Business travel

The $100 carry-on bag fee

Spirit Airlines' hefty new bag fee

May 7th 2012, 19:40 by N.B. | WASHINGTON, D.C.

THE dying-veteran ticket debacle wasn't the only bad press Spirit Airlines, an American discount carrier, received last week. The airline also announced that it would soon begin charging passengers $100 to bring a carry-on bag aboard a flight. The fee is only $50 if you pay it at a check-in kiosk or ticket counter instead of the boarding gate, but most American airlines don't charge for carry-on bags at all, so Spirit's decision triggered a fair measure of outrage. The Detroit Free-Press wrote that the move showed "contempt for novice travelers", and other coverage took a similar tone.

Over at The Atlantic, though, Jordan Weissmann posted a defence of Spirit's new fee. Mr Weissmann noted, quite reasonably, that the cost of carrying baggage is simply folded into other airlines' ticket prices, and that by disaggregating the baggage fee, Spirit is saving money for baggage-free flyers who would otherwise subsidise their fellow passengers. "[I]f you only bring on board a small item that can fit under your seat, your ticket is probably subsidising the jerk four rows up who packed a bowling ball in their duffel bag," he wrote. This is true. But Mr Weissmann's post contains what we in the journalism business call a "to-be-sure paragraph", and it's a big one [emphasis added]:

Of course, all of this needs a caveat. The fairness of a fee-for-service system depends on a company's level of transparency with customers. If charges are masked in fine print, they simply become a way of fooling fliers into shelling out more than they intend to pay. Spirit itself has a somewhat spotty record with fare transparency, and it would be a pity if unsuspecting customers started getting whacked with $100 charges.
But as long as the company is upfront about their charges, really, there's no reason to gripe.

That's a big "if", especially in a post defending new fees from an airline with a "spotty" record of being transparent about them. (Spirit, regular readers will recall, drew Gulliver's ire in January for charging a "passenger usage fee".) Not all travellers are sophisticated enough to pay attention to every little fee airlines add to base fares, and airlines don't have a particularly stellar record of making such fees transparent or easy to understand. Moreover, passengers are generally right to pay less than full attention to the fine print: most people's energy is better spent on things other than understanding all the ins and outs of dozens of different airlines' fee structures. Reading the fine print of every agreement we must make to fully participate in modern society wouldn't be rational; it'd be a waste of time. Most people don't read the iTunes terms of service, either. Instead, customers trust that Apple—or Spirit, or whichever company—is trying to provide them with a service, not take advantage of them. When companies break that trust, they lose customers, get bad press, get sued, and sometimes even draw the attention of government regulators.

Bag fees are fine if airlines disclose them and treat customers fairly, but corporate leaders would do well to remember that the misbehavior of just a few companies could easily bring calls for more regulation of fees and pricing structures. And no airline wants that, right?