Spirit Airlines has just increased the cost to purchase tickets online, by an average of $5 per segment, as flagged by JT Genter. Now, this is unlikely to actually impact the final price you pay for your ticket, but it’s an interesting development nonetheless.
Spirit hikes Passenger Usage Charge by $5
As of May 21, 2025, Spirit has increased its “Passenger Usage Charge.” Previously, it was anywhere from $3.99 to $22.99 per segment, while now it’s anywhere from $8.99 to $27.99 per segment. As you can tell, that represents an average increase of $5 per segment.
What is a Passenger Usage Charge, you ask? Good question. As the airline describes it, “this applies to bookings created online, at international airports or via reservations centers.” In other words, if you book a ticket anywhere other than at the ticket counter at a domestic airport, you’ll pay this fee for each segment you book.
For example, let’s take a look at a Tampa to Houston to Los Angeles ticket, with a total fare of $112.38. If you look at the breakdown, the base fare is $29.21, while the Passenger Usage Charge is $55.98, so that comes out to $27.99 per segment.
Most airlines don’t have these Passenger Usage Charges, so what are the practical implications of the Passenger Usage Charge increasing?
- Ultimately the fares Spirit can charge are based on the competitive landscape, and the airline has to market all-in fares; so you can expect that when the Passenger Usage Charge increases by $5, the base fare decreases by $5
- The one potential benefit is that if you’re willing to book your Spirit ticket at the airport (which few people are willing to do), you can save an extra $5 per ticket, since you’re not on the hook for those fees
Why Spirit is increasing the Passenger Usage Charge
Logically, you might be thinking “huh?” Why would Spirit increase the Passenger Usage Charge if it can’t actually increase fares? Well, that gets at the very reason these kinds of fees exist, which is to decrease the portion of an airline ticket cost that’s taxable. After all, consumers only care about the final price they pay, and not how much the airline gets to keep vs. how much the government gets.
Airline tickets in the United States are subject to a federal excise tax of 7.5%. The important thing to understand is that this excise tax is exclusively charged on the base fare of the ticket, and the same tax doesn’t apply to any optional add-ons.
Whether something is categorized as an optional add-on depends on whether the fee can be avoided. Since you can avoid the Passenger Usage Charge by booking at domestic airports, it’s technically an optional fee.
So by increasing the Passenger Usage Charge by $5 per segment, it essentially means that the airline can keep an extra 38 cents per passenger per segment. If we’re talking about a full flight with 150 seats, that’s an extra $56 in revenue! Of course that assumes that nobody chooses to book at the airport. I’m not sure this will fully plug the gap of Spirit’s negative 22.5% operating margin in 2024, but I guess every little bit helps. 😉
If you ask me (and many others), it’s time for some reform for the federal excise tax on airfare, because it doesn’t make sense to essentially incentivize airlines to create as many fees as possible, in order to minimize the taxes that are paid.
Bottom line
Spirit Airlines has increased its Passenger Usage Charge on airline tickets by an average of $5 per segment. This applies for all bookings, except those made at counters at domestic airports. No, this doesn’t mean Spirit is raising the cost of tickets. Instead, you can expect the airline will decrease the base airfare by $5 per segment to coincide with this.
The logic is that the airline doesn’t have to pay the 7.5% federal excise tax on the part of the fare that’s the Passenger Usage Charge, so the airline will net an extra 38 cents per passenger per segment, assuming no one books at the airport.
What do you make of this move on Spirit’s part?
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