Florida-based Spirit Airlines took a heap of criticism in August 2010 when it announced that it was going to be the first _ and so far only _ airline to charge passengers up to $45 in extra fees to pack carry-on luggage in its planes' overhead compartments.
Two federal lawmakers even threatened to impose a tax on all airline revenue generated by such fees, a penalty that has yet to be adopted.
But an industry consultant on airline revenue ideas has declared Spirit's carry-on baggage fee a major success.
In the 12-month period after Spirit launched the fee, the airline flew 24.5 percent more passengers compared with the same period in 2009, according to a study by Jay Sorensen, president of IdeaWorks, a Wisconsin airline consultant.
Meanwhile, the airline reported a 10 percent to 12 percent profit margin in the nine months after the fee was added, a much higher margin than most of its larger competitors, according to the report.
"More than a year later, passenger traffic and revenue results have proven the skeptics wrong," Sorensen said about the carry-on fee. A spokeswoman for Spirit declined to comment on the report.
The carry-on fee also has created an incentive for passengers to carry fewer bags into the cabin, thus speeding up the boarding process, Sorensen said.
"Flight attendants report passenger boarding and unloading occurs far more quickly," he said in the report. "This preserves Spirit's desire to keep ground time at a minimum."
ONBOARD SALES LIKELY TO INCREASE
Besides charging passengers to check luggage, the nation's airlines have collected billions of dollars in extra revenue by turning their cabins into flying department stores.
And experts foresee big growth in such sales in the coming years.
The nation's top airlines take in an average of nearly 12 percent of their revenue from onboard sales of food, drinks, online entertainment and blankets, among other items and services, according to industry studies.
In the future, airlines are likely to expand such offerings to include "destination-based attractions," such as car rentals and hotel reservations and more entertainment options, according to a study released last week by Toronto-based GuestLogix, a provider of onboard sales technology to the world's airlines.
The report predicts that most of the sales will be made from the entertainment system installed in the seat backs instead of from the carts that flight attendants roll down the cabin aisle.
"I think airlines are thinking about the passenger and trying to get them what they want," said Chris Gardner, a managing director at GuestLogix.
The report found that revenue from so-called comfort items such as headphones, blankets, pillows and in-flight entertainment jumped 70 percent in the first half of 2010 compared with the same period in 2009.
Prepared meals and other fresh food generated nearly three times as much as revenue as pre-packaged snacks in the first six months of 2010 compared with the same period in 2009.
Finally, the report confirmed what many in the airline industry had long assumed: The longer the flight, the more the airline sells in onboard products and services, particularly alcoholic drinks.
On flights less than 500 miles, average sales of alcoholic drinks total about $22, compared with $71 on flights more than 1,500 miles, the report found.
"The longer the flight, passengers are less likely to wait until they are on the ground to buy food or have a drink," the report said.