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Airline CEO: Why we're charging for overhead space

Frontier Airlines, the ultra-low cost carrier, is not "nickel-and-diming" customers by charging them for carry-on bags, CEO David Siegel told CNBC on Monday.

Frontier announced the new fees last week. Travelers now must pay $20 to $50 to place bags in overhead bins, depending on whether they pay online or at the airport gates. Siegel said the airline wants to change the culture of air travel and have more customers check bags rather than scramble for overhead space.

"We're trying to create a more civilized experience on board and not have this crush of bags at the gate and not have this fight for bin space," Siegel said on "Squawk on the Street."

Read MoreTravelers love airlines—except for flying

Siegel said the increased fees come after the airline lowered ticket prices by 12 percent across the board, and that the measure gives travelers more options and ways to save money. Passengers pay for what they want to use, he said, adding that many misunderstand the low-cost airline model.

Frontier travelers can still carry on one personal item at no extra charge.

—By CNBC's Jeff Morganteen. Reuters contributed to this report.

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