FORT LAUDERDALE, FLA. (
) -- Some senators are ready to fight
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.
Spirit's top two markets are Fort Lauderdale, Fla., and Detroit. It is No. 1 in the former, holding 20% of the market, and No. 2 in the latter, holding about 5% of the market, which is dominated by
. Atlantic City is a key market, as is Myrtle Beach, where Spirit is the only carrier to fly big jets as opposed to regional jets.
In terms of the operational realities of the airline industry, the charge makes perfect sense because it addresses a major problem: delays incurred when passengers search for space in overhead bins, typically to stash their roller boards. By cutting five minutes from the time each aircraft spends at the gate, Spirit could gain 15 hours of flight time each day, Baldanza said. The carrier's 29 aircraft make about a half dozen "turns" each day.
However, the airline industry is also sensitive to public and Congressional opinion. On Sunday, Sen. Charles Schumer (D-N.Y.) said five airlines told him that they will not institute fees for carry-on bags. These include Delta,
Spirit doesn't care what other carriers do. "We're indifferent about whether they follow," Baldanza said. However, it is worth noting that Spirit was the first U.S. carrier to charge for the first checked bag, starting in June 2007. It was not until February 2008 that United
became the first major carrier to follow.
In the end, Baldanza is clearly pleased by the furor over Spirit's fees. He is, after all, a marketing guy who was previously senior vice president of marketing at US Airways, and free publicity is something he values. Asked whether he believes all publicity is good publicity, Baldanza said no, but: "Our sales are up and the media exposure is big and becoming more balanced, and that combination is a good one for Spirit."
-- Written by Ted Reed in Charlotte, N.C.