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Allegiant Air adds carry-on fee

By Marnie Hunter, CNN
updated 4:00 PM EDT, Tue April 3, 2012
Allegiant Air will charge between $10 and $30 for carry-on bags that don't fit under seats.
Allegiant Air will charge between $10 and $30 for carry-on bags that don't fit under seats.
STORY HIGHLIGHTS
  • Allegiant Air is the second U.S. airline to charge for carry-on bags
  • The airline will charge between $10 and $30 for bags that don't fit under seats
  • Spirit Airlines also charges for carry-ons
  • Industry insiders say other carriers may follow suit

(CNN) -- Keep your carry-ons small on Allegiant Air flights. Starting Wednesday, if your bag doesn't fit under the seat, you're going to pay for it.

The airline plans to charge between $10 and $30 for carry-on luggage stored in overhead bins on flights booked after the fee is implemented overnight. Those prices apply for fees paid during the reservation process and vary by route. Previous bookings will not be affected.

Carry-on fees on most routes will be less than $15, the airline said. Passengers who pay fees at the airport during check-in will be charged $35. Personal items that fit under seats are still free.

Allegiant's CEO said the airline's fares are still lower than competitors'.

"When it is all said and done and you get to the bottom line and hit the 'pay' button, and you can shop our fares against anybody else. We are typically 50% lower," CEO Maurice Gallagher said.

Rising fuel prices are to blame for the hefty fee, says one industry expert.

"Allegiant has one of the oldest and most fuel-inefficient fleets in the airline industry," said Vaughn Cordle, an analyst with AirlineForecasts.

Allegiant joins Spirit Airlines as the second U.S. carrier to implement fees for carry-on luggage. In April 2010, Spirit announced carry-on charges from $20 to $45 for bags stored in the overhead bins.

Spirit declined to comment Tuesday on revenue generated by its carry-on fee, but the policy has been "very well received by our customers and our crew members," spokeswoman Misty Pinson said via e-mail. "It has resulted in a much speedier, smoother and safer boarding and deplaning."

Overall, U.S. airlines racked up $2.6 billion in baggage fee revenue in 2011, according to the Bureau of Transportation Statistics.

An ultra-low-fare model gives carriers such as Allegiant and Spirit more flexibility in unbundling the costs of air travel, Cordle said, but other airlines will be watching the carry-on fee closely.

"They're all trying to move that route, but it's a little harder for the higher-cost network airlines to tack on higher fees associated with getting passengers from A to B," Cordle said.

But "if they think they can get away with it, they're going to do it."

George Hobica, founder of Airfarewatchdog.com, agrees.

"It's a distinct possibility. Monkey see, monkey do. Clearly, Spirit Airlines didn't go bust for doing so, and now Allegiant is dipping its toes into the water," Hobica said via e-mail.

"Since there's no regulation banning such a fee, and especially because overhead bin space has not kept up with demand from passengers trying to avoid fees (leading to countless fights and unpleasantness for both passengers and crew) I don't see why at least one legacy carrier wouldn't try it."

US Airways, American Airlines and Southwest Airlines said Tuesday that they have no plans to charge for carry-ons. Delta said it doesn't comment on future fares or fees.

CNN's Aaron Cooper contributed to this report.

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