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Spirit Airlines' Bookings Rise 50%

Stocks in this article: DAL UAUA AMR LCC JBLU

FORT LAUDERDALE, FLA. ( TheStreet) -- Some senators are ready to fight Spirit's fees for carry-on bags, and five larger airlines have publicly rejected the concept. That leaves passengers as the only ones to embrace it.

But in fact, Spirit's bookings for after August 1 -- when the policy takes effect -- have risen 50%, said Spirit CEO Ben Baldanza. He said tens of thousands of tickets have been sold as a result of the policy, which was announced April 6.

What do passengers see that critics miss? First, Spirit reduced fares in conjunction with the addition of the checked bag fee, and secondly, many items can still be carried on for free, as long as they fit under the seat. This includes computer bags, gym bags and coats -- but a roller board would cost extra.

Spirit's basic charge for a carry-on is $30. It rises to $45 if a passenger pays at the gate, a time-consuming process the airline hopes to discourage. It falls to $20 if a passenger pays $9 to join Spirit's "$9 Fare Club," which provides access to the lowest-priced tickets. And while the $45 fee has been widely reported, the fact that Spirit's lowest fares are falling by $40 -- also announced on April 6 -- hasn't gotten as much press.

"Our customers get it," Baldanza said. "The media says they don't like it, but if you are me, you see that the number of people who buy tickets is expanding. I think the outrage is from people who already pay high fares on other carriers. But our customers see the power of a really low fare with the option to choose what else they want."

Baldanza said Spirit has over 1.2 million seats for sale for a penny plus fuel costs. Spirit compensates for the low fares by charging for just about everything else. Many passengers, for instance, pay $39.95 annually to join the "$9 Fare Club." "We do make money," Baldanza said. "We sell things -- food, insurance, the right to check bags. We were profitable in 2009 and we expect to be make money in 2010." The carry-on fee will generate revenue both by generating more traffic and by inspiring more people to join the Fare Club.

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