Video: Airline to charge $45 for carry-on bags

  1. Transcript of: Airline to charge $45 for carry-on bags

    BRIAN WILLIAMS, anchor: A sad first to report in the airline industry today, and the experts say, unless passengers rise up, this kind of thing is going to get worse. Spirit Airways is going to start charging to put a carry-on bag into the overhead storage bins, up to $45 each way, less if you reserve a spot in the overhead or join their so-called fare club. Those who've paid to bring a bag on board will board first. Others will apparently have to pay on the spot. A Spirit Airline executive, perhaps forgetting people often have to fly with, say, small children, actually said, quote , "Bring less, pay less. It's simple."

updated 4/7/2010 8:52:11 AM ET 2010-04-07T12:52:11

Baggage fees have sneaked out of the belly of the plane and into the overhead bin.

Spirit Airlines will charge as much as $45 each way for a carry-on bag starting Aug. 1. Personal items like purses and laptop computers that fit under the seat will still be free.

Spirit is the first airline to charge passengers for carry-ons. It's sure to seize the attention of passengers as well as airline executives who are probably glad that Spirit tried it first.

"I didn't think anyone would go this far," said Jay Sorensen, an airline consultant who specializes in airline fees.

Industry observers said Spirit's move doesn't mean it will spread to the big airlines. None of the major carriers changed their fees on Tuesday.

Spirit's new charge for a carry-on is $45 if paid at the gate, and $30 if paid in advance. Spirit said on Tuesday that it reduced its lowest fares by $40 on average, so most customers won't really pay more to fly. Customers who pay for space in the overhead bin will also get to board the plane earlier.

Spirit CEO Ben Baldanza said having fewer carry-on bags will help empty the plane faster. He said the idea is to get customers to pay for individual things they want, while keeping the base fare low.

"The beauty of it is they will do what they think is best for them and will now have the choice," he said.

Spirit is based in Miramar, Fla., and is privately held. Most of its flights carry leisure travelers from big airports in the U.S. through Fort Lauderdale and on to Latin America.

Like Ryanair in Europe, Spirit has relatively low base fares but charges lots of add-on fees, including $16 per round-trip ticket to book at its Web site. The only way to avoid the fee is to buy a ticket at the airport ticket counter.

It has fewer than two dozen planes. Its 150 daily flights are about one-twentieth as many as American Airlines and its regional partners offer.

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Even though Spirit is a minor player, big airlines will watch it to see whether customers are willing to pay for carry-ons, Sorensen said. "It's a potential source of revenue for an industry that still needs it."

The problem with charging for checked luggage but keeping carry-ons free is that passengers lug as much onto the plane as they can, he said. Spirit's move does help solve that problem, Sorensen said.

Flying the fee-filled skies

Spirit said it will add measuring devices at the gates to determine which carry-ons are free and which ones will incur the charge. Things like diaper bags, umbrellas, strollers, and reading material won't count as a passenger's free personal item.

The big airlines stepped gingerly when they started charging to check baggage in 2008, making a move, then watching to see who matched it. Now, all of them charge to check a bag on domestic flights except Southwest (two free bags) and JetBlue (one free bag).

Spirit CEO Baldanza said he's confident the airline will stick with the new carry-on fee.

"Our decision to do it isn't dependent" on other carriers following along, he said.

He said he doesn't see the bag fee as a revenue boost as much as an operational help. Dealing with large carry-ons has delayed departures and slowed down unloading after a flight.

On domestic flights, checking a bag will be $5 cheaper than carrying it on, which could encourage passengers to check more bags. Baldanza said that's fine with him, since it costs the airline about as much to load one bag as it does to load 100 into the belly of the plane.

While it's too soon to know whether passengers will accept the carry-on fee, it actually makes sense to encourage them to check bags as Spirit has done, said Genevieve Shaw Brown, senior editor at Travelocity.

Ever since checked bag fees began, "the boarding process has become more chaotic, there's more tension among travelers fighting for space in the overhead bin," she said. "It also becomes less efficient to board and deplane, which is not good for airlines that make money on being efficient."

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