Unclogging the Overhead Bins: Spirit to Charge for Carry-Ons

Last Updated Apr 7, 2010 12:45 PM EDT

Like the fabled lavatory fee, the day when airlines started charging for carry-on bags was just a matter of "if" rather than "when." As usual, Spirit Airlines has decided to break the barrier on this one. It will start charging customers for every bag that customers need to throw into the overhead bin. This absolutely fits with the Spirit model, and I think it's a very smart move.

For the past couple years, Spirit's management has worked hard to reposition the airline as an ultra low cost carrier. The idea for them is to charge as little as possible for the base fare while charging additional for everything else. This is the Ryanair model that hadn't really found much traction in the US -- until Spirit and Allegiant adopted it. For Spirit, it's working wonders for them as the days of red ink are in the past. They've been making money.

So how can they charge fares so low and still make money? Well, it's because nothing is included in that fare except a basic seat. In fact, I think some of the fees that they add are downright deceiving, and the DOT is likely to jump on them, but other things make perfect sense. Let's take a look.

The lowest fares are reserved for those people who join their $9 Fare Club. Think of this like Costco. If you pay $39.95 for an annual membership, you get access to the deals. If you fly a couple times a year, that can pay off. How low are those fares? Spirit says they start at a penny, but I call bullsh**.

They say that $9 Fare Club members have access to over a million seats each year (about 2,700 a day) for a penny, but that doesn't include FUEL. Yeah, that's right. So that penny fare from Detroit to Vegas is actually a penny plus $54.22 in fuel and $10.70 in taxes and fees that don't go to Spirit and an $8 passenger usage fee that they get. This is absurd.

Here's my rule of thumb: Anything that you can't avoid should be included in the base price.

Can you take the trip without fuel? No. Can you avoid the passenger usage fee? Not sure about that. Allegiant has something similar that you can avoid if you go to the airport to purchase, so I'm ok with that. But I don't know if Spirit has the same thing. Even with these additions, the fare is low, but it's not a penny.

Let's say you want to check a bag. Sticking with a domestic run, that'll be $25 for the first bag and it goes up from there. $9 Fare Club members get a $10 discount. Want to carry on? That'll run you $30 in advance. If you pay at the gate for checked or carry on bags, it'll run you $45. You can still bring a personal item that fits under your seats for free. Things like umbrellas, diaper bags, and cameras are free as well.

But you can see how quickly this adds up. Now, if I just want to bring a personal item, I love this structure, because I can pay less for my base fare while those who want to pay more can bring more on. It makes sense, but will it work from an operational perspective?

People who have paid for carry-ons will board first. After that group boards, anyone else with a carry-on will have to fork over $45 a pop at the gate. That will slow down boarding, especially at first, but when people catch on, it will solve the problem of people trying to bring everything onboard to avoid checked baggage fees.

My guess is those who don't know how this works will be in for a surprise. I'd expect to see complaints jump in the beginning, but really, anyone who books Spirit should know what they're getting into these days.

[Photo via Flickr user timsamoff]