What looks like a disagreement over font size has roots that run deep in the discourse of civil liberties, industry regulation, and the importance of commercial aviation to the American economy.

On April 1, the Supreme Court declined Spirit Airlines’s appeal, ending years of legal battle between the discount airline and America’s Department of Transportation about how prominently airlines must disclose the total price of a ticket [3]. Since 1984, the Department of Transportation has required airlines to advertise the “entire price” of tickets, including the taxes. Airlines previously could have advertised ticket prices and taxes separately, but according to the new rules, the tax component cannot be listed “in the same or larger size as the total price.” The US Court of Appeals says that this prevents airlines from confusing customers about total cost [1].

This represents a victory for those who want to protect the traveler from deceptive advertising. Not unlike other discount airlines, Spirit has built its business around advertising $9 fares and then charging additional fees for checked and carry-on bags, advance seat assignments, and a “passenger usage fee” of up to $17 each way for tickets booked online. Spirit is not required to include the online booking fee in advertised prices. For reasons like this, the government has been imposing a growing number of fines. In 2011, the Transportation Department assessed 21 penalties for fare advertising regulations with total fines more than $1 million, compared to $379,000 in 2001. Those fined include Spirit, LAN Airlines, South African Airways, Orbitz, Virgin Atlantic, Thai Airways, JetBlue, and Air Canada [6].

Precedent against the Spirit Airlines was heavy. As UCLA law professor Eugene Volokh explains, “The Supreme Court has said in the context of commercial advertising [that] the government has a very broad right to mandate speech that is reasonably aimed at preventing people from being misled” [6]. And thus, Spirit was not even able to convince four justices they should among the 75 cases annually (out of about 8,000 petitions received) be allowed to make their arguments to the Supreme Court [1].

But why, then, did Spirit think this fight was worth the legal fees? Several airline trade groups and the American Society of Travel Agents raised concerns about the new regulation, saying that they violate the First Amendment [6]. Airlines also stand to gain ground in the regulation battle. Spirit’s attorneys write, “Such a government effort to micromanage how speakers communicate the burdens of taxation would raise serious First Amendment concerns in any industry, but they are doubly problematic in an industry Congress specifically chose to deregulate” [1].

The back story is an ongoing discussion between airline executives and the government about increasing regulation. The question of restructuring aviation taxes and fees has been the subject of ongoing debate, especially as declining fares are causing tax revenues to drop [7]. In 2011, President Obama suggested implementing a $100 “take off” tax and also increasing the Transportation Security Administration (TSA) per-passenger security fee on top of the typical 20% tax percentage on a ticket [2]. Nicholas Calio, president of Airlines for America, responded, “We’re one of the most heavily taxed industries in the country. There are other places to go” [4].

Indeed, the airline industry is not only heavily taxed but also struggling. According to the National Airline Policy says that in an industry that has already lost $55 billion and 150,000 due to recession and rising fuel prices between 2000 and 2010. And they make some good points, stating that the commercial aviation industry creates more than $1 trillion per year in economic activity, helps drive nearly 10 million American jobs and 5 cents of every dollar of US GDP. They post a policy wish list that includes reduced taxes, reformed regulations, investment in modernizing air traffic, protection against competition from foreign carriers, and more stable energy prices [5]. The latest rules obviously do not go towards achieving any of these goals.

Spirit’s rejected appeal may represent a victory for those who wish to protect consumers from price confusion, but it is a loss for civil libertarians and airlines, who want the government to engage with them by investing rather than taxing. Looking at all sides of the story, it becomes less clear whether this decision is good for customers in the long run.

[1] Doyle, Michael. Supreme Court won’t hear Spirit Airlines’ appeal of ad price policy. The Miami Herald, April 1, 2013.

[2] Erb, Killy Phillips. Obama’s Plan for Higher Airline Taxes Sees Not So Friendly Skies Ahead. Forbes, September 28, 2011.

[3] Gulliver Business Travel Blog. Problems in the Spirit World. The Economist, April 2, 2013.

[4] Jansen, Bart. Airlines oppose higher taxes to fix federal budget. USA Today, December 5, 2012.

[5] National Airline Policy. America Needs a National Airline Policy: Five Policy Priorities. Viewed April 2, 2013.

[6] Stellin, Susan. Airfares with Less Fine Print. New York Times Business Day, December 26, 2011.

[7] Yamanaka, S., J. Karlsson, and A. Odoni. (2006). Aviation infrastructure taxes and fees in the United States and the European Union. Airlines, Airports, and Airspace: Economic and Infrastructure Analysis (Transportation Research Record No. 1951), 44-51.