Spirit Airlines: Cheap Airfare, but at What Cost?

ABOARD SPIRIT AIRLINES FLIGHT 381
Aug. 2, 2010 — -- Put your seatback and tray-table in an upright position, fasten your seatbelt and tightly hold on to your wallet.

Welcome aboard Spirit Airlines, the no-frills, fee-happy airline that just started charging passengers up to $45 one-way to put a carry-on bag in the overhead bin.

That's right: the carry-on bag is no longer free.

And don't think this is the last fee you'll see. Spirit CEO Ben Baldanza -- who actually calls the fees "a consumer benefit" -- hinted to ABC News that more surcharges will soon be on their way.

"It lets consumers decide what is important to them rather than the airline presuming what's important to them," Baldanza said. "Imagine if you went to McDonald's and the only things you could buy were the value meals."

Spirit's philosophy is to make base fares cheap as possible, and then to charge passengers for almost every conceivable extra. Want an assigned seat? That will cost you $8 to $20. (Spirit even charges to reserve a middle seat.) Thirsty? Coffee costs $2; a Coke, Sprite or water -- yes water -- is $3.

"This is the airline that's famous for hating their customers," said Gary Leff, who runs the frequent flier blog View from the Wing.

Baldanza said his airline just lets customers choose for themselves. If they don't want a service, they save money.

"Most of the angst about Spirit is from people who have never flown us," he said, "or who don't want to fly us but just want to make sure that the airline they like to fly doesn't become us."

So to get a better idea about Spirit, I bought a ticket between New York and Myrtle Beach, S.C. and prepared for the worst.

The first thing you notice when boarding are ads for timeshares, casinos and the airline's credit card plastered everywhere inside the cabin.

Then there is the legroom. Or, I should say, the lack of legroom.

I'm 5-foot-4 and my knees were touching the seat in front of me. And that was before the supersized gentleman one row up decided to lean back.

Too bad I wasn't on one of Spirit's new jets -- the seats on those don't recline at all.

Spirit Airlines Lacks Legroom

Spirit has less legroom than anybody else. By packing in passengers, the airline can sell more tickets per plane than competitors with essentially the same operating costs. Baldanza does not apologize for the snug fit, comparing his Airbus A320s to those flown by JetBlue.

"Is it tighter? Yes, it is tighter," he said. "It's like the difference between a Honda Civic and a Cadillac. Some people buy the Civic. It's a little smaller but it works for their economics."

JetBlue offers 34 to 38 inches of legroom. Spirit: 28 inches. Those extra few inches add up. JetBlue has 150 seats on its jets; Spirit has 178.

I wasn't the only one who felt cramped. Next to me was a woman named Phyllis Sodine. A few inches shorter than I, she was also forced up against the next row.

"When they say no frills, they mean no frills," Sodine said.

As for the fees, she felt those services should be included in the ticket price.

"You can't even get a glass of water. That's ridiculous," she said. "All I want is a cup of water. They nickel and dime you to death."

Note: the airline sells you water only after offering free bags of dry, salty pretzels.

But fees notwithstanding, Sodine plans to fly Spirit again. She and her husband paid a total of $181 for both of their roundtrip tickets. (That's after shelling out $39.95 for an annual membership in the airline's $9 Fare Club, giving them access to the cheapest fares.)

"That's as cheap as you can get," she said.

My roundtrip fare was almost as good a deal. It cost $110.83, including $33.48 for the ticket, $37.40 in taxes and fees and $39.95 for the club.

Teri Russiello, a 27-year-old teacher from New York, flies the airline all the time. She travels during summers off. In the fall Russiello, a University of Michigan alum, takes Spirit to attend every home football game.

"It's like the cheapest airline in the world," she said.

She has no problems with the extra fees.

"Here's the thing: you're getting a flight for $9. I don't see what the problem is," Russiello said. "The purpose of the flight is to go from point A to point B. You see $9, what do you think you're getting? Salmon and filet mignon?"

Russiello is just the type of flier Spirit wants. Baldanza said his airline's low fares make travel affordable for first-time fliers and let other leisure travelers fly more frequently.

"We're not out there trying to steal traffic from American, Southwest and Delta," he said. "We lower the fare. That lower fare makes more people travel or makes the same people travel more often, and we carry that growth."

Spirit Airlines: Cheap Airfare, High Fees

Spirit is still relatively tiny. It carried 6.1 million passengers last year, according to the Department of Transportation. Delta transported ten times as many passengers and 701.5 million people flew all U.S. airlines combined. Baldanza said that more than 500,000 of his customers paid less than $10 each way for their tickets before taxes and fees.

The formula of low fares and high fees appears to be working. Spirit has been profitable the last six quarters, making $24.1 million from January through March, according to the DOT. The privately-owned airline makes money by keeping wages low, charging high fees, relying on brash online ads that go viral and flying young planes which are fuel efficient and require less maintenance.

"Spirit Airlines is the airline that everybody loves to bash, but they do have the lowest fares on the routes they fly, if you book on their own website," said George Hobica, president of airfarewatchdog.com.

Spirit doesn't always have the lowest fares, Hobica said. But most often they do. And that -- not the number of added fees -- is what matters to fliers.

"They vote with their wallets. We see that time and time again," Hobica said. "Airlines raise fares and people stop flying."

It is debatable if consumers understand all the fees they are subject to before booking a ticket. Congress recently held a hearing about proposals to make the fees more transparent and to subject them to the 7.5 percent tax levied on airline tickets.

Baldanza insists that his customers understand. But Anne Banas, executive editor of the website SmarterTravel is doubtful. She said the fees quickly erode Spirit's claims that it has the lowest fares.

Spirit Airlines' Extra Fees

"The reality, aside from those few passengers who are willing to pack exceptionally light, is that Spirit's fares are often not that great when you add everything up," Banas said. "Plus, you have to read the fine print in the advertising. For example, some of Spirit's cheapest advertised fares don't include the cost of fuel, which can add on anywhere between about $11 and $76, depending on mileage flown."

Banas compared prices for flights from Boston to Cancun with one checked bag and one carry-on. Spirit had the lowest advertised fare but the fees quickly added up. In the end, Spirit was $435.17, JetBlue was $426.10 and Delta was $309.10.

"It just goes to show that it's in the consumer's best interest to do their own complete price comparison before plunking down their credit card," Banas said.

Baldanza defends the carry-on bag fee, saying that it will help reduce delays.

Bags squeezed under your seat are still free, but it now costs $30 to place one in the overhead bin. ($9 Fare Club members only pay $20; those who go through security without first paying the carry-on fee will be whacked with a $45 surcharge.) In comparison, it costs $25 -- $19 for club members -- to check a bag.

"The reason that people are so shocked about the carry-on bag right now is that they just don't get it," Baldanza said. "There will be fewer delays and the boarding process will be smoother. They don't understand all the benefits of it. They are just outraged that I used to get this for free and now have to pay for it."

Baldanza asked me how my flight was. I told him it was cramped but bearable. And how about delays? Well, here's what my flight attendant coming home announced when we landed: "Welcome to New York. Local time is 7:47. We're about 30 minutes early. Please tell a few people, because you know if it was the other way around you would."