Carry-on bag fees work for Spirit, but not others, experts say
May 12, 2012 (Menafn - Sun Sentinel - McClatchy-Tribune Information Services via COMTEX) --It's been about two years since Spirit Airlines started charging fees for carry-on bags. The airline reports the move has cut boarding times and raised average fee revenue to more than 100 per passenger.
So why aren't major U.S. carriers following suit?
Industry analysts say it's the passenger demographics of some low-cost carriers that give them the leeway to do so, but leave others still holding the line at charging for carry-ons.
Miramar-based Spirit is hiking its carry-on bag fees in November, up to 100 if purchased at the gate, and was the first U.S. carrier to tag a fee on bags stowed in overhead bins.
The no-frills, low-fare carrier said the strategy is paying off.
"We introduced our carry-on bag fees in 2010 in order to speed up the boarding process, and it has been quite successful in doing just that," Spirit spokeswoman Misty Pinson said.
Spirit said it has shaved more than six minutes off its boarding and unboarding time because fewer customers are now carrying on large bags. In the first quarter of 2012, Spirit reported average revenue from fees per passenger on a round-trip flight topped 100 for the first time.
"I don't think the other airlines would risk alienating consumers, even though charging more for carry-ons than for checked bags could speed up boarding and deplaning," said George Hobica, founder of Airfarewatchdog.com.
"I think that Spirit gets away with this because even with the fees, their fares are generally lower than the bigger airlines," Hobica said.
Spirit currently charges 20 to 45 for carry-ons stored in the overhead bin, but small bags that fit under the seat are free.
Michigan resident Lily Lembree was fuming Friday after coughing up 50 for an overweight checked bag for a Spirit flight to Detroit.
"They wanted me to check my carry-on bag too, but I insisted it could fit under the seat," she said about narrowly escaping the extra 40 fee.
Lembree said she thought she'd found the best airfare deal by flying Spirit until all the extra fees started cropping up. "You just feel kind of cheated," she said.
Spirit is the top carrier at Fort Lauderdale-Hollywood International Airport this year through March, with 16.9 percent of total passenger traffic, according to the latest airport data available.
While JetBlue Airways, the airport's No. 2 carrier, says it has no plan to charge for carry-ons at this time, it agrees that fewer carry-ons help speed boarding.
JetBlue allows one free checked bag, but charges for additional bags to help offset labor costs to load luggage, spokesman Mateo Lleras said.
Last month, Allegiant Air announced carry-on fees ranging from 10 to 30 per segment for each bag stowed in an overhead bin when purchased online. Bin space purchased at the airport costs 35 per bag.
Allegiant also operates to and from the Fort Lauderdale airport and will start new service to Niagara Falls, N.Y., on July 1.
Michael Boyd of aviation consulting and research firm Boyd Group International said carriers like Spirit and Allegiant are charging for carry-ons because their customers will pay.
Allegiant's customers tend to be impulse travelers and not frequent fliers, as is the case with Spirit, giving them more leeway on adding extra fees, Boyd said.
"It's good business for them," Boyd said. "Their flights will still be full, and so will the overheads."
Major airlines have to compete for repeat fliers such as business travelers far more than the others do, Boyd said.
American said it charges for checked bags because it's a service, and gives passengers the option to pay for the extra services they want.
In 2011, U.S. airlines reaped nearly 2.6 billion in baggage fees through September, according to the most recent U.S. Department of Transportation data.
Southwest however with its 'Bags Fly Free' policy says charging for carry-ons or even the first and second checked bag isn't an option.
That strategy "isn't just a customer service-friendly practice, but its operationally friendly," and has resulted in fewer bags in the cabin as well, spokesman Brad Hawkins said.
And there's the side benefit of not "nickel and diming our customers," with fees, Hawkins added.
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