I don’t think there’s an airline which is more transparent and unapologetic about their fee structure than Spirit Airlines. And I mean that as a compliment. Are they for everyone? Nope. But they have really low fares and even with all their fees are typically still less expensive than the competition.
Spirit & Frontier raising bag fees this holiday season
- The price increase is valid for travel between December 16, 2015, and January 4, 2016
- With this increase we’re seeing the price of checked bags go up by $2 this holiday season, regardless of whether you pay for your checked bags when booking the flight, at online check-in, or at the airport
Frontier is being a bit more drastic in raising their baggage fees, with larger increases and also a greater range of applicable dates:
- The price increase is valid for travel between November 19, 2015, and January 5, 2016, between February 11 and April 4, 2016, and between June 9 and August 16, 2016
- With this increase we’re seeing the price of carry-on bags go up by $5 at booking and up to 24 hours before departure, by $10 at web check-in, and by $5 at the airport
- The price of checked bags is going up by $5 at booking and up to 24 hours before departure, and by $10 through all other means
In the case of Frontier I don’t even think it’s fair to call this holiday surge pricing, but rather just an all around increase in the price of bags. Should consumers be excited about low cost carriers raising baggage fees? Of course not.
But I also don’t think we can hold it against the airlines that they’re trying to maximize shareholder value. Based on supply and demand, I don’t see anything wrong with charging extra for checked bags over the holidays, just as the airlines charge extra for tickets over the holidays.
When politicians get involved
Interestingly Florida Senator Bill Nelson has taken it upon himself to write the airlines and “request” they rescind holiday surcharges:
According to recent reports, at least two airlines plan to impose “holiday surcharges” that will increase baggage fees during the peak holiday travel period. These increased surcharges fly in the face of declining fuel costs and appear focused on increasing profitability on the backs of American families. That’s why I am seeking an assurance from your company that you will not impose a holiday surcharge on baggage fees. Furthermore, if your company does plan to impose holiday surcharges, I request that you rescind those plans immediately.
This seems like an odd argument to make:
- The cost of airfare has never reflected the cost of providing it. Just look at how convoluted airline pricing is, and that a ticket from San Diego to Los Angeles can cost more than a ticket from San Diego to New York. Consumers had no sympathy when the airlines were on the verge of liquidation several years back, even though fares were extremely low.
- The Senator correctly notes that these changes seem focused on “increasing profitability.” Maybe I’m missing something, but in a capitalistic society with shareholders, isn’t that what a company is supposed to do?
Obviously Nelson is grandstanding, as politicians do, because it’s popular to hate on the airlines. I just think that if politicians are going to take it upon themselves to attack airline pricing they should be focusing on the real problem, which is the airline oligopoly they’ve created over the past several years with the “big three.” Issues like the slot swap between Delta and United at Newark, which is creating a near monopoly in the market.
The low cost carriers are the solution, and not the problem, even with increased fees. The more profitable they are, the bigger the incentive for new entrants to join the market, and the lower airfare will be long term.
Don’t get me wrong, I don’t like to see airlines raise fees. But I also like to see airlines thrive, so that hopefully new entrants will join the market. The job of airlines is to maximize shareholder value, and in a free market that’s by charging what the market will sustain, which will hopefully encourage new entrants to join the market, and long term that will drive down fares.
But to somehow shame airlines for trying to maximize shareholder value seems a bit ludicrous. Politicians should be focused on the “big three” carriers and the monopolies they’re creating in certain markets, rather than the low cost carriers, who are just there to try and keep them in check.
What do you think? While no one likes higher fees, is it wrong for low cost carriers to increase baggage fees over the holidays? And is it something politicians should take a stand against?