Using the Overhead Compartment Is Now Going to Cost You

You'd better sit down for this next story, because you're honestly not going to believe it. The next time you fly Frontier Airlines, they're going to charge you extra to put your bag in the overhead bin.

Yes, seriously.

At Frontier Airlines, it's not just the planes that are sky-high. Source: Frontier.

All the news that won't fit under the seat in front of you
You've probably noticed by now all the tricks that Delta Air Lines (NYSE: DAL  ) , Southwest (NYSE: LUV  ) , and United Continental (NYSE: UAL  ) have been coming up with lately to cut costs and raise revenue, right? Some have begun charging little (and not so little) fees on services that used to be included in the cost of a ticket. Others have pared planes from their fleets, aiming for fewer unfilled seats on the planes that remain. Nearly everyone has raised the price of a standard ticket.

Well, earlier this week, Denver-based Frontier announced a new twist in the game of turn customers upside down and shake out their pockets. In addition to the $1.99 fees Frontier began charging passengers in July for a bottle of water or a Coke, the airline is now adding fees for using the overhead bins to stow your carry-on bags. As the airline explains, passengers can still carry on a "personal item" -- a carry-on small enough to cram under the seat in front of you -- for free. Anything big enough that it needs an overhead bin to store it, however, will cost extra.

Figuring out exactly how much extra Frontier will ding you for your carry-on, however, isn't exactly easy. On its website, Frontier describes at least seven different options for how the fees might be levied, depending on such variables as whether you're a member of its "Discount Den" loyalty service, whether you check in online, by phone, or in person at the airport.

But the upshot is this: Try as you might to minimize the bite -- Frontier's probably going to ding you for at least $20 a bag, and maybe as much as $50. Checked bags, in contrast, cost Frontier fliers $15-$25. And by the way, these fees kick in on Monday.

And that's the good news.

I'm almost afraid to ask, but what's the bad news?
Frontier's decision to charge extra for basically bringing anything bigger than a purse on board their planes is the news grabbing headlines this week. But the company's other newly instituted fee is potentially even more annoying. As the airline advises, from now on, getting a specific seat assignment for your flight will cost $3 for online check-in, and $8 for checking in at the airport.

Don't want to pay the fee? You can roll the dice, show up for your flight and let the attendants put you wherever they can find space -- whether that's 12 rows away from the rest of your family, or only three.

In exchange for the new fees, Frontier says it will lower the "base fare" on its flights by 12%. So it's conceivable you can still find a way to pay less money under Frontier's new rate plan -- so long as you you've already got a change of clothes stashed wherever you're going. Perhaps this is what Frontier CEO David Siegel meant when boasting that the new policy is "really about customer choice and giving customers the opportunity that if they change their behavior, they're going to save a lot of money."

So you see, if you don't end up saving money from Frontier charging you all these new fees, it's really your own fault...

It's all about you
Again, seriously. All these new fees that Frontier has begun charging probably are your fault -- if by "you" we mean bargain-hunting flyers in general.

Think about it from Frontier's perspective. Last quarter, Delta grew its revenues only 5%, while "your bags fly free" Southwest Airlines grew 2%, and United Continental's business actually shrank. But over at Spirit Airlines (NASDAQ: SAVE  ) , the nickel-and-dime business model is still working wonders. Sales shot up 26% year over year.

Seeing the stark difference in fortunes among the two business models, it's no wonder Frontier concluded that the smart thing to do is reduce upfront prices (that show up in web searches for cheap fares), and just up the difference in a la carte fees.

Turns out, all those nickels and dimes really do add up.

Tired of paying for airline "fuel surcharges"? Here's how to make your money back
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's worst nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2938262, ~/Articles/ArticleHandler.aspx, 9/2/2015 7:52:36 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rich Smith

As a defense writer for The Motley Fool, I focus on defense and aerospace stocks. My job? Every day of the week, I'm monitoring the news, figuring out the winners and losers, and tracking down the promising companies for you to invest in. Follow me on Twitter or Facebook for the most important developments in defense & aerospace, and other great stories.

Today's Market

updated Moments ago Sponsored by:
DOW 16,351.38 293.03 1.82%
S&P 500 1,948.86 35.01 1.83%
NASD 4,749.98 113.87 2.46%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/2/2015 4:01 PM
DAL $45.99 Up +2.22 +5.07%
Delta Air Lines, I… CAPS Rating: ***
LUV $37.72 Up +1.36 +3.74%
Southwest Airlines CAPS Rating: ****
SAVE $51.78 Up +1.37 +2.72%
Spirit Airlines CAPS Rating: ***
UAL $57.29 Up +0.16 +0.28%
United Continental… CAPS Rating: **