Spirit Airlines has abandoned their business model focusing on the cheapest possible fares and making money on fees. They even offer a first class bundle now, “Go Big” that includes their ‘big front seat’ along a carry on, checked bag, priority boarding, and free wifi plus free snacks and drinks.
But they seem to have forgotten who they are. This isn’t a first class airline, it’s cheap transportation. They make travel affordable. They are a leisure airline for once a year flyers. That’s what gave them (and look-alike Frontier Airlines) the highest margins in the industry before the pandemic.
Since then their problems are:
- People have looked to spend more on experiences. It’s unclear whether this will last through an economic downturn.
- People have wanted to travel to Europe, and Spirit doesn’t fly there.
- They now have higher costs. They pay for fuel and planes like everyone else does. Labor costs have risen.
Their problem isn’t that they charged too many fees.
Now, as a baseline, I was looking at first class prices from the New York area to Austin. Here’s what Delta, American and United are charging:
Spirit is selling their first class seat for more money than American Airlines wants for theirs. Spirit is selling a coach seat with a blocked middle next to it for more money than Delta wants for first class later that day.
I started looking at other Spirit routes and different dates. The next one I pulled up was Austin – Las Vegas, where they want more for a first class seat than American Airlines does – and about five times their own lowest fare.
They seem to have the idea of bundles confused. Consumer bundles succeed by offering more products at a lower price than all of them would cost separately.
- Consumers get more than they otherwise would
- And spend more than they otherwise would
Think about your cable television or streaming service. Each new channel is very high margin. It costs almost nothing to add one more household to a given channel. All that revenue is gravy. So you bundle channels and get more total revenue.
Maybe someone values news stations at $10 and sports at $2 (or vice versa). If you sold each one for $9, your total revenue would be $9. They’d buy news and not sports. But if you sell a bundle for $11, you get $11 and they take both news and sports.
Bundles don’t make sense when the cost of the bundle is too high! If you sell the “news and sports bundle” for $20, you have no takers.
United Airlines CEO Scott Kirby suggests Spirit Airlines is doomed with a -30% margin. The airline seems to be making hail mary passes, thinking that they can charge more than competitors for their new first class? They don’t have ovens in their planes and aren’t including hot meals. They don’t have airport lounges. Their first class seats are pre-reclined. And their miles are worth arguably even less than Delta’s.
Spirit Airlines only even has these ‘first class’ seats on planes because they didn’t want to spend the money to rip them out when they first became an ultra-low cost airline.
Ultimately, Spirit Airlines isn’t going to be more successful by offering a less desirable product than American Airlines at a higher price.
The Spirit Airlines Big Front Seat used to be the best deal in travel at a modest upcharge. The idea that it’s worth more than double or even five times the base price is insane.
Spirit needs to stop flying and then do a fire sale. The airplanes and slots are worth more than the company alive.
I’ll never fly Spirit but I like the Iowa Hawkeye Livery! 🙂
Spot on. As a Gold, they’ve destroyed their frequent flyer program. For one, you can only redeem miles for the base fare, then have to pay cash for the bundle. So it’s still a crazy high charge to fly in Go Big even with “free flight” miles.
Gold gets free bags and priority whatever anyway. You have to now pay for all of that again in order to get the Big Front Seat – no more add it on just the seat since you already get the rest of it free.
The pricing even all that notwithstanding is insane. I’m looking at a business trip across the country now. Coach on AA/DL is $250 each way. Spirit is $75 for the lowest fare with restrictions. As a Gold, I could buy that and get the bags free. And it’s a non-stop flight at a good time. Because of flight distance, I could pay an upcharge for a “premium econ” seat. The problem is that with the way NK has it bundled, they want $340 for the “premium econ” seat with blocked middle and near $500 for the Big Front Seat. So instead of getting $75 plus maybe $200 for a BFS upcharge, they’re getting $0 and American is getting $250+$70.
Spirit’s trying to run with United, the premium big boy in the U.S.
In your NYC comparison above, you say the following: Spirit is selling their first class seat for more money than American Airlines wants for theirs. Spirit is selling a coach seat with a blocked middle next to it for more money than Delta wants for first class later that day.
Actually, no. The spirit example you cite is for a New York /EWR TO Austin flight. The screenshot you show, and that you attempt to make comparisons to, is for Austin TO New York. These are not apples to apples comparisons as you attempt to make. Either show what Spirit is asking for for AUS to NYC, or show what the other airlines are asking for for NYC to AUS. Otherwise, your comparisons are meaningless.
What’s more relevant here, as others have pointed out, is that in doing this bundling, Spirit is forcing people to pay more than they may want. While the bundling could be fine, they should also maybe still offer the possibility to do a la carte pricing. For example, I’v eflown Spirit several times where all I needed was the base fare, no carry on/ checked bags, and I’ve paid the surcharge for the Big Front SEat. Perfect. Now you cant do that, the only way to get the Big Front Seat is to pay for the full bundle, which is way more. Spirit has lost me there. Which is a pity.
AUS-EWR is not the same as AUS-JFK. You know better than that, Gary. Clearly Spirit is competing against United on that route as shown in the picture and Spirit is beating the UA price by about 10%.
Noticed you did not show or state what the AA Vegas flight price was, so must not be a significant difference.
I’ve flown all the airlines you listed and have found the experience to be quite similar. Actually, the flight crew on Spirit was much more professional and provided a better service.
The ULCC business model is based upon selling money losing fares in most cases but making making significant margin on ancillary fees. Either by choice or force (lack of awareness by passengers on what is or isn’t included in the ticket price). Add to that keeping costs down and packing every plane to the gills. Clearly for a number of reasons that business model isn’t generating profits and may never be able to do so.
Naturally both Spirit and Frontier (Sun Country and Allegiant have a similar business model but with some differences, and are far smaller) are trying to go up market. But first and foremost will those changes generate profits and will the airline’s customer base be open to pay for these amenities? Most people fly Spirit or Frontier because of dirt cheap fares not because they can get a middle seat blocked or free snacks.
Spirit Airlines needs to bring in higher profits to stay alive. There will be some people who like to pay for everything individually and some people that like the bundled fare, the others don’t really give a f**k. That’s life.
If Spirit would install seats like Americans business class on a 787 in the 2x3x2 section with recliners and foot rests, that would be an upgrade. Spirits very flat, no recline, bigger front seats are so so. I’m willing to spend $30 more for those seats, but that’s about it.
The big downside on NK, at least for anyone who wants to get there on time, is the lack of operational reliability and IRROPS alternatives.
Must be a slow week for Gary, the routes are not even the same. Granted I wouldn’t use Spirit for long flights because the big front seats kill my back after 2 hours. (Make seats recline again Please!!) I will say your article is very disingenuous, you should correct the routes and do apples to apples. Since it’s about Spirit the comparison should be the 26th one way from KAUS to KEWR. KJFK is a different airport so fees and cost to the airlines are different, I know you travel enough to know this. Also the seats, don’t cherry pick old pics Gary.
I flew Spirit for the first time a couple of weeks ago and it was a good experience. But I would not pick them for multiple reasons. First I don’t think you save any money on them, and probably pay more than legacy carriers. 2nd, they do not have interline agreements. So when it comes to significant delays or cancellations, you have to wait until Spirit gets you there instead of being protected on another airline. That at best is hours delay, if not days. So no thank you.
But Financially, it you figured this out, then I wonder why they have not figured this out? Do t they have any any analysts looking at this? When I worked for the majors we had analysts looking at every aspect of how we performed financially ect. But then again, if they are actually selling the package deal, why bother?
Maybe it includes the first punch?
Or if you’ve been banned on all the airlines, Spirit is like that motel off Route 143, your crumpled cash money is still good ,..
You can still Ala-cart the by choosing basic with no bags and then the big front seat, but it’s not that much cheaper than getting the big front seat package. Prices are correct to charge 500-600 for first-class. You get food, beverages, bags, boarding priority, and a large airplane seat upfront, so yes, First Class. They are flying more nonstop routes and hoping business people will fly them because of their point-to-point system. I don’t like the times they fly, so it’s usually a no-go for me.
Rumor has it (according to some good sources) they are going to introduce some sort of priority reaccom for elites including OA tickets.
I hope they survive and do great so kettle flyers keep flying them and stay off real airlines. I hate once a year flyers, their emotional support animals and their obnoxious talking.
@John said: “You can still Ala-cart the by choosing basic with no bags and then the big front seat”
John, I tried to purchase a Big Front Seat à la carte on my usual route yesterday but they were only available as part of the overpriced bundle. Were you actually able to select them via Basic as you described. It didn’t work for me.
@ Gary — This post is baloney. I checked my favorite Spirit route and the pricing is the same with the bundle as previously without the bundle. Nothing changed.
@Gene – not baloney, though there may be routes where this isn’t the case, cranky flier had similar findings today btw
@ Gary — Wow, it isnt baloney. The pricing changed from 3 days ago when I checked on the new bundle pricing.This pricing can’t possibly stick. EWR-ATL same price as United First! Only someone clueless would pay the same for NK.
Gary, this is misleading. You compared AUS to EWR/JFK for the big 3 and you used the return route EWR AUS for Spirit. You know very well that fares vary flight to flight based on loads and demand. You are comparing apples to lightbulbs.
Was this unfair comparison accidental or intentional?
That F pricing is insane. What are they thinking? (Facepalm)
As someone who always pays full price for Big Front Seats (not waiting for auction pricing), I tried pricing out the cost of the Go Big bundle on my usual route yesterday and was quite shocked at the ridiculously high bundle pricing and inability to purchase the Big Front Seats à la carte.
I typically pay around $110-220 round trip for the seats. I figured if the bundle was in the same ballpark I would consider it. But the Go Big bundle adds a whopping $440 to the cost of my flight! And to pour salt in the wound my Spirit Savers Club membership offered zero discount off the bundle.
As a weekend traveler I don’t usually purchase bags. As a silver member I already get early boarding and shortcut security. I sometimes purchase wifi on one leg (it isn’t even offered on all flights). While I often purchase 1-2 drinks per leg I’ve only once bought a snack. So maybe I get $40-50 of value out of that $440 add-on. For that price I will just fly one of the big 3.
The Go Comfy bundle was priced at $220 over the base flight but offers the same rock hard coach seat with no extra leg room, so other than the blocked middle seat there is actually no extra comfort on offer. With my long legs and back problems this is a non-option for me.
For now Spirit has lost a regular customer until they return the option to purchase Big Front Seats à la carte. If I had to guess when they inevitably fail to sell all the bundled Big Front Seats they will offer the rest as discounted paid upgrades to ticketed customers the week before the flight. But that’s not a risk I am willing to gamble on.
People are avoiding Spirit and Frontier because, simply put, their customer service is awful.
I agree with an earlier post that Spirit screwed their gold members. We fly spirit about 15 times a year, mostly back and forth between our places in NJ and Florida. The main (read ONLY) reason we fly spirit is because I was able to buy the big front seat at approx 75-125. I even finally gave in and opened a spirit credit card to get to gold faster being that we fly so much. I was spending 7-10k a month in the credit card alone. Now with the new changes it’s a waste. I already get free drinks and snacks. I already get free carry on and checked bags. I’m canceling the credit card and going to start looking into other options.
About half our spirit flights are delayed for hours and hours and hours and hours, or canceled. I’m sure people mocked us behind our backs. But I believed in spirit and they let us gold members down.
Listen to Mufasa spirit…. Remember who you are….
I am going to disagree. I think you should give Spirit a chance. I am silver elite and have flown with them with almost no issues for 3 years, at least monthly. They still have some very low fares. Newer planes and are on time . Big comfy seats if you want them. Cheap seats if you’re on a budget.
Spirit is changing its business model so it can be purchased by any airline, with no opposition from the government, they do not expect this new rebranding to work.
As articles have notes lately, we need Spirit to survive. Mostly for the sake of those who don’t even fly them. But so far I don’t see it happening. Frontier will make it and possibly gobble up some of Spirit but the small competition behind them will never match the market share and pricing Spirit gave to the market and fares all over are going up.
Basically all the points made in the article and the comments is exactly what I said the second I read the bundle announcement.
Especially since I’m in the points game, never again will I use my credit to upgrade to the BFS. Their loss. I’m OK with base + Emergency Exit.
But Spirit is probably going bankrupt now or back peddling soon.
Until they start allowing purchasing your entire fare with points, I will never give Spirit my business.
You people that are commenting and also the author of this article are extremely hilarious. Try getting that big front seat when you actually want it. They must be doing something right since they are always sold out of them! For my international travel to South America I exclusively travel on Spirit because of it and I rarely travel if I can’t get my big front seat!!!
Despite what their press release stated it appears that Silver status no longer provides priority boarding after the new Go Big / Go Comfy bundle rollout? At least it is no longer listed as an option during checkout. I can’t speak to Gold Status. @Gary Leff it would be nice to get confirmation on the updated boarding zones.
“Guests will benefit from a more seamless journey with Spirit’s new boarding process starting Aug. 27. The redesigned process will include five groups that aim to reduce boarding time and enhance operational performance. Priority boarding will be available for Guests who choose the Go Big and Go Comfy options, Free Spirit Gold and Silver members, Free Spirit World Elite Mastercard holders and active-duty U.S. service members, and their spouses and children when traveling with the service member.”
https://ir.spirit.com/news-releases/news-details/2024/Go-Big-or-Go-Comfy-Spirit-Airlines-to-Offer-Unmatched-Value-with-New-Travel-Options-and-Transformed-Guest-Experience/default.aspx
I am shocked to hear that Spirit is supposedly off the rails, when by the same definition Southwest has been off the rails for decades! They have been more expensive than the Big 3 for so long, it’s a blatant lie to call SW a discount airline. We have only found one cheaper fare on SW in the last 15 years, and .. that Boston to Orlando flight, well, delayed for 4 hours and then canceled with no rebookinh options, waiting months for a refund when we rebooked on Big 3.. Unless you fly SW out of Texas, and always overpack such that you need free bags, onky then maybe you can find a cheaper flight.
@ Snazzy CPA — Yeah, BFS was always sold because the price was cheap. Not anymore.
@ Nicholas Golding — There is no such thing as a “comfy” Spirit seat. The seats are absolutely horrible, but tolerable for a one-hour flight at the right price. Now, there is no way in hell that it is worth flying Spirit.
Spirit deals with a certain type of consumers not like the writer who went out of his way to research. Spirit maybe thinking they can get away with it by tying the increase as a great way for its usual customers to enjoy the perks of flying with them. Certain people get used to old habits
Gary is almost at the point of killing Spirit Airlines. I guess they didn’t give him a free ticket. He needs to show apples to apples when comparing fares etc etc. Im not a big Spirit fan but fair is fair. He must be on the side that nixed the Jet Blue merger but is all in on the Alaska and Hawaiian deal. Stop with the headline splash news and stick with facts.
I’m not sure how this is “off the rails”. There’s no legal reason for them to charge more for less, and they can charge thousands more if they want to.
You just choose what airline you want to fly. It’s this weird concept called the free market.
Unless we’re trying to make it illegal for companies to sell at whatever price they want and our government just sets the price, the level of service, and the profit margin.
We could do that, but it would be pretty hard to call us capitalist with a free market.