Video: Spirit CEO defends carry-on fees

  1. Closed captioning of: Spirit CEO defends carry-on fees

    >>> speaking of airlines , today the head of discount airline spirit is defending the company 's decision to start charging for carry-on bags. over the past decade flying in comfort has become increasingly a bigger cost. since 2001 airline meals have been dropped. most airlines now charge for snacks. most don't offer free newspapers to read onboard. there are fees for blankets and pillows and now nearly all airlines have some sort of charge to check a bag into the luggage part of the plane . we have the ceo of spirit airlines with us and a good day you to.

    >> how you doing, alex ?

    >> doing okay. said i was going to grill you. $45 for a bag to bring onboard that plane as of august , to put it under your seat or in the bin above you.

    >> actually that's a little bit wrong.

    >> good.

    >> anything that fits under the seat is free.

    >> good.

    >> as well as a long list of exemptions including strollers, baby diapers, bottles, coats, things you want to eat onboard, things to read. if it fits under the seat in front of you it's free. it's only the big --

    >> a purse is okay.

    >> if it's got to go in the overhead bin it has the charge but it's not a $45 charge . it's a $30 charge or $20 if you're a member of our outraged by that but when they're actually sitting down to buy a ticket and they go to their website, their favorite website or call their favorite reservations agent or whatever they do to buy their ticket they'll look at the total cost of their travel. nobody buys just a carry-on bag or just a checked bag. they buy a whole trip. when you look at the total cost of travel every time we check prices after august 1st when we implement this fee the prices on spirit after you pay for the carry-on bag, after you pay for checked bags are 30% to 40% less than our competition in total.

    >> you're telling me that you are taking a cut in money ? i mean, is that -- is spirit making more money then or less money because of this 45, well, no, $30 checked bag fee but lowering prices by $40.

    >> right.

    >> so you're going to have less revenue?

    >> well, it's going to be revenue neutral but more people we expect will travel because the fares are lower. let me tell you how this really will work for us. we're averaging five to seven minutes on average of delay at our gates because the bags don't all fit on the airplane. we've got to yank bags from customers and on the jet wing and check them. when we save that five to seven minutes a day times six flights a day times 30 airplanes that's 20 hours a day of new airplane flying without even buying an airplane. we're going to save enormous costs from this. we're going to save a lot of customer frustration. and that's where this airline will make up that difference.

    >> it's clear you absolutely believe in the vision so we thank you for sharing it with us. i told you in the makeup room i flew spirit once to detroit and it was a good

updated 4/21/2010 9:31:27 AM ET 2010-04-21T13:31:27

The president of Spirit Airlines says there's been no significant fallout from his new charge for carry-on bags.

Ben Baldanza defends his business model in a nationally broadcast interview while acknowledging it didn't sit well in some quarters. He joked that he'd never consider charging for bathroom use.

Appearing with Baldanza on NBC's "TODAY" show, Sen. Charles Schumer said Spirit set a bad precedent by charging up to $45 for carry-on bags and said he hopes competitors don't follow suit. The New York Democrat said there might be legislation if the trend continues.

Baldanza said carry-on fees "can cause some outrage," but said Spirit simultaneously lowered its air fare and its passengers aren't paying appreciably more than before.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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