Fee-Friendly Skies

Tuesday, January 23, 2007

Spirit Airlines made two important, interrelated announcements this month. For one, the airline slashed many of its fares to the bone-some of the flights to its Ft. Lauderdale hub were 5¢ each way, or about $20 round trip after taxes and fees. The flip side is that its fees are going up. For example, Spirit now will only allow one free checked bag-the second one costs $10 each way, the third another $100 each way.

Spirit is hoping to induce “sticker swoon” - the opposite of sticker shock-and then inflate the advertised price with the extra fees.

In this sense, the model Spirit is following is that of Ryanair, the low-cost Irish airline that has revolutionized air travel in the U.K. and Europe. Along the same lines, a brand new airline called SkyBus has announced that it intends to consciously imitate the Ryanair model in the US. This could be the shape of things to come, so what could this mean for those of us looking to travel on the cheap?

This is Ryanair’s business model in a nutshell: cheap fares, no service. You have to walk down the tarmac to the plane, a sandwich is $10, the company’s customer service line is nearly impenetrable. Passengers also must hack though a dense thicket of fees in order to get the truly cheap fare. There is a “Passenger Service Charge,” a “Wheelchair charge,” an “Insurance charge,” and a fee for each of your bags. The seats do not recline.

But the bargain fares are a revelation - it’s possible to fly round trip from London to Rome (or many other European cities) for the equivalent of $50 dollars.

How can Ryanair charge so little? For one, Ryanair receives subsidies from some airports, and these airports are sometimes are many miles from the city you want to go to. (Local transportation then becomes another hidden cost to bear in mind.) Also, on-plane advertising is much more intrusive than U.S. travelers are used to. Ads on overhead bins, ads on the back of the seat in front of you - the experience is more akin to sci fi movies “Blade Runner” or “Minority Report” than to current low-cost U.S. airlines. Ryanair even uses the outside of its planes to criticize its competitors:

Ryanair’s pugnacious executive Michael O’Leary frequently accuses its rivals or the government of ”scalping” or ”pimping” consumers for extra charges, and seems committed to rock-bottom, no-frills travel. However, when the focus is strictly on the bottom line, service is sure to deteriorate. Ryanair, alongside its growing popularity, has also been called ”the world’s least favourite airline” in the wake of revelations that it charged a man with cerebral palsy an extra £18 for a wheelchair, and that it makes its flight attendants pay for their own uniforms.

For the low-maintenance traveler who is well-informed and can tune out intrusive ads, the Ryanair model is a bargain. It will be interesting to see how this works in the U.S.

What is your Fee of the Week? E-mail us us at the Hotline.