Paying for carry-on bags? It could happen on major airlines.

Might major airlines like United someday charge for carry-on bags? It could happen, an executive at another airline says. Photo: M. Spencer Green/Associated Press

Might major airlines like United someday charge for carry-on bags? It could happen, an executive at another airline says. Photo: M. Spencer Green/Associated Press

Could you someday have to pay for carry-on bags on United, American and Delta?

Andrew Levy, president and chief operating officer at Allegiant Air, says he thinks you will. His airline, known for selling deeply discounted coach tickets mainly to and from leisure destinations, has been charging for all but the smallest carry-on bags since 2012. So far, in the United States, only Allegiant and competitor Spirit are charging for cabin bags.

“I would be shocked if in three years we were still the only ones charging for carry-on bags,” Levy told me in an interview last month. “I think if you are platinum medallion on Delta you ‘ll never pay for those. But if I’m ‘Joe Blow’ who only flies twice a year, I’ll always pay.”

You probably don’t believe him. But keep in mind, Allegiant was among the first carriers to charge for checked baggage, making customers pay for bags well before American Airlines shocked passengers in 2008 with the new fee. A fee that was almost immediately copied by every major airline except Southwest.

That could happen again with carry-on bags.

“I personally believe it is inevitable that there will be a charge for carry on bags,” Levy said. “I think it will be a widely adopted fee. But we’ll see. I could be wrong. But the industry has been moving pretty consistently toward where we are and where Spirit is. I don’t think it will stop.”

Charging for carry-on bags is beneficial for airlines in a couple of ways, Levy said. The first one is obvious. The airlines make money off of something that used to be free. The second is a slightly harder to quantify. But if charging for bags means passengers bring less stuff, airplanes will presumably fly at lighter weights.  And over time, that lighter planes can bring some fuel savings.

For many passengers, the key is that an airline’s best customers will actually be rewarded by this move. First, they’ll end up getting a perk, since they almost certainly won’t have to pay to use the overhead bin. Second, the bins will have more space than they do now, since passengers will no longer have an incentive to avoid checking luggage.

What do you think? Do you agree with Levy’s prediction? And do you think airlines should charge for carry-on bags?

And check back next week for more of Levy’s thoughts on ancillary revenue products.

 

 

 

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Aviation Links: The best airline and airport stories from the past week

Here are some aviation stories I’ve enjoyed in the past week.

  • Delta’s newest 737s are arriving with slightly smaller lavatories than others in the carrier’s fleet, according to Business Insider. On an airliner, space is money. See the photo below.
  • More than 170 new LED lights at Newark Liberty International Airport are more than just lights, the New York Times reports. According to the Times, “… the light fixtures are part of a new wireless network that collects and feeds data into software that can spot long lines, recognize license plates and even identify suspicious activity, sending alerts to the appropriate staff.”
  • With United substantially reducing its Cleveland operations, Delta and Frontier are swooping in to add flights. Not many, but at least it’s something, Brett Snyder writes at Cranky Flier.
  • Brazil won’t allow Air France to fly its A380s into Sao Paulo. The reason, according to Today in the Sky and the Associated Press? The airport runway is not wide enough to accommodate the plane.
  • Starting in June, Allegiant Air will resume flight from LAX to two cities – Billings, Montana and Pasco (Tri-Cities), Washington — according to World Airline News. 
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Frontier Airlines: Is there room for a third ultra low cost airline?

Frontier Airlines belivves there's space for a third ultra low cost carrer in the United States. Do you agree?

Frontier Airlines believes there’s space for a third ultra low cost carrier in the United States. Do you agree?

I linked to it earlier today, but I think it’s worth taking another look at Brett Snyder’s interview with Daniel Shurz, Senior Vice President – Commercial for Frontier Airlines.

In one of the most interesting parts, Schurz says the U.S. market needs more ultra-low cost carriers, like Allegiant and Spirit. He says the airlines we now view as low cost — Southwest and Jetblue among them — are not really LCCs in the European model.

Into and out of the UK on intra-Europe flying, ULCCs account for over 50% of capacity. In all of Europe, it’s just over a third. Spirit and Allegiant represent slightly below 3% of US capacity. Even if you include Frontier, we want to get to the ULCC point, it’s still under 4.5% of the capacity. I think that leaves a significant opportunity for ULCCs in the US market, and I think it leaves an opportunity for differentiated strategies across the ULCCs.

Frontier has been making a play not only in its long-time home of Denver, but also in smaller airports in the Northeast, such as Trenton, N.J. Shurz tells Snyder that the region is ripe for an ultra low cost carrier.

And the world has changed. I think you’ve done work, Brett, to show how much domestic fares have risen notably on one airline, but also generally. And that’s what’s creating opportunity for ULCCs in the country. It’s that fare umbrella. The northeast never had low fares to the same extent since Southwest was never that big in the Northeast. And their failure to succeed in Philadelphia has led to fares rising. One of the things about Wilmington is that even though Baltimore fares are lower than in general in the northeast, they’re significantly higher than they were 5 to 10 years ago.

I’m not sure whether Frontier will be successful as the third ultra low cost carrier in the United States. But I do think the market needs more low-fare airlines to undercut carriers like United, American, Delta and even Jetblue and Southwest. It’ll be interesting to see what happens.

Do you think Frontier can make it? The airline likely will be sold in the next few days to Indigo Partners, a Phoenix investment firm. 

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