidence, including the final Regulatory Analysis, before the deadline 

for submitting comments on the Notice of Proposed Rulemaking.4 The APA requires an agency 

to make available to the public the data and information on which it relies in its rulemaking. Am. 

Radio Relay League, Inc. v. FCC, 524 F.3d 227, 236 (D.C. Cir. 2008) (“Under APA notice and 

comment requirements, among the information that must be revealed for public evaluation are 

the...data upon which the agency relies in its rulemaking.” Also, “[c]onstruing section 553 of the 

APA, the court explained long ago that in order to allow for useful criticism, it is especially 

important for the agency to identify and make available...data that it has employed in reaching 

the decisions to propose particular rules.”) (internal citations omitted); see also Am. Iron & Steel 

Inst. v. OSHA, 939 F.2d 975-1009-10 (D.C. Cir. 1991) (“OSHA’s reliance on the 1987 Dun & 

Bradstreet data without providing an opportunity for comment was improper.”). 

Because the Department purports to have based the Final Rule on evidence of consumer 

confusion, and minimal cost to the industry, the Department had an obligation under the APA to 

provide the evidence in the rulemaking record and to give interested parties a sufficient 

opportunity to examine and comment on it. For this additional reason, the Final Rule is deficient 

under the APA, and Petitioners are likely to prevail on the merits. 

3

 Among other deficiencies, the Department’s regulatory analysis failed to evaluate alternatives or no-regulation 

scenarios, as required by Executive Order 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993). The Econometrica, Inc. Final 

Regulatory Analysis was placed in the record only six working days before the Final Rule was issued which did not 

allow sufficient time for parties to review or comment on this document 

4 Enhancing Airline Passenger Protections, 75 Fed. Reg. 32,318 (June 8, 2010) (“NPRM”). 

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A. The Department’s Reversal of Its Enforcement Policy Regarding the FullFare Rule (§ 399.84) Violates Petitioners’ First Amendment Rights and is 

Arbitrary and Capricious. 

1. The Department Prohibition Against Truthful, Non-Deceptive Base Fare 

Advertising Violates Petitioners’ Commercial Free Speech Rights 

Protected By the First Amendment. 

 Truthful, non-misleading advertising is protected commercial speech under the First 

Amendment. Virginia State Pharmacy Bd. v. Virginia Citizens Consumer Council, 425 U.S. 

748, 765 (1976). The DOT may not regulate this speech unless it can show that (1) it has a 

substantial interest in restricting the speech, (2) the regulation in question directly advances the 

government interest, and (3) the regulation is narrowly tailored to serve that interest. See Central 

Hudson Gas & Elec. Co. v. Public Service Comm’n of N.Y., 447 U.S. 557, 566 (1980); Board of 

Trustees of the State University of New York v. Fox, 492 U.S. 469, 480 (1989) (discussing 

Central Hudson, 447 U.S. at 564-66). The Department has failed to meet this burden with 

respect to base fare advertising. 

The Department has not established a substantial interest in prohibiting base fare 

advertising. The Department has not established through evidence in the record that base fare 

advertising is misleading. Indeed the current enforcement policy enables the airlines to fully and 

fairly communicate important information to consumers about governmental charges affecting 

air travel. The Department itself has recognized, “passengers benefit from knowing how much 

they are paying to government entities apart from the fares they pay the carriers.” Order 88-8-2, 

3 (Aug. 2, 1988). The Department reiterated this conclusion in 2006. 71 Fed. Reg. 55,398 

(2006). 

The regulation does not advance DOT’s interest in preventing unfair or deceptive 

practices in a “direct and material” way. Rubin v. Coors Brewing Co., 514 U.S. 476, 487 (1994). 

The prohibition against base fare advertising creates consumer confusion rather than relieves it. 

Consumers are accustomed to seeing the actual price of a product or service displayed separately 

from government-imposed fees, as this has been the practice in the airline industry for nearly 25 

years and is the norm in virtually every other industry. 

Most importantly, the prohibition on base fare advertising does not represent a 

“reasonable fit” between the Department’s limited responsibility under the Deregulation Act of 

preventing unfair and deceptive practices and the means chosen to advance that responsibility. 

Fox, 492 U.S. at 480. Where disclosure can effectively achieve the government’s goal it is 

constitutionally preferable to prohibition. Pearson v. Shalala, 164 F.3d 650, 657 (1998). Clearly 

the Department’s goal of providing consumers with the total price of a ticket at the first point of 

contact is achieved through the current rule by requiring base fare ads to list governmentimposed taxes and fees separately and in a manner that is “clear and the total amount to be paid 

by the customer can be easily calculated,” 54 Fed. Reg. at 31,052, without suppressing truthful 

information about the base fare of an airline ticket. 

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2. The Department Reversal of Its Longstanding Airline Price Advertising 

Policy, on Which Petitioners Based Their Innovative, Consumer-Friendly 

Low-Cost Business Models, is Arbitrary and Capricious 

For almost 25 years, the Department has permitted carriers to quote advertised base fares 

separately from non-ad valorem government-imposed taxes and fees collected on a perpassenger basis, provided the existence and amount of such taxes and fees is disclosed in 

accordance with Department requirements. Among other advantages, this policy enabled 

customers to more readily see what they were paying the airline and what was paid to the 

government. Allegiant and Spirit developed their business models around the marketing of the 

base price charged by the carrier. Nearly all other air carriers—including Southwest Airlines, the 

largest domestic airline—advertise their products this way. Significantly, virtually all other retail 

and service industries also advertise prices without applicable government taxes and fees. 

Consumers readily understand such taxes and fees are charged separately from the price of 

virtually all goods and services they buy. For nearly the last 25 years, literally billions of 

passengers have seen these ads, purchased tickets and traveled—apparently without being 

confused about their airfares. Indeed, the original exception was created to prevent confusion. 

See Order 88-3-25 (March 10, 1988). 

Importantly, less than five years ago, the Department found the reasons for maintaining 

this policy “most compelling.” Price Advertising, 71 Fed. Reg. 55,398, 55,401 (Sept. 22, 2006). 

In deciding to withdraw a Notice of Proposed Rulemaking in which the Department considered 

eliminating the taxes and fees exception, the Department stated, “As enforced, § 399.84 protects 

consumers, facilitates price comparison, fosters fare competition, and affords sellers an 

appropriate degree of freedom to innovate.” Id. Nothing in the instant rulemaking record 

supports this abrupt reversal of longstanding policy heavily relied on by the entire airline 

industry. Given industry reliance—especially by low-fare carriers like Allegiant and Spirit—on 

the prior enforcement policy regarding taxes and fees, which the Department reaffirmed as 

recently as 2006, this was arbitrary and capricious. 

The Department has asserted in the Final Rule that the landscape relating to airfare 

advertising has changed since 2006, and has identified three recent innovations: (1) advertising 

via social media outlets such as Facebook and Twitter, (2) unbundling in connection with fees 

for ancillary services, and (3) offering routings with multiple connections that may increase the 

amount of taxes and fees a traveler has to pay. 76 Fed. Reg. at 23,143. 

Missing from the rulemaking record, however, is any explanation of how the advent of 

these innovations now renders a practice endorsed for more than two decades suddenly unfair or 

deceptive. By requiring carriers to bundle payments going to the government with the price 

going to the carrier, the rule makes it more difficult to compare the base price charged by carriers 

Speculative analysis in the Final Regulatory Analysis that changing this rule will save three 

minutes in search time for 0.74 percent of the passengers who traveled in 2010 hardly supports a 

finding of an unfair or deceptive practice.5 Because the Department failed to establish that its 

prior policy regarding the full-fare rule results in unfair or deceptive advertising, the decision to 

5 See Final Regulatory Analysis, Docket OST-2010-0140, 58 (Apr. 8, 2011). 

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eliminate its longstanding policy is arbitrary and capricious, and Petitioners are likely to succeed 

on the merits of this claim. 

B. The Department’s Decision to Require Carriers to Permit Consumers to 

Hold Fares Without Purchase or to Receive Cash Refunds Within 24 Hours 

of Reservation (§ 259.5)—a Form of Fare Regulation Eliminated by the 

Airline Deregulation Act—Exceeds the Department’s Authority and is 

Arbitrary and Capricious. 

With respect to § 259.5(b)(4), which requires carriers to permit consumers to hold an 

airfare without payment for 24 hours, or to receive a refund without penalty after purchase if 

requested within 24 hours, the Department has exceeded its statutory authority. As a direct result 

of this requirement, airfares will rise. Because this requirement is effectively a prohibited rules 

tariff and will directly affect the price of tickets, this requirement is a form of regulation that 

Congress eliminated in the Airline Deregulation Act. 

In addition, DOT has failed again to provide any explanation of how a carrier that offers 

a nonrefundable ticket (after having made clear to the consumer the ticket’s nonrefundable 

nature) has engaged in an unfair or deceptive practice. In the Final Rule, the Department 

recounts in some detail the objections raised by various carriers with respect to this requirement, 

76 Fed. Reg. at 23,125-26, but provides no substantive response to these objections. Indeed, the 

Department’s Final Regulatory Analysis baldly attempts to justify the new mandate for every

carrier by simply asserting that “most reporting U.S. carriers currently allow travelers either to 

hold a reservation for 24 hours without payment or to cancel ticket purchases within 24 hours 

without penalty.”6

Moreover, the Department provides no rational explanation for why the sale of 

nonrefundable tickets is per se unfair or deceptive. There is zero evidence in the record that 

passengers cannot shop for the fare that best suits their needs before making a final purchase. If 

the ability to obtain a refund is important, customers can purchase their tickets from a carrier that 

voluntarily offers a refund. This is how the competitive marketplace required by the Airline 

Deregulation Act is intended to function—customers exercise their choices from a range of 

options offered by different airlines. 

The Final Rule fails to address the substantial objections that Spirit and other carriers 

raised in the rulemaking docket concerning the impact this provision will have on the price of 

tickets and airline reservation systems, and thus fails to save the Department’s decision on this 

matter from being arbitrary and capricious. Petitioners, therefore, are likely to succeed on the 

merits of this claim. 

 

6

 Final Regulatory Analysis at 5. 

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C. The Department’s Decision to Prohibit Post-Purchase Price Increases for 

Services not Purchased with the Ticket (§ 399.88) is Arbitrary and 

Capricious and Oversteps Its Statutory Authority. 

Before the Final Rule, carriers were permitted to adjust a passenger’s air transportation 

costs after ticket purchase, so long as this was made clear in the contract of carriage and so long 

as the passenger received direct notice. The new rule prevents carriers from collecting increased 

charges for separate, ancillary services (e.g., baggage, advance seat selection, flight 

insurance, etc.) selected and paid for after the passenger purchased his ticket. 14 C.F.R. 

§ 399.88(a). The effect of this rule is to require carriers to make these ancillary services 

available at the charge in place at the time the passenger pays for his ticket, rather than the 

charge in place at the time—which could be weeks or even months later—when the passenger 

looks to select and pay for the ancillary service. Indeed, keeping track of when a passenger 

purchased a ticket and determining the cost of the ancillary service at that point in time will 

involve substantial programming costs on Spirit and other carriers that sell other services after 

the time the ticket is purchased. The rule also prevents Allegiant from offering an innovative, 

pro-consumer “flex-fare” that could go up or down based on the price of jet fuel and which 

consumers could choose as an alternative to a higher, locked-in fare.7

This rule is arbitrary and capricious. The Department has failed to articulate a rational 

basis for deeming post-ticket purchase price increases by carriers relating to charges for separate, 

ancillary services unfair or deceptive, or why offering customers properly explained flex-fares 

would be unfair or deceptive. In addition, the final regulatory analysis altogether fails to address 

this rule in the context of transactions involving only carriers rather than air tour operators. The 

cost-benefit studies examine this issue only with respect to package tours, where air travel is but 

one component of the purchase. (This would appear to be a direct result of the Department’s 

determination, as noted in the NPRM, that it had not observed carriers making post-purchase 

price increases. See 75 Fed. Reg. at 32,330. 

Because the Department has not found that carriers have engaged in unfair or deceptive 

practices with respect to post-purchase price increases, the Department has not established a 

rational basis for adopting an across-the-board prohibition on post-purchase price increases 

(except for government-imposed charges). The agency has overstepped its statutory authority 

and acted arbitrarily and capriciously. Petitioners, therefore, are likely to succeed on the merits 

of this claim. 

D. The Department’s Decision to Require Carriers to Provide Individualized 

Baggage Charge Information on E-Ticket and Other Electronic 

Confirmations Oversteps Its Statutory Authority and Is Arbitrary and 

Capricious. 

Section 399.85(c) requires carriers to include information in “text form” about the 

specific baggage allowances and baggage fees that apply to the individual passenger on all 

 

7

 This concept was discussed in greater depth in Allegiant’s supplementary comments filed February 16, 2011, 

Docket DOT-OST-2010-0140. 

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e-ticket confirmations (including confirmations provided at the end of an online purchase 

transaction and sent to the consumer by e-mail after purchase), taking into account factors that 

affect the particular charges that apply to the passenger (e.g., military, frequent flyer status, early 

purchase, etc.). In the Final Rule, the Department confirms that it has “determined that there is 

value in providing [this information],” 76 Fed. Reg. at 23,147, and concludes that the Final Rule 

will include this requirement. However—as before—the Department fails to explain how current 

practices regarding the disclosure of baggage allowances and baggage charges are unfair or 

deceptive and fails to articulate the basis for regulating in this area. Importantly, the Final Rule 

permits “agents,” but not airlines, to provide this information via a link to the baggage fee page 

of a carrier website.8

 If a link is good enough for an “agent” to use in interfacing with the 

public, why is a link not good enough for the airlines? 

In the preamble, the Department identified two purported benefits associated with this 

provision—(1) reduced consumer confusion over baggage charges and (2) time savings for both 

consumers and airlines (id.). Econometrica’s regulatory analysis identifies “improved customer 

good will toward carriers” also as a benefit flowing from this requirement. Final Regulatory 

Analysis at 63. But nowhere in the record has the Department quantified these alleged benefits. 

On the other hand, the Department has estimated that this requirement will involve 

implementation and compliance costs of nearly $8 million (discounted cost, 2012-2021). Id.

at 65. Section 399.85(c), therefore, oversteps the Department’s statutory authority to prevent 

only practices that are unfair and deceptive, and is arbitrary and capricious. Petitioners, 

therefore, are likely to succeed on the merits of this claim. 

E. The Department’s Decision to Require Flight Status Notifications (§ 259.8) is 

Arbitrary and Capricious. 

Section 259.8 requires all U.S. and foreign carriers (such as Allegiant and Spirit) that 

operate at least one aircraft with 30 or more seats to notify passengers within 30 minutes when a 

flight is cancelled, diverted or delayed by 30 minutes or more. Notification must be made in the 

boarding gate area, on the carrier’s website, via the carrier’s telephone reservation line and on 

airport display boards. In the NPRM, DOT proposed to apply this requirement only to those 

larger carriers required to report their operating statistics, explaining that “[t]he Department 

tentatively believes that the cost of requiring smaller carriers to provide this information 

outweighs the benefits to consumers in general in light of the fact that the operations of the 

reporting carriers account for nearly 90 percent of all domestic passenger enplanements.” 

75 Fed. Reg. at 32,331. 

Because the Department gave smaller carriers reason to believe the requirement would 

not apply to them, DOT received no information that would disturb its tentative conclusion or 

support the version of the requirement included in the Final Rule. Moreover, the Department’s 

regulatory analysis fails to address the cost impacts associated with this requirement. Both flight 

8

 If the Department agrees to permit carriers to comply with § 399.85(c) by providing the required notice of 

applicable baggage charges via a link to a page or pop-up on the carrier’s website, which supplies a detailed 

explanation of the carrier’s baggage charges and the factors that affect them, Petitioners will exclude their objection 

to this provision of the Final Rule from their litigation. 

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cancellations and delays will increase under the rule. This outcome will result because airlines 

routinely post tentative cancellation and delay information in anticipation of bad weather but do 

not make final decisions about whether to operate a flight until closer to departure. If bad 

weather does not materialize, the flights return to their original schedules. But—under the new 

rule, which requires notification of potential flight irregularities within 30 minutes of 

“knowledge of a delay”—airlines may be forced to cancel or delay flights even if the weather 

improves, because—upon learning that a flight might be cancelled or delayed—some passengers 

will immediately make alternative travel arrangements or decide not to travel, or arrive at the 

departing airport very close to actual boarding time. 

DOT’s decision to adopt this requirement and to apply it to smaller carriers was arbitrary 

and capricious because it is unsupported by any weighing of the relative costs and benefits and 

therefore does not reflect a reasoned judgment. Petitioners, therefore, are likely to succeed on 

the merits of this claim. 

II. Petitioners Will Suffer Irreparable Harm Unless the Department Stays the Effective 

Date of the Rules 

As explained in section I.A. above, the new full-fare advertising rule violates Petitioners’ 

commercial free speech rights protected under the First Amendment. This constitutional 

violation involves a special type of irreparable harm. The Supreme Court has stated that the 

“free flow of commercial information is indispensable.” Virginia Bd. of Pharmacy v. Virginia 

Citizens Consumer Council, 425 U.S. 748, 765 (1976). Suppression or “loss of First Amendment 

freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury.” 

Elrod v. Burns, 427 U.S. 347, 373 (U.S. 1976); see Community Communications, Inc. v. City of 

Boulder, 660 F.2d 1370 (10th Cir. 1981). For example, the new rule will undermine Spirit’s $9 

Fare Club, a popular program for its customers. The appeal of the program is the availability of 

base fares as low, or lower than $9. Members are well aware that these fares do not include 

government taxes and fees and, if purchased on the Internet, a convenience fee. The fare 

advertising rule will hide what Spirit is charging and wrap it in various governmental taxes and 

fees that have absolutely nothing to do with what Spirit is actually charging for its service. No 

customer will look at the tax and fee explanation, which the Department will now require to be 

hidden in small print away from the displayed “full fare.” The potential loss of this program will 

directly reduce Spirit’s subscription revenues and force ticket prices to rise. 

Allegiant and Spirit will suffer irreparable harm in the form of compliance costs and 

economic losses unless the Department stays the effective date of the rules pending judicial 

review. In addition to the Fare Club, Spirit and Allegiant will be forced to dramatically change 

or abandon the marketing, distribution, and pricing models that allowed them to keep ticket 

prices low and to compete effectively with legacy carriers as well as with non-aviation 

alternatives. If the rule is ultimately set aside, these compliance expenditures will have been 

unnecessary and will be unrecoverable, either through litigation or market participation. The 

harm done to Petitioners’ business models and customer goodwill would be impossible to undo. 

The rules impose disproportionate compliance costs on low fare carriers, like Allegiant 

and Spirit, which the Department did not consider. The initial compliance costs will be 

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substantial, imminent, and unrecoverable. Petitioners will need to make significant changes to 

their websites and the way they communicate with their customers. These changes will not be 

simple and will require substantial information technology (IT) investments. Allegiant and Spirit 

estimate their combined compliance costs for the amended full-fare rule alone will amount to 

more than $2.6 million. Spirit estimates its total implementation costs at over $5 million. 

Allegiant and Spirit are both rapidly growing carriers, and these compliance expenditures will 

detract significantly from their ability to invest in additional routes and services. These 

additional opportunity costs are unquantifiable and unrecoverable. 

Additional marketing expenditures will have to be made to educate consumers regarding 

the change in the full-fare advertising rule to prevent the misconception consumers will have that 

air travel prices have increased. It bears emphasis that for low cost carriers, the apparent 

percentage increases will be much larger than for the higher fare, legacy carriers. Despite these 

efforts, consumers will likely be confused. If the rule is ultimately set aside, more money will 

have to be spent on transitioning back to Petitioners’ preferred, time-tested method of 

advertising, resulting in further consumer confusion and potential loss of customers. The 

damage done to the business models Petitioners have developed in reliance on the Department’s 

prior rules will be substantial and irreparable. 

The carriers will suffer irreparable harm in the form of unrecoverable compliance 

expenditures, lost opportunity costs, and damage to their corporate systems and identities. 

Petitioners would not be able to recoup these costs through subsequent litigation, as the 

Department is protected by sovereign immunity and, even if they could, the damages would be 

impossible to quantify. This unrecoverable harm to Petitioners’ business qualifies as irreparable 

harm. See Iowa Utils. Bd. v. FCC, 109 F.3d 418, 426 (8th Cir. 1986) (“The threat of 

unrecoverable economic loss...qualif[ies] as irreparable harm.”); Feinerman v. Bernardi, 558 

F. Supp. 2d 36, 51 (D.D.C. 2008); Nat’l Mining Ass’n v. Jackson, No. 10-cv-1220, 2011 U.S. 

Dist. LEXIS 3710, *46 (D.D.C. Jan. 14, 2011). Furthermore, unquantifiable damages, such as 

the harm that will be caused to Petitioners’ corporate identities and lost opportunity costs, 

constitute irreparable harm. See CSX Transp. Co. v. Williams, 406 F.3d 667, 673 (D.C. Cir 

2005). 

Implementation of this rule will threaten Petitioners’ viability. Allegiant and Spirit are 

products of a deregulated airline industry. They are small and have relatively little market power 

compared to most of their competitors. Their viability in the airline industry depends on their 

ability to innovate new products, services, and means of distribution in order to compete 

aggressively with the much larger legacy carriers, not to mention competing against non-aviation 

alternatives. Advertising low base fares is essential for attracting customers and increasing 

demand in the markets served. Non-refundable tickets, flexibility in ancillary fees and services, 

and efficiency in relaying information to customers are all essential to keeping Petitioners’ ticket 

prices low and differentiating themselves from their larger competition. The Final Rule 

essentially seeks to apply inflexible uniform standards to all air carriers and results in a forced 

commoditization of services, leaving little distinction between the low fare carriers and legacy 

carriers. Ultimately, this will hinder the ability of low-cost carriers to survive in the market and 

will frustrate the objectives of the Deregulation Act, to the public’s detriment. 

11
The Honorable Ray LaHood 

Request for Postponement or Stay 

July 6, 2011 

III. Because No Other Parties Will Be Harmed, the Balance of Equities Favors 

Postponing the Effective Date of the Rules 

Granting relief pending judicial review will not harm other parties. The Department has 

made no showing that that the challenged rules address substantial consumer harm in need of 

immediate redress. The rulemaking process itself took more than ten months, excluding the time 

to develop the NPRM. 

While the Department has an interest in preventing unfair and deceptive practices, its role 

is not to regulate every practice that a small number of passengers finds inconvenient. 

Importantly, in light of the fact that the Department has not explained how any of the challenged 

provisions addresses an unfair or deceptive practice, maintaining the status quo will not harm the 

public interest. Given the significant harm to Petitioners, and the airline industry in general, that 

will result from not postponing the rules, the balance of equities strongly tilts in favor of granting 

relief. 

Not postponing the effectiveness of the rules will harm Petitioners, other carriers, and 

ultimately consumers. Air carriers have already started to invest substantial amounts of time and 

money in developing means of complying with the Final Rule. Given the substantial likelihood 

the rules will be set aside, preventing the industry from incurring these unnecessary costs and 

ultimately having to pass them on to consumers in the form of higher ticket prices benefits both 

the industry and the public. 

IV. The Public Interest 

The public interest is best served by maintaining the existing rules and practices while the 

court determines if the challenged rules are contrary to the policy mandates and legal 

requirements of the Airline Deregulation Act, violate the constitution or are arbitrary and 

capricious. 

 If the rules are ultimately set aside, the public will be confused if carriers change their 

price advertising and other practices to comply with the rules only to later revert to time-honored 

practices. For nearly 25 years, airline consumers have come to understand that airfare 

advertisements display the base fare without government taxes and fees. Pursuant to DOT’s 

established enforcement policy, the nature and amount of taxes and fees were prominently and 

proximately disclosed, and consumers were informed of the total price before purchase. This has 

been the practice in the airline industry dating back at least as long ago as 1988, and it continues 

to be the widespread practice in other industries. Maintaining the status quo while review is 

pending will avoid the substantial likelihood that the public will be confused if the rules are 

overturned (or changed) as a result of Petitioners’ challenge. Avoiding consumer confusion will 

best serve the public interest. 

In addition, the public has a vital interest in having as much access as possible to truthful, 

nondeceptive information about prices for air transportation, an interest that a stay will protect. 

Given the difficulty airlines will have with complying with the new fare advertising requirements 

(because of the difficulty of determining a final ticket price before an individual customer selects 

12
The Honorable Ray LaHood 

Request for Postponement or Stay 

July 6, 2011 

a specific itinerary), and the risk of costly penalties for violations, airlines are likely to 

significantly scale back the price information they make available to the public. A stay would 

preserve the free circulation of (truthful, nondeceptive) information in the public domain, an 

important public interest protected by the First Amendment. 

The public has a strong interest in “good government,” which—in the context of this 

case—means that an agency acts within its statutory authority and makes decisions that are 

supported by the record and not arbitrary and capricious. For the reasons explained above, the 

Department has fallen short of these requirements, and relief will help to ensure that these public 

interests are preserved while judicial review proceeds. Importantly, relief will help ensure that 

confusion and inconvenience of the traveling public is avoided. 

CONCLUSION

Because Petitioners meet the applicable standards for a judicial stay in the D.C. Circuit, 

the Department has ample reason to find that justice requires relief pending judicial review. In 

particular, Petitioners are likely to succeed on the merits of their challenge, the harm visited upon 

them in the absence of relief will be immediate and irreparable, no other parties will be harmed 

by the relief, and relief will serve important public interests. For these reasons, Petitioners 

request that, pursuant to APA § 705, the Department stay the effective date of the rules, as 

described herein. 

Sincerely, 

Joanne W. Young 

David M. Kirstein 

Counsel for Petitioners 

Aaron A. Goerlich 

Garofalo Goerlich Hainbach PC 

1200 New Hampshire Avenue NW 

Washington, DC 20036-6802 

Tel (202) 776-3970 

agoerlich@ggh-airlaw.com 

Of Counsel for Allegiant Air, LLC

cc: Robert Rivkin, Esq. 

 Samuel Podberesky, Esq. 

 Docket DOT-OST-2010-0140 

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