Bailout

Ben Baldanza defends charging for carry-ons

By Felix Salmon

Blog comment of the day comes from Ben Baldanza, the CEO of Spirit Airlines, with a crystal-clear explanation of why his fees for carry-on baggage make a lot of sense. It’s really worth reading the whole thing, but here’s the gist:

• The fees reduce the amount of time it takes to board and exit the plane, benefiting everyone.
• They reduce the chance that someone will be parted from their bag at the jetway because there’s no more baggage space left in the passenger cabin.
• They eliminate the perverse monetary incentive to carry on a bag.
• They make pricing transparent: Sprit has reduced fares “by at least as much, or even more than the amount of the carry-on fee”, says Baldanza. “Southwest makes you pay for checked bags even if you don’t check bags, since they have to cover those costs but give you no break if you don’t use the infrastructure. At Spirit, you spend only for what you use and don’t pay for what you don’t use.”

Baldanza says that Spirit’s sales “have soared” since the announcement was made; I’d love to see some numbers on that. And I can’t wait to see the reply to Baldanza from Bill Taylor, who wrote the original blog entry saying that the fee is “a horrible idea” and “a pretty interesting case study in the wrong ways for companies to respond to tough economic times–a reminder of how so many leaders manage to make bad situations worse”. Has Baldanza’s comment changed his mind at all?

Full post as published by Macroprudential on April 09, 2010 (boomark / email).