$100 for a carry-on?

Spirit Airlines is charging high fees to encourage customers to check their bags.

By Bruce Kennedy Nov 9, 2012 6:25PM

Image: Man pulling suitcase in airport -- Keith Brofsky/UpperCut Images/Getty ImagesIs Florida's Spirit Airlines (SAVE) trying to anger customers just in time for the holidays? This week, the low-cost carrier quietly implemented a change it first announced in May: It's charging up to $100 for large carry-on bags brought to the boarding gate and meant for the overhead bin.


On its web site, Spirit says it empowers passengers "by offering ultra-low fares with a range of optional services -- including bags -- for a fee, allowing you the freedom to choose only the extras you value."


Management seems to understand its luggage fee hike is not popular. "What's most important is that we truly don't want any of our customers to have to pay $100 for a bag," airline spokeswoman Misty Pinson told the International Business Times. "The fee is intentionally set high to encourage customers to reserve their bags in advance, and it is meant to deter customers from waiting until they get to the boarding gate."


The fee, which Spirit hiked from a previous $45, is only for large carry-on bags declared at the gate. Passengers won't have to pay for bags they can safely stow under their seats.


Analysts believe Spirit's high baggage rate is part of an effort by many discount airlines to re-train customers' behavior regarding baggage in order to keep operational costs down and planes on schedule.


"Spirit certainly marches to the beat of a different drummer, in that they are a very pure, low-cost carrier," says Jay Sorensen, president of IdeaWorksCompany, a Milwaukee airline consulting firm. "They have a core customer base that understands how they do business. And these customers appreciate the trade-off between fees that might be charged in the low-base fare charged by the airline. "


IdeaWorksCompany, along with the global reservations and travel technology company Amadeus, recently estimated that airline ancillary revenue -- that is, the money generated by airlines beyond the actual movement of passengers from one destination to another -- will reach $36.1 billion globally this year. And within the United States, 20% of that ancillary revenue comes just from baggage fees. Domestic airlines reportedly made $3.4 billion in revenue from checked bags in 2011 -- compared to $464.3 million in 2007.


Given those soaring baggage rates, Sorensen (who, for disclosure sake, notes Spirit is not a client of his company) says Spirit and other low-cost airlines present a trade-off to their customers. "They can come in with this kind of quid pro quo offer to the consumer saying, 'OK, yes, we do charge fees, and if you want extra convenience and comfort, there will be a charge for that,'" he says. "'However, if you can get by with the bare minimum, we're going to offer you a fare that the others simply can't touch.'"


While a core base of air travelers might understand the reasoning behind Spirit's actions, observers wonder whether the general public will be as forgiving.


"Unless you're a very, very large brand like Apple (APPL) and Google (GOOG), you really don't have the money to change consumer opinion," says Darrin Duber-Smith, a marketing professor at Metropolitan State University of Denver.


"You can maybe change the opinion of a very small target market, but it's not necessarily something that an airline can do," he says. "Now the industry can do it, as a concerted effort through the association. The industry can certainly do some things that might alter consumer perception. But to think that one small airline with very little brand equity can do that is I think a bit of an overreach."


But both Duber-Smith and Sorensen believe consumer anger over higher airline baggage fees will fade. Earlier this month, the U.S. Bureau of Transportation Statistics announced domestic air fares rose to $385 in the second quarter of 2012 -- up 4.1% compared to the same time a year earlier. And as air travelers deal with higher fares, they will also become accustomed to the new baggage rates -- especially as the more traditional U.S. airlines like Delta (DAL), US Airways (LCC) and United (UAL)  try to remain competitive with their low cost rivals.


"The word here is transition," says Sorensen. "I don't expect the messiness to continue forever. I think that, over time, consumers will begin to accept the new normal and airlines will get better at presenting this information in a fair and transparent manner."


More on Top Stocks

97Comments
Nov 9, 2012 9:40PM
avatar
I Will Drive - Thank you,, Too Much Groping and personal Invasion Going On.....................
Nov 9, 2012 9:15PM
avatar
This whole fiasco began when airlines reduced the maximum weight from 70 lbs to 50lbs for standard checked bags.  Now people have to carry the excess in their carry on.  The overweight charges for just being a few lbs over is ridiculous.
Nov 9, 2012 9:13PM
avatar
That's crazy it's cheaper to fedex your stuff to wherever you're traveling too. These airlines are just going crazy with these extra charges


Nov 9, 2012 9:11PM
avatar
Guess that I won't be flying on Sprint anytime soon or in the future!!!!!!
Nov 9, 2012 9:04PM
avatar

Check my hundred dollar bag when I turn my head and cough

Nov 9, 2012 8:57PM
avatar
FAA should outlaw carry on baggage for all passengers. It's a pain in the butt for the rest of travelers and the BS of stewardesses asking other passengers to put their smaller items under their seats is pure crap. Every passenger has equal rights to the overheads and if there's no room left put their bags down below with the rest of the bags.
Nov 9, 2012 8:54PM
avatar
well if is going to be extra charge at least give better food onboard and free beers,also do no take advance of the situation,we have enough with all prices going up!! Hope my president do some **** about all air lines!!!!!!!!!!!!
Nov 9, 2012 8:49PM
avatar
I really don't see why checking your bag is such a big problem for people. This seems like a "common sense" fee. If your bag is too big to be a "carry on" size, then check it. All this does is make people pay if the don't abide by the already established carry on size.
It's got to cost the airline time and money to manually check a bag at the gate, that is obviously too big to be considered a carry on, when the bag should have been checked at the counter in the first place.
The only way this would not make sense is if the airline charges to check a bag. But, I didn't see that written anywhere. All this seems to be intended to do is make the whole process run smoother (thus, saving the airline money which they pass on as lower fares for us), and penalize the people that screw that up by not abiding by the rules. Where's the problem here?
Nov 9, 2012 8:46PM
avatar
I have had one experience with Spirit and will never again deal with them.  The one carry-on bag that was even called a carry-on and would have been free on other airlines cost $40.00 and the bag checked that would have been $20.00 on other airlines was $38.00,even though their website stated $20.00 for a checked bag.  Also, no drinks offered unless you are willing and able to pay with a credit card - traveling minors and some adults will not even get a drink of water - $3.50 a bottle.  When watching airline ticket prices, I have been able to beat Spirit prices and retain the humanity offered by other airlines.
Nov 9, 2012 8:35PM
avatar
When people travel, most need at least one bag.  What is the option? Wear the clothes on your back the whole time? Ridiculous!!!!!
Nov 9, 2012 8:16PM
avatar
I will take the train if traveling in the U.S. from now on..Screw the greedy bastards
Nov 9, 2012 8:16PM
avatar
If you've ever waited and waited to deplane while the cheapskates seated in front of you struggle to retrieve an elephant-sized "carryon" from an overhead bin, you wish the airline would charge them $1,000!
Nov 9, 2012 8:02PM
avatar
WE DO NOT HAVE TO USE YOUR AIRLINES.
Nov 9, 2012 7:55PM
avatar
About time. It's always ticked me when people show up at the gate with a bag that's twice the size allowable and the airlines let them on.
Nov 9, 2012 7:39PM
Nov 9, 2012 7:17PM
avatar

heartbart33,

 

   Companies don't "die in a plane crash" - people do. People like my brother in law

Nov 9, 2012 7:14PM
avatar
     Another good reason to send baggage UPS - cheaper & you don't need to haul it around.
Nov 9, 2012 7:06PM
avatar
I like it.  If you have a large bag it does not take a genius to figure out that you should check it in.  Just keep the low fees.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

126
126 rated 1
286
286 rated 2
474
474 rated 3
680
680 rated 4
626
626 rated 5
609
609 rated 6
620
620 rated 7
462
462 rated 8
304
304 rated 9
132
132 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
AAPLAPPLE Inc10
BIDUBAIDU Inc10
BXTHE BLACKSTONE GROUP L.P10
CELGCELGENE CORP10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.