Will other carriers copy Allegiant and Spirit with new carry-on baggage fee?

April 17, 2012

Ambiance, Services

Baggage photo small Will other carriers copy Allegiant and Spirit with new carry on baggage fee?When Allegiant announced that it would begin charging a fee for carry-on bags, it was a shock to the entire airline industry. The shock was not that Allegiant would charge bags fees, but rather that it took the so long for the airline to do it.

In the US, Spirit Airlines led the way with a carry-on bag charge two years ago, and the immediate backlash to the idea was tremendous. It became so heated that the biggest US airlines had to actually promise Senator Chuck Schumer (D-NY) that they wouldn’t charge for carry-ons. But the chorus of boos eventually quieted, and Spirit has been very happy with its change. Not only has it raised revenue from those who need to bring carry-on bags, but it made boarding so much quicker and easier that turn times dropped by seven minutes. For an airline that tries to get as much out of its fleet as it can, those seven minutes are crucial.

That turn time issue doesn’t matter to Allegiant as much, however. It prides itself on low aircraft ownership costs and that means it isn’t focused on bumping up utilization to nearly the same degree as Spirit with its shiny new Airbus aircraft. When I spoke with Allegiant spokesperson Brian Davis, he said that the carrier hadn’t even investigated whether or not it would help reduce turn time. That could easily end up being an added bonus down the line, but the decision itself was made based on the promise of other benefits, mainly monetary.

Allegiant will, of course, benefit from additional revenue. If purchased online, carry-on bag fees range from mostly range from $10 to $18 one way, going up to $35 if purchased at the airport. While checked bag fees pushed people to cram as much as they could into a carry-on, this will reverse that trend without sacrificing revenue. Instead, early results even show a very slight increase in checked bags but the change isn’t statistically relevant.

Critics complain that everyone needs a carry-on bag so this isn’t actually an optional fee. That shows a misunderstanding of exactly what this fee truly is. Travellers can still bring a carry-on bag (usually called a “personal item” in industry parlance) without charge as long as it fits underneath the seat. Essentially, this new charge is a rental fee for bin space.

Is it realistic to think that travellers can survive without paying the fee? Early results show that it is. Allegiant has made the carry-on fee very prominent in the booking process. In fact, people have to select whether or not they’ll bring a carry-on or they can’t complete the booking. So far, less than a third of travellers have signed up for a carry-on at the time of purchase since the fee went into effect.

Does this mean we’ve reached the tipping point? Will other airlines jump on the bandwagon? I wouldn’t be so sure. Allegiant, like Spirit, is a niche airline and people have different expectations when they fly those airlines. It’s not the same with the rest of the US industry.

It’s very possible that the carry-on fee is one of the untouchables, like soda before it. Allegiant and Spirit both charge for soda and haven’t had any issues with the program. But when US Airways tried to charge for soda, the backlash was astounding. The airline had to backtrack very quickly due to the negative response.

It wouldn’t be a surprise if any attempt to introduce a carry-on fee met the same fate at most other airlines, but we won’t know for sure until someone tries. That’s might be more of an “if” than anything else.  There are political considerations around these fees, as previously mentioned.

As mentioned, American, Delta, and United along with US Airways and JetBlue all promised Sen Schumer that they would not charge for carry-ons. It wouldn’t be the first time a Congressional promise has been broken, but it could prove to be a very bad idea for those airlines with a vested interest in the New York area.  That certainly includes JetBlue, Delta, and United.  And if those three aren’t doing it, then American won’t either . . . even if it ends up being US Airways management running the show at a combined airline.

Ultimately, is this the right move for Allegiant? Yes, of course. It fits perfectly with the rest of Allegiant’s fee portfolio. But does it mean that others will be following in short order? I wouldn’t count on it.  More likely than not, this will simply be another differentiator between the ultra low cost carriers and their pricier cousins.

share save 171 16 Will other carriers copy Allegiant and Spirit with new carry on baggage fee?
, , , , , , ,

About Brett Snyder

Author of award-winning consumer air travel blog, The Cranky Flier, and President and Chief Airline Dork of Cranky Concierge air travel assistance. Also writes a weekly column about air travel for CNN.com. Brett previously worked in pricing, marketing and strategy roles with several airlines inc. America West and United.

View all posts by Brett Snyder
advert

Trackbacks/Pingbacks

  1. Cranky on the Web (April 16 – 20) - >> The Cranky Flier - April 21, 2012

    [...] Will other carriers copy Allegiant and Spirit with new carry-on baggage fee? – APEX Editor’s Blog I look at Allegiant’s carry on fee, and whether others might follow. [...]

  2. 24/7 Hotel Deals | Cranky on the Web (April 16 – 20) - April 21, 2012

    [...] Will other carriers copy Allegiant and Spirit with new carry-on baggage fee? – APEX Editor’s Blog I look at Allegiant’s carry on fee, and whether others might follow. [...]

  3. Cheapest Hotel Room Rates | Cranky on the Web (April 16 – 20) - April 22, 2012

    [...] on the Web (April 16 – 20) Will other carriers copy Allegiant and Spirit with new carry-on baggage fee? – APEX Editor’s Blog I look at Allegiant’s carry on fee, and whether others might [...]

Leave a Reply