Monday, April 19, 2010

Spirit Airlines is Polluting the Low Price Category

Spirit Airlines is under attack. It announced a few weeks ago that it would begin charging passengers $45 to carry a bag onto the plane that could not fit under the seat. In other words, the overhead bins are now no longer free. Under increasing pressure from travelers, several members of Congress sent inquiries to the other airlines to determine if they would follow suit. Those who responded, pledged that they would not initiate such a charge.

Spirit is standing by its decision. Its CEO, Ben Baldanza, tried to sell this decision as one being made to help passengers speed their way through security. He noted that many passengers were being held up due to others who chose to bring bags on the airplane. Besides, he noted, Sprint had cut its ticket prices so passengers should be happy with the overall cost of travel. If Disney fantasies were real, Mr. Baldanza would be distinguished by the nose he grew as he read this load of nonsense to the media. This was not about speeding passengers. This was about finding new ways to tax the passenger to make more money in a business that has historically lost money.

This would not be quite as bad if Spirit were to drop the charges for its checked bags. But, those fees also remain. Of course they dropped the price of tickets. The real price is when all costs are factored in. Stop trying to sell crap as being beneficial to the passenger!! This is a bundled price tactic that plays to the business traveler.

What should be done about this? Nothing. Please keep Congress out of this. Let the market become the jury. I believe that Spirit has every right to conduct their business as they see fit (or unfit). This is not a major airline that has passengers in hubs at their mercy. This is a minor player who is trying to gain share by selling low. However, because they have not been as efficient as some other carriers, like Southwest or JetBlue, they are trying to make up the difference with fees. I guess a day-trip business passenger with just a brief case might find this "deal" worthwhile. The traveler who needs to bring clothes along is footing the bill.

Brands, like Spirit, that want to be low-cost alternatives need to cut their expenses and become more efficient so that they can be truly low-cost alternatives. Spirit is the US equivalent to Ryan Air in Ireland that wants to charge for using the bathroom on board.

I believe that every company has the right to manage itself well or to destroy itself if it so chooses. Spirit has not done anything illegal; they have done something stupid. Let the market judge their stupidity. Hopefully, they will be taught a lesson. If not...well, as PT Barnum said: "there's a sucker born every minute".

2 comments:

Elliot Schreiber said...

thanks for the comment. Glad you are enjoying the posts.

Adam Schreiber said...

Great article! People are too quick to get the government involved. It seems that when unhappy, society turns into a kindergarten class - all looking for the teacher to tell on the person next to them.