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Spirit Airlines Champions Extra Fees

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THAT'S THE SPIRIT!
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Two years ago, Ryanair (RYAAY) CEO Michael O’Leary announced that he’d been toying around with the idea of selling standing room only tickets for four pounds. The plan was to remove the back ten rows -- and possibly two bathrooms -- from some planes and replace them with an elaborately designed vertical seat. Unfortunately, Boeing (BA) vetoed the idea.

O’Leary is something of an innovator in cheapening airfare by refusing to think of customers as human beings. Some of his other bright ideas include pay toilets and in-flight pornography. Here are a few more.

Stateside, it looks like Florida’s discount Spirit Airlines (SAVE) is attempting to fill a similar role. Like Ryanair, Spirit charges extra for pretty much everything, but, while Ryanair is a champion of cheap flights, Spirit sees itself more as a “poster child for extra fees.”

According to a recent article in USA Today, extra charges include $1 to $50 each way for a seat assignment, $5 to print a boarding pass at the gate, $28 to check a bag and $30 for a bag that won’t fit under your seat. Leg room also costs extra: The company flies with 28 more seats to an Airbus A320 than JetBlue (JBLU), and less cramped seats start at a $12 premium.

CEO Ben Baldanza has claimed to be proud of all of his airlines fees, and views them as an issue of consumer choice. In his view, customers only pay for services they use, and can save a lot of money by sacrificing a few unnecessary conveniences.

Still, $5 to print out a boarding pass seems a little steep.

Baldanza has made headlines recently for his company’s livid reaction to new airline regulations. In response to a government requirement that tax be included in the sticker price of a ticket, Spirit’s website now has a giant warning label saying that the government “is forcing airlines to hide taxes in their fares.” The company has also added a $4 “Department of Transportation Unintended Consequences” fee. Brilliant.

Still, it appears that Spirit is doing something right. While, United Continental (UAL) was posting a $138 million loss in the fourth quarter and American Airlines was filing for bankruptcy, Spirit expanded service
POSITION:  No positions in stocks mentioned.

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