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Allegiant and Spirit Are Smart to Add/Increase Fees. Why Not?

Allegiant MD-80 and Spirit Airbus A319 hanging out in Las Vegas. Photo by Joe (JX).

Allegiant MD-80 and Spirit Airbus A319 hanging out in Las Vegas. Photo by Joe (JX).

With Spirit Airlines raising their carry-on fee at the gate to $100 ($35 if you pay ahead of time after November 6th) and Allegiant Air starting to charge for their carry-ons, it has a bunch of people very upset. But why? If an airline comes out with a policy you do not agree on, do not fly them. They will get the message and either change their policies or go out of business. Even though people state they won’t fly either airline, both Allegiant and Spirit continue to grow, so why would they want to reverse their fees?

Yes, I realize that some passengers do not have many choices at their closest airport. However, there is a reason why other airlines are not able or willing to fly into those airports — they can’t make it profitable. So, you are either stuck with an airline that charges fees, one that runs turbo-props or you  take the bus.

What interests me are the people that do have a choice, complain about fees, yet continually choose either of the two ultra low-cost carriers.

Being human, most people want their cake and eat it too. Passengers want a first class experience at an ultra low-cost carrier price. Sorry to break it to you — that is not going to happen.

When asked how Spirit Airlines views its fees, Misty Pinson, Director of Spirit Communications, told AirlineReporter.com, “Our ultra low fares with optional add-ons are very consumer friendly. We give customers the opportunity to save money with our low fares and give them the power to choose the extras they want, and they only pay for those they use rather than being forced into paying a higher fare that includes extras that they don’t even want or use.”

Some of you might be rolling your eyes thinking that Spirit is just spinning the fees as a good thing, but Pinson actually gives some good points. If I fly on another airline that might not have as many fees, but I don’t want a soda, I don’t have a bag to check and I am not interested in food, I am still paying for all of those things in my ticket price. Yet airlines, like Spirit, give you the option to pay less overall, if you are not going to use all the options. How is that unfair? Especially when you do all all the fees to the base fare, the overall price still comes under most other airlines.

I also reached out to Allegiant to check in on charging for carry-on bags is going. “Inevitably, when you start to charge for something that used to be free, there will be some people who are vocal about it, but ultimately, we have seen that only about a third of our customers are purchasing overhead bin space when they make their travel reservations online,” Allegiant spokesperson explained over email. “As we unbundle our product and drive down base fares, we are able to stimulate demand and see growth in the number of people who can afford to travel.”

Let’s take a closer look at how both airlines have been doing; comparing the first quarter of 2011 to 2012, both airlines did very well (all data from SEC):

ALLEGIANT
Revenue Passenger Miles (RPM) are up 17.2%
Passenger revenue is up 25.8%
Average fare is up 6.7% to $94.95
Average fare (ancillary revenue) is up 4.2% to $37.75

SPIRIT
RPMs are up 18.8%
Passenger revenue is up 17.5%
Average fare per passenger flight segment is down 6.9% to $76.65
Non-ticket revenue per passenger flight segment is up 21.3% to $51.68

That 6.9% decrease is important to note. It indicates that the people who don’t buy anything else are getting a better deal on Spirit flights.

If you were an airline and  wanted to make profit (when it comes down to it, that is what every airline wants right?) and you have this business model that makes you profit, while you continue to grow your passenger load, why wouldn’t you do it? There is obviously enough demand for airlines like Allegiant and Spirit to exist with other  domestic carriers Southwest, Alaska and Virgin America as well.

Many feel that ultra low-cost carriers have started a race to the bottom for overall experience. I disagree. They have provided a cheaper option for people who care more about getting from point A to point B as cheaply as possible than they do about amenities. If you want to ride in style, you can still pay more to fly in first class on another airline, not have to pay any fees, get more room and even a meal. The “golden-age” style of flying still exists, but it will just cost you much more (like it did in the “good ol days”).

If you are still angry about all those airline fees, it is okay to be angry — just don’t blame the airlines. If you are going to blame anyone, blame those passengers who see them as a better overall deal and create the demand for airlines like Allegiant and Spirit to come along and fill.

Alright, let’s hear it… what do you think of these new/higher airline fees?

A huge thanks to Dan Webb for helping me with these numbers and to Joe (JX) for letting me use his photo.

17 comments to Allegiant and Spirit Are Smart to Add/Increase Fees. Why Not?

  • Mark C. (OKC)

    The old adage “Let the buyer beware” comes to my mind in all this. If you pay attention to what you’re buying, you can save some decent money. If you don’t, then you only have your self to blame. But of course, we are now in a “Blame Others” society…. blaming the airlines is in style.

  • Kevin M.

    Why not? Because people don’t like the feeling of being nickel-and-dimed to death by an airline, like Spirit, which revels in saying “we have low fares, so go screw yourself.”

    • Is paying more worth not having to figure out the nickel and dime stuff? I know for some people it is worth just paying $200 for your ticket and being done versus paying $50, then $35, then $5, etc — even if it ends up being $150 total.

      David

      • Peter

        I won’t fly these carriers because of these policies. It feels too much like paying a fine for not anticipating certain twists of their gimmicks. I usually fly WN, and couldn’t be happier. I pay and I know what I’m paying, not getting surprised later.

        I think I’d take less issue with it if Spirit and Allegiant would drop the more ridiculous fees. Charges for the ticket and then for the privilege of /buying/ the ticket. Charges for carry-on bags, even if your combined weight with the carry-on is less than that of other passengers. I’m under the impression that Spirit has even at times advertised super-low prices and tacked on a huge fee for fuel on top of it. These are going too far. Paying for checked luggage is something I’m willing to accept, but everywhere I go I have my laptop backpack. Five to ten pounds that are always with me, not just when I travel. The idea of paying extra for something that is always with me and goes in space that will not otherwise be occupied while weighing such a negligible ammount is insulting. It’d be almost less insulting to weigh people and their carry-ons at the gate and charge them by the pound.

        Buying air travel should not feel like navigating a minefield if an airline wants my business. They can do what they want, but these policies that treat passengers as enemies are enough that I won’t even look at Allegiant or Spirit for my travel needs.

        • Prior to the recent BS in which airlines must advertise ticket prices with all taxes and fees, airlines still had to include fuel surcharges in their advertised fare. Whoever told you that Spirit advertised low prices and threw a surcharge on at the end is wrong. They advertise super low fares and then there are government taxes and fees that are added on before you actually pay.

  • It all comes down to overall price. We all need to keep the fees in mind when we book a flight. When I fly for business, its a short trip with only a carryon. If they are going to charge me for it I just need to know in advance so I can plan for the total cost. If its going to cost the same whether I carry it or they do, I might as well let them do it instead of waiting in the jetway with 100 other people for my “checked at the gate” bag because the aircraft was full.

  • Louie

    Spirit is pretty transparent about how much they will charge. Of course, people don’t read the fine print and will hem-and-haw to learn it’ll cost them $100 to carry on a bag (if they do it gateside). Yet, people choose to fly Spirit because of its inexpensive fares.

    Travelers should be more smarter and astute when it comes to fees. Know how much you’ll pay. Don’t want to pay $100 to carry on? Then pay online. The information is right there in front of you, or at least at your fingertips.

  • Low-Cost airlines in Europe are just the same and I think most people readily accept that these additional charges are there, even on Ryanair which has a reputation for making ‘over the top’ charges. However, none of them make a charge for ‘carry on’ baggage, yet!

    I’m off on vacation to Spain tomorrow on Monarch Airlines (a UK airline who have successfully made the transition from charter airline to low cost scheduled). They charge for extra legroom seats (£6.50), hot breakfast (£8.00), 1 checked bag at 20kgs (£16.00) plus an additional 3kgs excess (£10.00). To me, that’s perfectly reasonable although I wouldn’t be happy if they were charging for carry-on, I think that’s too much although when I see the size of some of the carry-on that other passengers try to get away with I’m not so sure…

  • James Burke

    I flew Spirit for the first time last week. I was amazed how few people had to pay for their hand baggage at the gate. Most people prepaid, or only had a small bag that fit the fairly generous dimensions for a free bag (you can still carry on a ‘overnight’ sized bag, which is fine for city-break travllers (I flew LGA-DTW). I paid for my bottle of water. I didn’t care for the Robo-FA’s, but the most important thing was we pushed back on time, and landed a couple of minutes early.

  • Dave

    We all know that turn around time is a large component of airline profitability, so it makes more sense to me to give passengers incentives to check luggage rather than carrying everything they own on board with them. If you’ve ever been seated in the last row and been in a hurry, you know what I’m talking about.

    However, if the goal is to compensate the airlines for the exact portion of the flight expense each of us is responsible for, ticket price should be a function of total passenger and luggage weight.

  • LRS

    I think they should just charge per pound total weight: people, bags and all. After all, this is one of the main factors in air travel cost – the more weight plane takes on, the more fuel is used, right?

    This may be more convenient that the current schemes, and easier to calculate beforehand.

    And knowing real weight of all passengers and luggage may also improve the safety a bit, there were some crashes attributed to average numbers being too small.

    • Mark C. (OKC)

      Well then my wife would never fly if she had to give out info about her weight. I understand your idea LRS, but there is no way that I can see this being implemented. But if it does happen, I bet RyanAir does it first….. they are crazy enough to try it.

      • LRS

        Well, ok, I may be a bit biased here, with my 55kgs and relatively light packing habits… But I dare Ryan Air to try this! =)

        P.S.: Never understood this sensibility about personal params, though. Credit card number is a sensitive info, but weight..? Probably has to do with the body image distortion by all the glamour magazines.

        • Mark C. (OKC)

          Been married over 22 years and there are things I’ll never understand about my wife thought process at times…… but that’s what keeps life interesting year after year.

  • cook

    How about just not flying at all! As noted elsewhere, if a trip is under 1,000 miles and I can afford the time (often true), I’d rather drive. I KNOW that it is less safe and, in the end, costs about the same or a tiny bit less. But there is sooo much less grief. I’ve already put in my years and miles as a frequent flyer and the process now holds zero pleasure for me. When possible, the r eally best option is not a Boeing or an Airbus (or the many RJs), but a Ford or Chevy.

  • Today my grandchildren were minutes late getting to the gate the plane was still there, a Spirit employee refuse them board, told them tough your late , they could have accommodated these children who are from a poor single family home. The flight was at 6:45 am, the weather was bad, the drive to the airport is long, but no they left them crying at the counter with their mother almost hysterical. What kind of company is this??
    I will always fly another airline when possible and will let everyone know the shabby treatment my grandchildren received. Shame on you Spirit Air.
    Its not enought you nickel and dime everyone. I paid for the fare , for seats so I would be sure they would sit together and for luggage. They probably had overbooked and there were not seats anyways. I think it is time we bought some regulation back to the airlines. It used to be a pleasure to fly now it is torture. It used to be all airlines would accommodate you with connections and you could check at least two bags and they gave you a meal.

  • Silvia

    I don’t mind that there are different types of ammenities on airlines. Who I fault with not explaining the “no carry-on without a fee” policy is Travelocity, which lists all airfares in a descending fashion, and neglecting to be transparent about Spirit’s carry-on costs. I’m 64 yo, and don’t own a regular bag, I have used free carry-ons for the last 30 years. I travel extensively (pleasure) and had never been charged for a carry on in all my years. Other sites that have “different” rules from the standard, don’t let you pay for the airfare, without alerting you to the carry on fare(s) and one has to click on “no thanks” to eventually buy your desired ticket (which I would not have wasted my money on Spirit, had I known).

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