Alaska Airlines increases fees, but also increases benefits. Photo by David Parker Brown / AirlineReporter.com
Hearing that an airline is increasing fees doesn’t really mean much anymore, since it is common news. It has worked out well for airlines to increase their profits and although passengers complain, they continue to pay them.
Alaska Airlines is planning to increase their checked bag and change fees near the end of this year. The new change fee will go from $75 online and $100 over the phone to $125. Passengers who make their changes 60 or more days before departure will receive no extra fees.
Currently, a checked bag will cost $20, but that will be increased to $25. A bigger increase are additional bags which will go from $20 per bag to $25 to a second bag and then $75 per bag after that. However, with the increased fees, Alaska is sweetening their Baggage Service Guarantee.
Unique to Alaska Airlines, if your bag does not arrive at the luggage carousel with-in 20 minutes of your aircraft arriving to the gate, you will receive a reward of sorts. Either a $20 discount code for future Alaska Airlines flight or 2,000 Alaska Airlines Mileage Plan bonus miles. As Alaska increases their fees, they will also increase the amount passengers will receive. The time still remains at 20 minutes, but if a bag does not make it in time, passengers will get either a $25 discount code or 2,500 Mileage Plan Miles.
Allegiant MD-80 and Spirit Airbus A319 hanging out in Las Vegas. Photo by Joe (JX).
Recently, I was able to sit down at my local NPR studio and talk with Tess Vigeland about airlines and their fees. Previously, I wrote a story on how it makes sense that airlines, like Allegiant and Spirit, charge fees and how they aren’t that evil. Not that many people are fans of my thoughts on fees, but it is important for people to realize that they have a choice in what airline that they fly (on the most part) and voting with your wallet is the only way that policies will change. If you play your cards right, ultra-l0w cost carriers can provide substantial savings.
As for now, people have been voting by flying on Allegiant and Spirit more (my previous story shows the numbers), so why would they want to change their policies?
Anyhow, listen to the story above or read part of it on Market Place’s website.
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):
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
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.
It will cost you more to bring your carry-ons on your next Allegiant flight. Photo by Jeremy Dwyer-Lindgren.
Allegiant Air has stated that they will start charging for carry-on bags starting Wednesday, April 4th — and no, this is not an April Fools’ joke.
“Allegiant will begin charging for carry-ons for travelers booking new reservations beginning Wednesday (it will go live on our website late Tuesday night PDT),” Jessica Wheeler, Public Relations Manager for Allegiant confirmed to AirlineReporter.com.
Although the airline has not publicly announced the changes, they sent an internal memo to employes. Passengers will be allowed one free personal item (purse, briefcase, laptop), but anything larger will require the carry-on bag fee. Paying for the carry-on at the airport will run you $35, but buying online will save you some money. Allegiant has not confirmed how much the fee will cost if purchased in advance, but inside sources have explained that they expect it to be between $14.99-29.99 — which matches Allegiant’s checked bag fees. The difference in price is route specific and depends on the length of the flight flown.
From Allegiant, this shows how much your bags will cost on upcoming flights. Yes, it is a bit blurry -- you don't need glasses. Image from Allegiant.
This is not a huge surprise, since Allegiant has previously stated that they were considering charging for carry-ons. With the success of Spirit Airline’s carry on fees (Spirit s the only other US-based airline charging for carry-ons), this seemed to be just a matter of time.
Allegiant, based in Las Vegas, is an ultra low cost airline that offers cheap, basic fares and then charge for additional services like seat reservations, boarding order, food and drinks and now carry-ons. This type of ala-cart pricing has been quite controversial, but does allow people traveling light, to travel cheap.
The model of ala-cart pricing and providing additional travel options (hotel, rental cars, etc) has worked out well for Allegiant — they were one of the most profitable airlines in 2011.
Passengers seem to complain about this type of pricing, yet they keep buying tickets. Why wouldn’t airlines look at additional revenue sources like this when they appear to work? If you don’t agree with an airline’s policies, show them with your wallet. Let the complaining begin…