Spirit Air, always on the cutting edge of ancillary fees and revenue enhancement, has come up with a new plan for pricing their flights. Everything will be “a la carte” from the fuel to taxes to a booking fee to a soda on board. And, now, they’ll also be charging to reserve space in the overhead bins. From their press release:
In order to continue reducing fares even further and offering customers the option of paying only for the services they want and use rather than subsidizing the choices of others, the low fare industry innovator is also progressing to the next phase of unbundling with the introduction of a charge to carry on a bag and be boarded first onto the airplane.
This move is the first foray into what is probably the last unbundled service that airlines offer which was previously considered part of the services included in the fare purchase. Lavatory usage is still free – for now, RyanAir is still working on that – but no longer can one assume that carry-on baggage is part of flying. The carry-on baggage fee also includes access to early boarding of the plane, something else that the airline has routinely charged for. Yes, Spirit will still permit under-seat bags for free, but overhead space will require payment. And with the quite limited pitch that Spirit offers on their planes losing space to put your feet is a painful decision to make.
The cost for space in an overhead bin will be $20 for members of Spirit’s $9 club, $30 for everyone else if purchased before arriving at the gate and $45 at the gate. The $45 price is the same as it would cost to check the bag in the hold at the gate. The $30 at the counter is actually more than the $25 it would cost to check a first bag on a domestic flight and the same as the price for checking a second bag or a first bag internationally.
So the (many multi-)million dollar question is will this idea gain traction? Will other carriers follow? For now, the answer is no, but it is entirely to soon to know for sure. JetBlue has already released a post on their BlueTales blog mocking the idea a bit. No other airlines have commented on it publicly. For most customers the process of buying a plane ticket is split into two very distinct cost areas: the initial purchase and the day-of-travel expenses.
Over the past two years, since the charges for checked baggage started growing rapidly in the US, the carriers have not been able to drive significant differentiation of their products based on whether they charge for those checked bags; customers are still generally willing to pay $10 less for a ticket where they’ll have to pay $25 at the airport for baggage. Will this next step of unbundling be enough to make consumers actually look at the total price picture more closely before buying? I’m guessing no, at least not for the folks who are willing to pay the cheapest fares that Spirit offers. And that might just be enough for other carriers to consider a similar charge. Probably not, but there is a small opening there.
Some additional coverage on the story can be found at:
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