Investor Agenda

Un-Spirited Announcement


Just when you think the airlines can’t charge for anything else, low-cost carrier Spirit Airlines just announced that it will charge customers for carry-on luggage, up to 45 bucks. What, extra fees for a carry-on? Yes, it’s only free if it fits under your feet.

Ben Baldanza, Spirit Air CEO was on CNBC this morning defending this decision.

Baldanza said, “We all know that boarding airplanes have become a crowded and often a frustrating event because customers who want to avoid checked bag fees often bring everything onto the plane. Sprit is reacting to that by lowering fares, lowering checked bagged fees, making the boarding process quicker. Even for the customers who choose to still carry on a bag, we’ve lowered the fares more than the amount of the bag fee. So everyone wins.”

Everyone wins? I’m not so sure.

But wait — experts say this may be the start of another trend.

Airlines are doing their best to monetize anything and everything they can, says Basili Alukos, Equity Analyst MorningStar. And they’re likely to think more of these “ideas” of this nature going forward.

Mike Paul, President of MGP & Associates is convinced that taking money out of pockets can turn consumers off. Paul says, “Spirit Airlines is being labeled as an airline that no one should take unless it’s absolutely necessary.”

“Our goal is to make flying as cheap as possible,” said Baldanza. Well, how much do you really save when you add a carryon fee here, a checked bag there and other costs that may be tagged on?

Watch out for this spirited debate between Basili Alukos and Mike Paul at 450PM ET on the Closing Bell.



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