Spirit Airlines CEO Defends Fees; Says Bags Are 'Not Essential' For Vacations

The head of the nation's most fee-happy airline told Congress today that bringing luggage on vacation was "not essential" to travel and his airline was actually helping the poor fly by charging up to $45 to place a carry-on bag in the overhead bin.

"We are certain that Spirit's decision to unbundle services not essential to the transportation of passengers, has enabled more passengers to fly at lower cost," said Spirit Airlines CEO Ben Baldanza. "Indeed given our low fares, it has allowed many to travel who otherwise simply could not afford to do so."

VIDEO: Airlines Charge Hundreds of Extra Fees

And it's not just carry-on bags that Spirit charges for.

Want to pick your seat in advance? That will cost anywhere from $8 to $60 depending on the seat. Spirit charges extra even to reserve the much-dreaded middle seat.

Want a nice cold Coca-Cola, Sprite or even a cup of hot coffee? That will cost you an extra $2.

"Spirit's business model to provide maximum choice to passengers to purchase the specific services they want, while keeping fares as low as possible, is unique among U.S. airlines," Baldanza told Congress.

"Carrying more than one bag is not necessary for all travelers and we believe it is unfair to charge those customers for extra services they do not use -- indeed, it is the basis for Spirit's policy to unbundle services not essential to passenger transport," he added.

VIDEO: Congress investigates the fairness of the ever-increasing airline fees.
Are Airline Fees Fair?

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In the past three years, airlines have started to charge for once-free services. It is now standard practice on most airlines to pay $25 to check a piece of luggage. But Spirit went one step further in April, announcing it would start on Aug. 1 charging passengers $20 to $45 to place a carry-on bag in the overhead bin. (Bags squeezed under the seat would still be free, but that would likely eliminate any leg room on the airline which already has the least amount of space between its seats.)

Forget Cheap Airfare, Expect Fees

Spirit already takes in a higher percentage of fees than any other airline in the United States.

The airline -- which is installing seats that don't recline on its new jets -- took in 21 percent of its revenue from fees at the end of 2009, according to the Department of Transportation. That's way above the industry average of 6.5 percent. The next closest airline was AirTran at 10.7 percent, followed by Allegiant at 10 percent, Delta at 9.1 percent, and US Airways at 8.5 percent.

And that's before Spirit starts imposing the new carry-on fee.

It was the announcement of that fee that might have been the final straw. The idea of paying for carry-on bags enraged many members of the public and Congress. In response, the Department of Transportation in June announced a new set of rules and regulations that would force the airlines to be more transparent about their fees and even allow passengers to get a refund within 24 hours of buying tickets. Congress is also considering subjecting the added fees to the 7.5 percent tax already levied on airline tickets.

Rep. James Oberstar, D-Minn., who led a House hearing today on the matter, told airlines that the public will push back "and then Congress will act" if the industry does not show restraint with the fees.

"That's not a threat," the congressman said. "That's history."

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