Which airline made the most money on baggage fees?

by Tom Johansmeyer on

Last year, baggage fees were used by airlines to make up for lost fare revenue, as the recession kept people on the ground. This year, it’s just been a great source of extra revenue, as passenger traffic and fares are up – and the fees haven’t gone away. Almost all airlines are getting in on the action, some more egregious than others.

Well, data for the third quarter of 2010 is in, and we can finally take a look at who’s hitting us hardest … and for how much. The numbers will probably shock you. The top baggage fee-grabber owned close to 30 percent of the total baggage fees charged in the United States, a market that has reached $2.6 billion for the first three quarters of the year, and the top five dominate with approximately 80 percent of the total fees charged for bags, according to data from the Department of Transportation.

Let’s take a look at the top five airlines for baggage fee snatching (and then the rest):1. Delta Air Lines, $733 million: in fairness, Delta is the largest airline in the United States, so it’s to be expected that it will generate the most revenue.

2. American Airlines, $431 million: the third-largest airline hits the #2 spot for baggage fees, implying an aptitude for prying open customer wallets yet to be recognized by its competitors.

3. US Airways, $388 million: again, this is an impressive take, as evidenced by the distance between US Airways and Continental, in the #4 spot.

4. Continental Airlines, $258 million: this almost makes the airline look downright reasonable, especially when it’s year-to-date baggage fees aren’t even as substantial as what Delta raked in during the third quarter alone!

5. United Airlines, $239 million:

And, the rest:

6. AirTran Airways: $112 million

7. Alaska Airlines: $81 million

8. Spirit Air Lines: $56 million

9. Frontier Airlines: $44 million

10. JetBlue Airways: $43 million

11. Allegiant Air: $43 million

12. Hawaiian Airlines: $40 million

13. Virgin America: $27 million

14. Southwest Airlines: $23 million

15. Republic Airlines: $18 million

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16. Horizon Air: $13 million

17. Sun Country airlines: $9 million

18. Mesa Airlines: $2 million

19. Continental Micronesia: $2 million

20. USA 3000 Airlines: $2 million

[photo by The Story Lady via Flickr]

Spirit Airlines discloses real consequences of poor customer service

by Tom Johansmeyer on

If you ever want the truth about anything, the smartest thing you can do is follow the money. Cash doesn’t lie, regardless of the people who are wielding it. So, if you don’t think airlines have any real risk because of poor customer service – that everyone just expects and lives with the worst – it pays to check out the recent Spirit Airlines financial filing.

Spirit is looking to go public with the hopes of raising $300 million. To do so, of course, it had to file all kinds of paperwork with the SEC, including a Form S-1, which includes, among other things, the risks the company faces. Think of it as a warning label for potential investors.

Based on the document, covered over on Elliott.org, service is enough of a risk that Spirit feels warrants mentioning:

Negative publicity regarding our customer service could have a material adverse effect on our business.

In the past we have experienced a relatively high number of customer complaints related to, among other things, our customer service, reservations and ticketing systems and baggage handling.

This isn’t just theory, here. Spirit is disclosing what it has actually experienced. It’s a touch of North Korean-style self-criticism that’s eye-opening for potential investors. It’s also a case of brutal honesty. Spirit is saying that it has had lots of complaints across virtually the entire company.

In particular, we generally experience a higher volume of complaints when we make changes to our unbundling policies, such as charging for baggage.

Okay, no shocks here.

In addition, in 2009, we entered into a consent order with the DOT in which we were assessed a civil penalty of $375,000, of which we are required to pay only $215,000 provided there are no further similar violations for one year after the date of the consent order, for our procedures for bumping passengers from oversold flights and our handling of lost or damaged baggage.

Not only does Spirit suggest that that there is a risk to future customer revenues, the airline also indicates that there are regulatory expenses associated with poor customer service.

Our reputation and business could be materially adversely affected if we fail to meet customers’ expectations with respect to customer service or if we are perceived by our customers to provide poor customer service.

Translation for investors = our service levels could cost you your money.

Spirit is in a tough spot, because it’s looking to enter the pubic capital markets – it isn’t there already, like the major characters. And, as they say, the first time can be uncomfortable and awkward.

Spirit Airlines uses Steven Slater to sell seats

by Julie Gerstein on

Irate JetBlue flight attendant Steven Slater has gone from controversial hero to marketing tool, thanks to a new campaign from JetBlue competitors Spirit Airlines. Their new promotion advises, “don’t be blue, slide down to low fares with our $35 coupon.”

This isn’t he first time Spirit’s done some cheeky advertising: In 2007 they held a “MILF” sale — claiming the acronym stood for “Many Islands Low Fares.” Sure. And more recently, they attempted to capitalize on the BP oil spill with a campaign encouraging people to “Check out the oil on our beaches.” Blech.

While a $35 coupon isn’t really enough for us to travel on Spirit Airlines, it could spell good things for Steven Slater. After all, we know that Mr. Slater wants his old job back, but perhaps he should give Spirit a ring.

Spirit Airlines starts charging up to $45 for carry-on baggage

by Scott Carmichael on

Today is the day that Spirit Airlines implements its new pay-to-carry-on baggage rule. The change was announced back in April, and even a grilling by Congress has not been enough to make them change their mind.

What this means to Spirit passengers is simple – if you arrive at the airport with carry-on baggage, and you did not pre-pay, you’ll be charged $45 for a single bag in the overhead compartment. Exceptions are made for the following items:

Umbrella, Camera, Infant Diaper Bag, Assistive Devices, Outer Garments (Coats/Hats/Wraps), Car Seat/Stroller, Reading Material, Food for the flight

So – if you make the mistake of showing up for your flight with a bunch of bags, you’ll easily burn through a nice chunk of your vacation money, long before you even arrive at your destination. As usual with airline fees, Spirit claims they lowered all their ticket prices to offset these new charges. If you fly Spirit, now may be the time to invest in a Scottevest jacket.

The entire Spirit Airlines baggage policy is described on their site.

New Spirit Airlines promo invites you to check out the “oil on our beaches”

by Scott Carmichael on

The cheeky ad designers at Spirit Airlines are at it again – after their “Muff Diving”, “DD” and “MILF” promotions, their newest stunt invites you to check out the “oil on our beaches”.

In this case though, the oil does not show the BP spill, but scantily clad women covering themselves in “Best Protection SPF 50″ sun tan lotion.

The promotion is actually not bad – and offers $50 off a variety of flights ($25 off each way), but as usual you’ll want to pay close attention to the fine print and other details of the promotion.

And of course, this promotion wouldn’t be a Spirit Airlines promotion if it didn’t create some major controversy – their PR department has had to issue a statement explaining that they are not mocking the oil spill, but pointing out that there are still plenty of beaches that are not impacted. Whether or not that was their actual intent, the promotion seems to be working, because it got our attention!