More Bag Fees

Jacob Grier left a good comment on my post earlier this week about airline bag fees:

I have nothing against baggage fees. The one thing that annoys me is the incentive they create to carry-on instead of check baggage. I usually travel with one large piece of luggage and one laptop bag. I pay the fee to check the big bag, then carry on the laptop bag with the expectation that I can remove the books when I sit, stow the bag in the overhead compartment, and have a relaxing flight with legroom.

This seemed to work out more frequently before bag fees. Now everyone else has an incentive not to check bags and there's no way they can fit their luggage under the seats. So who gets stuck without bin space and a bag at his feet? Me, the guy who paid the extra $25 to get luggage off my hands, while the other people get free overhead space and all the legroom.

If bin space we're also priced somehow, I would probably support that. Of course everyone else would protest about the airlines gouging us once again.

This is a great point. You get inefficient results when you price part of a market. (One good reason to prefer carbon taxes over an exception-riddled cap-and-trade system.)

Enter Spirit Air:

WSJ | Scott McCartney | With Low Fares, Furor Over Carry-On Fees Wanes:
Despite Grumbling, Passengers Pay the $30-$45 Surcharge; Spirit Airlines Cites Revenue Boost and Speedier Operations

At Spirit Airlines' Fort Lauderdale hub, boarding is quick and there are fewer delays from gate-checking bags. Overhead-bin space is plentiful—even for the last-minute passengers on full flights.

And yet, many fliers are furious because the swift boarding and ample bin space come at a hefty price: as much as $45 per carry-on bag.

Nevertheless, they're adjusting, often saying they factor the fees into buying decisions and still find Spirit cheaper than other carriers. For its part, Spirit has boosted its revenue, sped up its operations and cleaned out its overhead bins, since checked bags are $5 cheaper than carry-ons.

I wish airline would start by actually enforcing their rules about size of carry-ons. You know all those wire-frame boxes with the signs on them saying "Your bag must fit in this space to be a carry-on"? I've never seen one of those actually being used.

I might also like to look into partitioning over-head bins, so that there is one cubby associated with each seat.  That would lower over-all resource usage efficiency, but would increase equity.

Also from that Journal article:

'Everyone is trying to nickel-and-dime in this economy. It's unfortunate. It's disappointing. But it just reflects companies trying to take advantage of consumers,' said Frank Bernal, a first-time Spirit flier from New Jersey who paid to carry on his bag for a trip to Colombia. He saw the charge when he booked his ticket.

'The fare was so much lower, it was enough for me to just pay the fee,' he said."

(1) This guy straight up does not understand economics or think economically. He made an informed decision about the costs and benefits of buying this service, acting on his own free will and intellect. How can this guy think he's been taken advantage of?   He obviously derived consumer surplus from this transaction. But he wants to bitch anyway.

(2) Why do newspapers persist in this sort of reporting? Who gives a shit if Frank from New Jersey feels slighted? Frank from New Jersey is an irrational, uniformed, sample-of-one.  I know, I know, it makes it more human.  But it also adds nothing to my understanding.  I would think that some newspaper out there would differentiate themselves by skipping all the man-on-the-street quotes.