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Why Spirit Airlines Loves Carry-On Bag Fees

I’m not sure I’ve seen a bigger uproar in the airline industry than when Spirit Airlines introduced carry-on baggage fees last year. If I read 1 article I must’ve read a dozen saying that people would never pay it, and that passengers would stop flying Spirit, blah blah blah. Well, since then Spirit has continued to be one of the country’s most consistently profitable airlines and, despite what pretty much every blogger type out there thinks, people continue to fly them in huge numbers.

I bring this up because news came out yesterday that Spirit earned $50 million from carry-on baggage fees in the first year since they’ve been levied. At $20-$30 each (depending on whether you’re a $9 fare club member), that means they’ve collected fees on roughly 2 million bags. As a shareholder, you’ve got to be pretty satisfied with that.

And while passengers will continue to complain, if you’ve flown Spirit in the past year, you’ve probably noticed that boarding goes very quickly, since people are more likely to check their bags and less likely to try to jam oversized bags into overhead bins.

If loads on Spirit continue to be high (85.7% in November), and passengers continue to fly them (Revenue Passenger Miles up 21% year-over-year and load factor up 4 points year-over-year), Spirit, frankly, would be crazy NOT to charge carry-on fees. And I’m starting to think that major carriers are crazy leaving this money on the table. After all, 10 years ago would you imagine that network airlines would charge people for airplane food? Ten years from now (less?) everyone will charge for carry-on fees, under the guise that it allows for faster boarding, faster turnarounds and, hence, lower fares. Elites excluded, of course.

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  1. I don’t know if you’re right about this. I also don’t know if you’re wrong. Flying Spirit is a pretty miserable experience, but it’s cheap. If EVERYBODY was like Spirit, I think there might be a decrease in demand for air travel.

    One of the reasons Spirit NEEDS to charge for carryons is because they cram so many people onto their planes. If they didn’t, there simply wouldn’t be enough room for the bags. Mercifully, the other airlines aren’t cramming everyone as tightly. Yet. We’ll see.

    • I don’t see why there’d be a decrease in air travel — if, like with Spirit, the ancillary fees help keep airfares low, people will continue to fly. They’re continuing to fly now, and many people are paying baggage charges (and others).

      Plus, there aren’t room for all the bags on any other airline when the flight is full. They charge for bags for the $$ and because it allows for a quicker turnaround. Look at how the fee situation has changed in the past 10 years — 10 years from now, I could see everyone charging for this (and a bunch of other things we haven’t considered).

  2. Spirit flies its A320s with 24 more seats than, say, US Airways (which is why their flights are pretty miserable). That’s a lot of potential extra carry-ons. Spirit really had no choice but to limit carry-ons somehow. Charging for them was brilliant.

    But is there no level of discomfort and fee that will dissuade the public from flying? I think most people see the free carry-on as a God given right. Indeed, many suspect that Congress would legislate free carry-ons if the industry moved to charge for them.

    A more likely new fee would be for soda. Why is soda free on airlines? I’m not really sure. If you recall, US Airways tried charging $2 for all beverages (including water) a couple of years ago, but gave up when its competitors failed to match. Personally, I think water should be free, but I see no reason why other beverages should be.

    Of course, given the newly oligopolistic nature of the USA airline industry, the airlines may just jack up ticket prices instead of instituting new fees. Remember, the fee mania was caused by huge losses. Those have basically disappeared now, despite sky high oil prices and a crummy economy.

    • I think there is no level of discomfort that will dissuade the public from flying if fares are low enough (ask Ryanair). Congress cannot legislate the free carry-on – that is crazy. They’ll never get away with that.

      I really can’t imagine what the backlash was at US Airways such that they pulled back from charging for beverages. They should charge. They’re charging for so many things now, I think we’re at the point where charging for more things won’t have any effect.

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