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Is the airline industry a cartel?

Airlines are an easy target. The lines are too long, the seats are too stuffy, and the tickets are too expensive.  Hell, Sarah Palin demands the right to fly in roomy private aircrafts when traveling to conferences (which is another blog post entirely).

So why isn’t everyone completely up in arms about Spirit Airlines? Sure, there are absolutely more important things to be up in arms about-  earthquakes, wars, Tiger Woods.

That being said, flying is pretty important, too.  Have you ever taken a trip overseas–you didn’t get there by boat, did you?

Some senators are speaking out about Spirit Air in an effort to prevent other airlines moving toward ridiculous fees. Likely a more efficient way will be when consumers start voting with their wallets and choosing other airlines.

Spirit’s CEO was quoted as saying:

“…carry-on bags will help empty the plane faster and that the cost of most tickets would be reduced by $40.”

So, Spirit is going to cut tickets by $40, but charge an extra $40 to bring bags onto the plane? I prefer a flight where all my fees are in the ticket, not at the check-in counter.

And who is to say that charging for carry-on bags will really make the plane empty faster? Half of the time you are randomly assigned a seat, even when you have selected a seat online.  If you wind up in the back of the plane and you did not bring a bag, but all of the folks in the first class –who can likely afford it– have brought bags, that isn’t going to cut down on your wait time.

Regarding  fuel costs, my opinion is that they will actually spend more fuel in the long run.  When faced with a $45 charge for a small carry, why wouldn’t you just opt to pay $50 for a full suitcase?  If I am already dropping a hunk of money, I would much rather pack a full suitcase.

Spirit Air announced last year:

“By becoming more aggressive than ever on non-fuel costs, raising non-ticket revenues and continuing to grow our Latin America network while trimming lower performing flights, we will win.”

Yes, Spirit, you certainly will win by charging us “non-ticket” fees to boost your revenue. Only time will tell whether Spirit’s ticket prices drop. But going by the checked baggage  numbers, it seems the airline cartel are already following suit:

“Baggage fees have become big business for airlines: From $464 million in total revenues in 2007 to almost $2 billion, just in the first nine months of 2009”

On the bright side for the consumer, everyone had a nice laugh when Ryan Air tried to charge for using the toilet on flights.

Did you know that Southwest Airlines is currently the only airline that doesn’t charge for any bags (provided they are within the reasonable size and weight limits)?  They have also consistently won Best On Time Performance.  Thank you 1978 airline deregulation!


3 Responses

  1. Sometimes I think people forget that cartels are somehing that also exist outside the illegal drug world. Nice work!

  2. Ryan Air really are going to charge for the toilets.
    But then, everyone SAYS they would prefer to pay more and for it to be up front but Ryan AIr must believe this isn’t true.

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