Spirit Airlines (NK / NKS)

Spirit Airlines devine prima companie care taxeaza bagajul de mana

Titlu : http://news.airwise.com/story/view/1270680986.html
Sursa : http://news.airwise.com/story/view/1270681350.html
Autor : Reuters
Data : 07/04/2010

Citat :

Every US airline is thinking of ways to get more money from their passengers. Few have provoked the outrage that Spirit Airlines has with its new carry-on luggage fee.

The low-cost carrier is taking the blows that come with being the first to seize on an unpopular, but possibly lucrative idea. That does not mean that it will be the last.

A few years ago, paying up to USD$45 to stow a piece of luggage in the overhead bin seemed as unthinkable as installing a pay toilet in economy class. But it's a new day for US airlines as many struggle daily for survival in a volatile business with razor-thin profit margins.

One of the ways to do that is to think up as many new fees as they can, and hope enough other airlines do the same thing, forcing passengers to deal with it or not fly at all.

Some people voiced support -- tepid support -- but most have nothing good to say about the carry-on fee.

"Now it's like there's nothing sacred anymore," said Adam Barrera, 24, a Houston-based blogger on cars. Barrera said he flies about three times a month, usually on Continental Airlines. He has never flown on Spirit.

Florida-based Spirit, which flies to 40 destinations in the United States, the Caribbean and Latin America, shrugged off criticism, noting that it would lower its fares to offset the new carry-on bag fee. Bags placed under the seat in front of a passenger remain free.

"I would pay USD$5 for guaranteed space right over my seat, like a locker," said John DiScala, editor-in-chief of JohnnyJet, a travel information site, who has not flown Spirit. "But USD$45?"

ROCK-BOTTOM PRICES

Still, Spirit's sales have jumped 50 percent since the airline unveiled the new fee and fare cut versus the previous week, chief executive Ben Baldanzas said on Wednesday.

"On its face, (the fee) is maybe repulsive to some people," Baldanzas said in an interview. "But at the same time, we've lowered the base fares by more than the amount of the fee."

Roughly 18 percent of Spirit's available seats are now being sold at a penny plus the cost of fuel and taxes.

For some people, a baggage fee could be a good thing, or at least tolerable. Many passengers grumble about the large bags that people bring on board planes instead of paying to check them. For others, the fee might not cancel out the low cost of a discount airline's fares.

"With Spirit, it's very clear what you're going to receive," said Jay Sorensen, a consultant with IdeaWorks. "A rock-bottom, low fare, and for a tremendous number of customers that is what is most important."

Spirit is charging passengers USD$45 for carry-on bags if they pay at the gate. But if they pay at the ticket counter or online, the fee is USD$30.

It costs less -- USD$25 -- to check your first bag, if you pay online.

This strategy is deliberate, Baldanzas said, to lessen the time it takes to turn around an aircraft. Spirit estimates it will save 5-7 minutes per flight with this new fee, saving as much as 20 hours a day.

This extra time is critical to Spirit's goal of boosting its number of hours flown by 10 percent in 2010 and another 20 percent in 2011, Baldanzas said.

Spirit is too small to sway the industry in favour of a carry-on bag fee, but it is reasonable for major airlines to look into it, said Morningstar equity analyst Basili Alukos.

"I think about it, and it makes sense for airlines to charge for carry-ons," Alukos said. "There is more of a convenience for bringing your bag on the place. It basically reduces the time you would want to wait."

FEE FATIGUE

The airline industry has been battered in recent years by low-fare competition, volatile fuel prices and a weak economy that eroded travel demand.

Major carriers have fought back with capacity cuts and tweaks to their business models that rely much more on ancillary revenue from new fees for items and services that once were included in the ticket price.

One of the most controversial fees was for checking a single bag. More than any other, the single bag fee opened the door for new fees. Industry watchers say there is always room for more.

So far, no major airlines have announced charges to match the Spirit carry-on bag fee. But none has ruled it out.

"We have taken no action on this," said a spokesman for American Airlines. Continental declined to comment.

Spirit has said that items such as umbrellas, cameras, coats and strollers will not be charged.

A lingering question is how many more fees passengers can deal with.

"I know there is a welling of unhappiness at the nickel and diming of passengers," said Standard & Poors' analyst Jim Corridore. He said travellers could fight back by finding alternatives to air travel.

"I will not be at all surprised if someone else tries it (the fee)," he said. "My personal opinion is that it's too much for the passenger."

Titlu : Five US Airlines Won't Add Carry-On Fees
Sursa : http://news.airwise.com/story/view/1271633093.html
Autor : Reuters
Data : 18/04/2010

Citat :

US Senator Charles Schumer said on Sunday that he has commitments from five airlines to not follow the lead of Spirit Airlines by charging passengers a fee for carry-on baggage.

Schumer said that in personal calls to airline executives he received promises from American Airlines, Delta Air Lines, JetBlue Airways, United Airlines and US Air Airways not to charge fees for carry-on bags.

"We have begun to put the brakes on runaway and out-of-control airline fees," the New York Democrat said in a press release. "I am pleased some of the major carriers have responded to our efforts and have agreed not to charge for something that has always been free."

Schumer said he plans to continue to urge US airlines to make similar commitments and is encouraging privately held Spirit to reverse its decisions to charge up to USD$45 for carry-on bags that do not fit under seats and which are stowed in overhead bins.

Schumer and other lawmakers have proposed legislation that would block the fees by declaring carry-on bags as essential for air travel.

Apparently a Treasury Department ruling last year opened a loophole that encouraged airlines to charge more fees rather than raise air fares.

Airlines pay a 7.5-cent tax to the federal government for every dollar they collect in fares. But no tax is imposed on fees collected for non-essential services.

Schumer said last January the Treasury Department issued a rule calling carry-on bags non-essential for air travel, creating an incentive to charge a fee.

Spirit's announcement to charge for carry-on bags created an outcry against mounting airline fees, which have been added for checked luggage, seat assignments and snacks. One airline is reportedly considering charges to use the lavatory.

United Airlines spokeswoman Robin Urbanski confirmed the airline would not be charging fees for carry-ons, although it does charge USD$35 for checked luggage.

"We have no plans to do it," Urbanski said of adding carry-on fees.

JetBlue Airways spokesman Morgan Johnston said not only would that airline continue to allow a free carry-on bag and a personal item, but would also continue to carry the first checked bag free.

Titlu: Controversy over bags fees sparks bookings boost for Spirit
Sursa: Flightglobal
Autor: Sandra Arnoult
Data: 06/05/2010

Citat :

Spirit Airlines remains unapologetic about its decision to charge passengers a $45 fee for carry-on bags saying that the controversy, generated by the announcement in April, has in fact sparked interest and a robust increase in bookings.

Bookings beginning 1 August, when the new baggage fee goes into effect, are 50% higher than for the same period a year ago.

"We certainly expected a lot of media on it and we probably got more than we expected," said Spirit CEO Ben Baldanza during a 6 May speech Washington, DC. "The thing that was different than what we expected [was] the first 48 hours were very negative. A lot of our time was in clarifying the message. The more we clarified the message, the more balanced the debate was."

Rather than taking a defensive stance, Spirit decided to capitalise on the media attention. "We made a decision internally to try push the media as much as we could on the story," Baldanza says, reasoning, "If one more mistress says 'I slept with Tiger Woods' how much worse is his reputation?"

While in Washington, Baldanza met with Secretary of Transportation Ray LaHood, in what he describes as a "cordial" meeting. "We had a very good discussion, it was very calm and open," Baldanaza says.

Some officials jumped on the bandwagon early on to criticise Spirit. But Baldanza said much of the focus was directed at the company's need to provide greater transparency in explaining fares and fees to customers before they arrive at the airport. "They've [DOT] always been pushing us on the disclosure. Make sure people know they have to pay for it," he says. "We've been working with them very positively, and we agree with them completely."

The low cost carrier based in Miramar, Florida operates a fleet of 30 A320 aircraft to 40 destinations, focusing heavily on international routes to the Caribbean and Latin and Central America.

A major share of its customers would be considered low income and Spirit's fares allow them the opportunity not afforded by legacy carriers, Baldanza points out.

Spirit charges a low fare, and then adds fees for other items, such as onboard snacks or baggage. Last year, 20% of the carrier's revenue was generated by ancillary fees.

Bandana acknowledges that Spirit is often compared to LCC Ryanair.

"Ryanair has been an inspiration to us in some ways," he says, but notes that Spirit does not go out of its way to antagonise customers, and that it won't ever charge for the use of toilets as proposed by Ryanair.

He compares legacy carriers to Nordstrom while Spirit is more in line with a no-frills retailer like Costco.

"We're not for everyone. We know who we are and we know who we are not," says Baldanza. "We go to points that aren't exactly garden spots in the world but there are a lot of people who want to go there."