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Spirit Airlines CEO Ben Baldanza on the reasons behind the airline’s high fee for checking a bag at the gate and how passengers pay lower fees.
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-- leave it from the folks at spirit to lead you white as it goes when you look at airline ticket.
All 100 dollar -- protecting -- single bag at the -- But Spirit Airlines CEO -- -- that does says Smart flyers are ready to either pay that charge or just go commando.
Then.
Hundred but.
-- -- -- -- Hi Danielle thank party again always got to remember -- we don't want anyone to pay -- hundred dollar -- this hundred dollar fee to the idea allies.
It only applies to people who wait until the gates to pay for their bags and the whole reason we charge for carry on -- that we started back in 2010.
Was to make the gate process much faster and to stop these very costly delays.
And since we put the program in place spirit -- board really quickly -- -- playing really quickly customers like that aspect it.
But let's -- And you're you're passengers know that -- that.
If it did eight this is it say they can't -- carry on.
Right I mean George is our is everyone charges that or -- their way to get around matter what.
Well there's lots of ways to not pay it and again we don't want anybody to pay.
You can buy here you can pay for your back online you can do -- kiosk you can do it from a ticket counter.
And how much -- -- when you pay it on line how much is it.
If you're a nine dollar fare club member it's just forty dollars otherwise it's thirty dollars and -- you -- right at that gate it's a hundred dollars.
That's exactly -- of those sort of surprise -- -- -- be honest with me now those you'll find out when they're online.
There's a hundred dollar charge for that -- today will then throw the bad down.
And we're just strip now.
No we don't think so because we're being very forward about this and our customers are Smart.
They understand that what we've done -- spirit is we've found ways to make things self service.
And pass those savings along to them in terms of low fare.
What do you think -- yeah but then what do you think the ones who don't know.
Do.
Well the ones who don't know will be told that the airport before they goes -- security.
Pay for that bag right now because it's going to be more expensive that the -- and and then leave you'll never get them back then they'll leave well.
Here's why don't think that's true deal because when we look at the DOT stats.
The total price that customers pay.
Their fair plus their fees is an almost all cases less than the price they would pay on another airline that may bundle their product.
People -- because they save money and that's why we think they'll keep governor backed.
How much -- -- -- on -- -- I -- -- to be honest with me or is honest as an airline CEO candy how much you may get on these days.
Well and in profit I can't exactly say but it's about 40% of our revenues so it's a significant piece of the -- -- -- yeah James sees.
That you are are charging folks.
Unannounced and down when they get -- to -- -- you make it a pretty bad you know.
-- in the -- you said two things that I think are wrong in your real Smart guy.
They're not gouging fees because they go on top of an eighty dollar fair understood our average what -- just said they make up 40% of your revenue.
40% diesel gouging -- make up 40% of your revenue but the fares are are very very low in the second thing you said unknown to them.
-- -- -- -- -- -- -- And we tell customers everything they know in advance and -- that make the decision.
Why do you -- -- subsidize.
Another customer who doesn't plan as well as you.
Oh that's a very good point all right I change my mind about everything I just sense but it also says do you think that it's waive its fees and I know the industry dates of the right.
One point six billion dollars -- a very -- these.
For everything from the luggage decides the luggage what is -- on a row when it.
-- do you have a Diet Coke vs a Coke whether you're talking to the stewardess or you're just a -- at the pilot.
Bottom line you can always sees that it's getting India real pain and asked for fliers and a lot of them are just gonna -- and say now now now now now.
We'll look at -- you can go to a restaurant that has that's an all you can eat buffets.
And includes the -- that includes a salad and everything in that may be what you -- to do actually sort of you don't say.
They're -- there are other people and they say I only wanna pay for what I actually use.
And at spirit we take a very very low fare again just eighty dollars in the second quarter.
A very very low -- and say you only pay for the extra use and you save money and the things you don't.
And we find that the people who fly spirit like that approach because it puts pricing power in their hands.
They decide how willing to -- a little less and I'll save -- Yeah but I think there's also a hidden message in the name of the airlines spirit because of the rate you're going people won't.
Be wearing clothes and and they'll -- just down to their body in this spirit sitting on a plane which could be a whole new.
You know money normally get real why would somebody think the clothes off their body will we don't charge for close on the body yet back yet talking about -- -- -- traded down I'm giving you time I'm not one.
But then take you seriously very much -- and we appreciate it.
-- it's always good talking with you thank you don't.
