Sunday, December 22, 2013

Spirit Arilnes

Spirit Airlines increased 4.11 percent December 20th due to the new U.S budget deal.  The U.S budget deal consisted of U.S airlines repealed and won $380 million in fees that they pay for aviation security every year. The previous deal consisted of passengers paying $2.50 per flight segment or a maximum of $5 each way. The new aviation charges will increase significantly to $5.60 each way of a trip which is a mammoth win for United States airlines.  The Transportation Security Administration aviation security costs covered by fees will rise from 30 percent to 43 percent under the new agreement, stated the House of Representatives. Passengers will now have to pay more than half of their previous costs to continue airport security that includes passenger and bag screening.

All in all passengers will be required to pay extra for security purposes and don't have a choice if they want to travel with U.S airlines.  The new aviation security fee is to be repealed on October 1st, 2014.  While reaching this deal congress agreed to eliminate one of the 17 unique taxes on the aviation industry.  The TSA has never increased aviation security costs since it was first established after the 2011 terrorist attack and they agreed that with a significant amount of technology improvements and high technology explosive scanners.  In my opinion I believe that this new deal with have an affect on the majority of the U.S airlines and a key factor to keep in mind is if increases in taxes for passengers and fees will result in decreases in air travel.  However I believe it will have minimal impact because I strongly believe that passengers will comprehend that if they demand increases in security and airport safety this new deal was necessary and passengers will continue to travel especially under the new aviation costs standards, they don't have many ways to work around it if they want to travel.

-Guillermo Dilone, Junior Industrial Analyst

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