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Spirit Airlines CEO Ben Baldanza discusses whether the government should reinstate the airline tax.
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-- six days in the FAA shut down an airline taxes are down about 200 million -- -- tax holiday.
Is saving Americans around fifty bucks for round trip flight but transportation secretary Ray LaHood.
Thinks the money should still stay in the federal government's pocket take a listen.
That that money is being lost to the treasury.
And we're trying to figure out -- it can be made up or not so for people who really care about debt and deficit.
Can pass a clean bill.
Let's get back on track let's get our workers back to work let's get construction projects going again and let's start collecting the tax that goes into the federal treasury.
Our tax well our next guest says the tax holiday is enabling more Americans to travel and is spurring economic activity.
Spirit Airlines CEO Dan ball Danza joins us now from Fort Lauderdale and -- tell the audience if they don't know what you have done.
With the money that you would otherwise be -- -- the FAA.
Well thank you David every dollar that would've otherwise been paid into the government is staying in consumers' pockets.
Because it's -- we've not raised our fares one -- we've just stopped collecting the tax.
Since the government is us that the FAA has not been reauthorize it's not legal -- like the fact so rather than collect that money incentive of the government we just let customers keep that.
And as a result of that we're seeing our sales boom all that's terrific now how much of that -- is that is that like about a 10% savings for ticket.
It's around -- because -- -- seven and a half percent federal excise tax but there's a couple extra fees like.
-- 9/11 fee and you know path to security fees and things like that -- -- the collection of around 10% that's right.
China spirit -- -- just save as much about fifty dollars right now.
Vs what she had to pay when the taxes were enabled.
You know I'm just wondering.
What the heck was a government do it if we could live without paying the government all this extra body.
What are they doing with a about it why we have these these sounds like sounds like non essential federal money.
Well you know the government obviously is still running the essential parts of the entrapment system like their -- control of things right what my understanding of what they've stopped is airport related projects and things like that.
I'll play with spirit our view is that -- the FAA needs to be funded.
Our biggest concern is really of two things one we want these -- to be fully transparent.
To the consumer they haven't been we think attract a lot of people don't even realize until now that they were paying seven and a half percent of the government and every ticket.
And the second thing is we've been hearing a lot of wins then -- -- -- as part of that.
Debt solution rather than you know thinking of double -- these -- is or adding new taxes and we think that would be terrible.
We've actually started a little effort that we call -- don't tax me broad out or not it and that and that.
Any idea is due out recognize that airlines are catalyst for the economy and the more people who travel.
The more jobs are created so keeping taxes low on the transportation industry spurs the American economy we think -- good for America.
I don't think there's any question that -- -- -- if people move around particularly if they want to they should be taxed more by the way you should put a little snake one of those don't tread on me snakes.
On top of that -- there's part of your logo I love it -- but we did hear Ray LaHood saying we want the money back to pay off the depths laws are.
I think for goodness sakes give people back that money and they will travel more have you seen any signs.
So far of of more travel as a result of giving folks back their money.
Absolutely in fact in the.
First 22 days of July which was before while the Jackson being charged.
Our year over year sales were up 22% were a bigger airline and the average fair we're collectibles about 12% higher most of that was to cover higher fuel costs.
But since the -- has gone away.
Our sales are actually up 43%.
-- slowing -- percent.
And our average revenues up 19%.
Vs 12% so in fact we're seeing a huge stimulative effect of this tax decrease.
And we would like everyone in the government to recognize when you lower the taxes more economic activity happens.
There -- go there -- go the go -- the government might actually end up in better shape as a result of more economic activity by the way Jay Rockefeller senator from West Virginia.
There is lamb basting you her colleagues the ones who -- pocketing the money from that would normally go to the FAA saying.
We are writing to confirm whether your company again speaking to the airline's other than spirit.
Is one of the airlines generate profits by exploiting its own customers.
Like the and celery -- that many airlines now charge for blankets checked luggage priority seating.
It's that are -- the recent -- increases further damage the industry's relationship with airline passengers so.
You do you have any sympathy at all for your colleagues.
Who may be taking this extra income in order to pay off their expenses.
Well you know they have their own business model than they have their own reasons for making the decisions they're making and I can't really comment on that I can just say that it's spirit.
We have very low costs and very low shares of the lowest fares in the United States.
And that drives a lot of traffic if I can mention something else to be very quickly Ben I went tag -- glad I well.
OK -- dubbed the convention -- -- Fort Lauderdale says that for every -- He knew people who visit South Florida a new job is created.
This does is sales increased that we're seeing with this taxes could create a thousand jobs a year just in South Florida and we're only 1% of the you asked.
Do the math and think that the -- how -- -- -- our.
Examples do they need -- lower tax rates year increase economic activity happens all the time everywhere and here's another example from band -- -- CEO -- airlines we applaud what you were doing -- keep doing it as long as you -- thanks a million for coming.
