Here's the school of thought on this:
Used to be that when you bought your ticket you were buying two things - a seat and space for you bags. (Yes I know - other things weren't charged either - we are just looking at this from it's most basic point right now)
What they are doing is now only selling the seat - so you only pay for the baggage if you are going to use it. By raising everyone's fare, you make everyone pay for what only some use. On the other hand, this method only makes those that actually use it, pay for it.
The other part is this:
Spirit and Northwest both serve Detroit. So let's say you are flying to Detroit. Northwest is much more dependent on these fees than Spirit. So Spirit could raise the fares and do away with the fees. Northwest does not have that option. But the problem is that the smaller airlines like Spirit and AirTran and JetBlue have a what is called fare elasticity. What this means is that they can go ahead and raise the fares, but there comes a point at which the fares get close to what Northwest is charging. NW's fare will be more, but it's still close enough that people will just go ahead and book NW instead of Spirit. NW just has the better perception between the two as a larger airline, etc. So in this case Spirit stands to loose customers.
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