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Spirit Airlines is going upscale, offering fares with extra perks

July 30, 2024

By David Koenig | The Associated Press

Spirit Airlines is moving farther away from its history as a fee-happy budget airline and will start selling tickets that include some of its most popular extras in bundles.

The Florida-based airline said Tuesday the top ticket will be a “Go Big” package that includes priority check-in, a roomier seat, snacks and drinks, a checked bag, a carry-on bag and free WiFi.

Also see: Southwest Airlines to start assigning seats, breaking 50-year tradition

CEO Ted Christie said the changes are “taking low-fare travel to new heights.” They also indicate the deep trouble with Spirit’s longtime business model.

The airline with bright yellow planes hasn’t made a full-year profit since 2019 — it has lost nearly $2.4 billion since — leading industry analysts to mull whether a bankruptcy filing could be in Spirit’s future.

Full-service carriers Delta and United account for an outsized share of the U.S. airline industry’s profit, and they are doing it by focusing on premium flyers while also selling bare-bones “basic economy” fares that compete with Spirit, Frontier and Allegiant for travelers on tight budgets.

The budget carriers have suffered more than the giants from a glut of flights within the United States, which has led to price-cutting. Delta, United and American have a booming business right now in long-haul international flights that can offset weak pricing power at home. Spirit does not.

The budget carriers are trying to adapt. Frontier Airlines — which, like Spirit, has been losing money for more than four years — matched a pandemic-era move by the bigger airlines and dropped flight-change and cancellation fees for many customers this spring. Spirit quickly copied the move.

Spirit has other problems, including a looming debt payment of more than $1 billion and a shortage of planes because some of its jets are grounded for inspections and repairs of Pratt & Whitney engines. Spirit expects compensation of up to $200 million from the engine maker, but its condition is dire enough that Spirit announced in April it would furlough some pilots and delay delivery of new jets.

TD Cowen analysts downgraded Spirit shares to “Sell” this month and said if Spirit can’t renegotiate its debt or return leased planes to lessors, a pre-packaged bankruptcy filing is possible.

Spirit’s announcement Tuesday targets travelers who might not consider a budget airline.

It said customers will be able to book any of the four new ticket bundles starting Aug. 16. That means they won’t be available during the height of summer-vacation travel but will be in use over the busy Labor Day holiday.

“We listened to our guests and are excited to deliver what they want: choices for an elevated experience that are affordable and provide unparalleled value,” Christie said in a statement issued by Spirit.

Spirit shares gained 5% in afternoon trading but are down more than 80% this year.

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Orange County Register

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Spirit Airlines is going upscale, offering fares with extra perks

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