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Ryan Knutson: On Monday, a big merger was announced in the airline industry.

Speaker 2: We've got a merger between Frontier and Spirit, the two airlines' low-cost carriers announcing that they have agreed to merge. This is a deal valued at $ billion. And while they're calling this

Ryan Knutson: Frontier Airlines is buying Spirit Airlines, the company that became famous for its super cheap tickets and infamous for charging customers for everything from carry on bags to water.

Alison Sider: Airlines like Spirit and Frontier have changed so much about what we have come to expect from travel in terms of fees and what the whole experience is going to be like.

Ryan Knutson: That's our colleague, Alison Sider.

Alison Sider: And they're going from being two fairly small bit players to potentially becoming the fifth largest airline in the US.

Ryan Knutson: This merger was years in the making and Alison says it could have a big impact on the way Americans fly. If this merger does get approved, what do you think it'll mean for the airline industry and for customers?

Alison Sider: I mean, I think it means that the ultra low-cost carrier model, whether you like it or you hate it, it's here to stay and it's going to be more influential than it already has been.

Ryan Knutson: Welcome to The Journal, our show about money, business and power. I'm Ryan Knutson. It's Wednesday, February 9th. Coming up on the show, Frontier and Spirit: How cheap flights became a big deal. The merger between Spirit and Frontier this week has been the vision of one man for nearly a decade. His name is Bill Franke.

Alison Sider: Bill Franke, he didn't work in the airlines. He was a CEO of a paper products company in Arizona. He kind of gets this reputation he's on corporate boards. He has an investment firm. He oversaw the emergence from Chapter 11 of Circle K, the convenience store chain. So he's sort of this corporate executive, he has a reputation as kind of a turnaround guy.

Ryan Knutson: One of the companies he turned around was a small struggling airline in Arizona in the s. From there, his interest in airlines grew, especially for the low-cost airline model, which was newly popular thanks to Southwest Airlines and other international carriers.

Alison Sider: He starts his own investment firm called Indigo and they invest in discount airlines all over the world, Singapore, Hungary, New Mexico, and start converting them to this model. And he's looking for someplace to do that in the United States to kind of out budget Southwest, I guess.

Ryan Knutson: In , he got his chance when his investment firm took over Spirit Airlines, a struggling carrier based in Florida and Franke became the company's chairman. In that role, he gambled that cutting ticket prices even more than Southwest would open up a huge market of cost conscious travelers. And he leaned hard into that strategy.

Alison Sider: The low-cost carrier model is just like stripping out all the costs, being really ruthless about cost cutting, flying planes more, longer hours, packing as many seats into the planes as possible. It means less leg room. The innovation they have or the intuition they have is that people, they don't want to pay this much for flights. There's a lot of people out there who would like to travel and the most important thing to them is a cheap flight and they don't really care about all these extras. So the stuff that all used to be part of the fee, and maybe you wanted some of it and some of it not so much, they are going to sort of separate all that out into all these different little component parts.

Ryan Knutson: When you fly Spirit Airlines, the initial ticket price is usually really cheap. Right now for instance, you could book a flight from Newark, New Jersey to Fort Lauderdale, Florida for 46 bucks round trip. But that's just for the seat. Everything else costs more. Want to bring a carry on? That's $ That is if you pay for it online when you book. If you just show up with one, it's $ If you want some water, it's $ If you didn't print your boarding pass at home, it costs $2 to print it at a kiosk or $10 if an agent prints it out for you at the check-in encounter, and the seats don't even recline.

Alison Sider: Well, they would call it pre-reclined.

Ryan Knutson: Pre-reclined. So they're already reclined?

Alison Sider: Yes. They took the recline function off the seats. It's a way to sort of add extra rows of seats. You don't need as much space between them if there's no recline.

Ryan Knutson: How do customers respond to all this nickel-and-diming at every turn on Spirit Airlines?

Alison Sider: Initially they hated it. People kind of weren't initially used to this. It becomes a big source of frustration for people, all these fees. But some people, they have people who like it, who sort of over the years, they've been doing this a long time now, over the years have figured out how to navigate the system.

Ryan Knutson: Mm-hmm (affirmative). You just wear all of the clothes that you want to have on the entire trip.

Alison Sider: Yeah. That's one way to do it. That's something people do. Or there's companies that make special Spirit size suitcases that'll sort of get you out of the bag fee. There's all kinds of ways to navigate that system.

Ryan Knutson: Over the years, Spirit has gained a reputation is an unpleasant airline to fly.

Speaker 4: On Spirit you don't get any free food or meals or anything like on other airlines. They give you a menu and will show you the menu, and you have to pay for everything, even for water.

Speaker 2: These were the three worst airlines in terms of on time arrival rates last year. Number one with just 69% of its flights on time, Spirit.

Speaker 5: Glad I made it here safe because I flew Spirit Airlines. Yeah, if you haven't flown Spirit, don't. Don't do it.

Ryan Knutson: How has Spirit Airlines responded to this criticism that people give that it doesn't have very good customer service and that it's an unpleasant airline to fly?

Alison Sider: I would say for years they had a pretty terrible reputation and they sort of just said you get what you pay for. And if you want a different customer experience, go book somewhere else. You booked this because it's the cheapest. You shouldn't be shocked by this. I think they've sort of, in the recent years, made it more of a priority to smooth things over with their customers and to be more transparent about what their fees are. And I think that's something that they've made a concerted effort to change in recent years.

Ryan Knutson: A spokesman for Spirit said today that the airline is transparent about its fees and that its customers like being able to pay for only what they need and nothing more. While a lot of customers might have been frustrated, the business model worked. Over the past decade, Spirit has become one of the industry's fastest growing and most profitable carriers. And with that success, Franke wanted to expand. In , he tried to get Spirit and his investment firm to buy Frontier Airlines, a struggling airline based in Denver, but Spirit's board of directors didn't want to pursue the deal. So rather than just continuing on at Spirit, he decided to quit Spirit and sell his ownership stake. And with the help of his investment firm, he bought Frontier Airlines himself and then at Frontier, he applied the Spirit business model.

Alison Sider: Basically the same thing that he had done with Spirit. And as one long term airline executive put it to me, it was basically copy-paste, the very similar strategy that they pursued at spirit. And there are some differences between the two, but basically it's another ultra low-cost carrier. They fly to slightly different types of destinations, more mid-size cities, not as many big cities as Spirit. They don't have quite the same international presence as Spirit, but it's a very similar strategy.

Ryan Knutson: And how does that strategy work out for Frontier?

Alison Sider: It works pretty well. They had an initial public offering last year. I think they raised over $ million, even at the tail end of the pandemic. Frontier grows fairly quickly. It seems to have basically worked out and it's still a relatively small carrier, but very quickly has built up and becomes a competitive threat to Spirit.

Ryan Knutson: Coming up, Bill Franke tries again at a Frontier-Spirit merger. Bill Franke's vision for Spirit and later Frontier hadn't just transformed those airlines. It also impacted the US airline industry in general. Passengers started to get used to cheaper tickets and paying for extras. So major airlines like Delta, United and American took notice, and adopted some similar methods.

Alison Sider: That's where we get products like basic economy, which started with Delta and eventually expanded. United, American offered the same thing. They realized airlines like Spirit are coming into their markets, into their hubs and people just see the low price and there's a segment of the population that just wants to pay less. They realize they need to be able to offer a fare that is competitive with what Spirit is charging.

Ryan Knutson: And did Spirit also have an impact on airlines charging for things like check bags and carry-on bags?

Alison Sider: Yeah. I mean, Spirit didn't invent charging for check bags, but they were pretty early to it and now that's standard. I mean, most airlines charge a 30, $35 fee for a checked bag. At one point that was included. And I think it's something that we've kind of come to expect from travel at this point for better or for worse.

Ryan Knutson: When the pandemic hit, it upended business for all carriers. But Alison says that low-cost airlines like Spirit and Frontier have actually fared better and recovered more quickly than their competitors because they don't rely so much on business class.

Alison Sider: The slowest parts of the travel industry to return have been business travel and long haul international travel. People just aren't taking as many work trips and they're not flying abroad to Asia and Europe and wherever else because of shifting travel restrictions and new waves of illness and all kinds of reasons. So the quickest segment to return has been the leisure traveler. Vacation traveler is almost basically back to where it was before the pandemic.

Ryan Knutson: And it's in this climate that Frontier announced this week that it's buying Spirit, though Alison says the companies were quick to point out that their merger wasn't due to the pandemic.

Alison Sider: When I spoke to Bill Franke and the CEOs of Spirit and Frontier this week, they said this is a merger that makes sense regardless of the pandemic. And it's really not about a play for pandemic recovery. At the same time, they are facing additional competitive pressures. The customers that they have historically catered to, the leisure travelers who want to go to the beach or who want to visit their grandparents and don't want to pay a lot of money, right now those are kind of the only customers. So airlines like Spirit and Frontier, they have the lower cost structure. They can offer these lower fares, but they're facing at least for now a lot more competition.

Ryan Knutson: Why is it that Frontier is buying Spirit and not the other way around?

Alison Sider: Honestly, I think that's also part of why this deal is happening now and not earlier that Frontier has kind of gotten to a size where that maybe makes a little bit more sense.

Ryan Knutson: The company said they haven't decided yet what the airline will be called after the merger. Like all mergers, the Frontier-Spirit deal will have to be reviewed by the justice department, which will evaluate whether it'll result in fewer choices and higher costs for customers.

Alison Sider: The justice department has indicated in the Biden administration that they're very skeptical of corporate mergers in general and for years over several administrations have been skeptical of airline mergers in particular. So I think it'll be a question whether that argument ultimately wins out.

Ryan Knutson: So when regulators do review this deal, what do you think the issues will be that they'll focus on?

Alison Sider: Yeah. I mean, I think they'll look at where a combined Spirit and Frontier, where they'll have the biggest presence, what routes they'll dominate, where they compete head to head now and what impact that has on pricing.

Ryan Knutson: Why do Frontier and Spirit say they should be allowed to merge?

Alison Sider: What the airlines have argued, what Spirit and Frontier have argued anyway, is that this makes them a more formidable competitor. That right now they do have some overlap. There are cities where they both operate, but that they're kind of Frontier is bigger in the west. Spirit's bigger in the east. They don't compete head to head on that many routes is what the airlines have argued. And that this will give them the scale to really compete more aggressively against larger airlines that are more dominant nationwide. And their argument is also that their business is based on charging the lowest fair and that that's not something that's going to change just because they've combined and they're not competing with one another anymore. I think regulators will have questions about that. I've spoken to several industry observers and experts and analysts who think that Spirit and Frontier have a point and that this ultimately just makes them a stronger competitor to bigger airlines that are still much more dominant. But I think there'll probably be a lot more analysis of that.

Ryan Knutson: The justice department declined to comment. Franke was asked about it on CNBC this week.

Bill Franke: But it's strikes me that this is the type of transaction that the administration should in fact support. It's beneficial to the consumer. It's beneficial to the employees, beneficial to the communities that the airlines serve. And at the end of the day, even on combination, these two airlines will control less than 10% of the market. So it's not

Ryan Knutson: If this merger does get approved, do you think it increases the chances that more of us will find ourselves paying to print our boarding passes and paying for water on flights?

Alison Sider: Yeah. I mean, If you don't like fees and you don't like getting nickel-and-dimes, and I think that ship has sailed in the airline industry. I don't know if every airline's going to be charging for water or charging you to print a boarding pass, but more narrowly slicing up different segments of the customer and selling things to them differently, that's been a trend that's been underway for some time and I think it's likely to continue.

Ryan Knutson: That's all for today, Wednesday, February 9th. The Journal is a co-production of Gimlet and The Wall Street Journal. If you like the show, follow us on Spotify or wherever you get your podcasts every weekday afternoon. Thanks for listening. See you tomorrow.

The business model

Spirit describes itself as an “ultra-low-cost-carrier”, and specifically targets price conscious customers with low fares and a “no frills” flying experience.  It is committed to being the lowest-cost airline in order to be recognized as the low fare leader in the markets they serve.

Moreover, rather than offer its customers a bundled price that airlines traditionally use to cover the cost of non-essential services beyond the base fare (e.g. checked luggage, advance seat assignments, refreshments, staff assistance at check-in), Spirit unbundles these options and gives its customers the option to pay for them individually.

Spirit serves a segment of the market that most airlines cannot without losing money.  Spirit had the market insight that many base fares are beyond the reach of a large customer segment who cannot afford frequent air travel, and Spirit recognized that if it could sufficiently lower its cost base it could serve this segment without significant competition.

Operating model

Spirit’s operating model is tightly focused on maximizing asset utilization and non-ticket revenues per passenger to reduce base fares and stimulate passenger demand that most airlines cannot serve profitably.

Maximize asset utilization:  airlines are inherently high-fixed-cost businesses, and Spirit seeks to lower per unit costs with high asset turnover and by managing the variable costs associated with using those assets.

• Single fleet type: they avoid the additional costs of training crews to operate multiple types of aircraft and ensure that flight crews are interchangeable across their network.  Maintenance, operational support, and spare part inventories are highly simplified versus competitors with more complex fleets.
• High seat density: Spirit invested in adjustments to its aircraft fleet to allow for 20% higher seat capacity on average vs competitors with comparable aircraft.
• Route maximization: Spirit&#;s average daily aircraft utilization is hrs vs hrs for JetBlue and hrs for Southwest.

Incentivize lower-cost customer behavior:  Spirit uses fees to incentivize customer behaviors that lowers its operating costs.  Two examples:

• High baggage fees: Spirit charges comparatively high costs for carry-on and checked baggage versus other airlines.  It seeks to dissuade passengers from flying with checked baggage which allows it to board and empty planes faster and thus fly more routes in a single day, employ fewer baggage handlers and support personnel, and increase fuel efficiency (fuel costs are ~40% of operating costs for a typical airline and the additional weight of luggage has a material effect on the amount of fuel consumed in-flight).
• Boarding pass printing: Spirit charges passengers $10 for boarding passes printed by a gate agent and temporarily introduced $2 charges for passengers who printed boarding passes at kiosks at the airport.  Its goal is to drive passengers to print their boarding passes at home to reduce the expenses they incur] by employing a large number of gate agent staff.

Maximize ancillary revenues:  Spirit stimulates passenger demand through low base fares while offering a suite of additional products and services designed to maximize non-ticket revenue per passenger including a subscription service to access flash sales of $9 fares, third-party travel insurance, advance seat selection, third-party travel packages, in-flight products, and on-board advertising.  They have been remarkably successful, growing ancillary revenues per passenger from $5 in to $55 in

Conclusion:

The result of Spirit’s strategy has been an unrivaled low cost position among domestic carriers.  It&#;s Cost Per Available Seat Mile (CASM), an important measure of unit costs in the airline industry, is 20% lower than Southwest&#;s, and % lower than United Airline&#;s.

This has allowed them to dominate a market segment where they face little viable competition.  80% of Spirit&#;s passengers buy tickets priced in the lowest fare band where they have a clear cost advantage:

Moreover, the success of their ancillary revenue strategy has allowed them to drive base fares well below the competition’s break-even cost.  Spirit&#;s average total fares (inclusive of ancillary revenues and base fares) are $ versus $ for Southwest and $ for JetBlue, despite higher pretax profit margins (21% for Spirit versus 16% and 12% for Southwest and JetBlue, respectively):

It has accomplished this while delivering industry-leading operating margins of 13 – 20% every year since their IPO in May  To be clear, Spirit is not a pleasant flying experience.  But its business model and operating model give it an impressive competitive advantage that has allowed it to reach a customer base for whom flying was once out of reach, all while delivering profits rarely seen in the airline industry.

Sources:

www.oldyorkcellars.com

www.oldyorkcellars.com

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www.oldyorkcellars.com

When low-cost carrier Spirit Airlines begins new service from Hollywood Burbank Airport to Las Vegas later this month, passengers may be surprised to find the carrier do something it hasn’t been known for: Arrive on time.

And when the Florida-based carrier lands in Sin City, the chances that Spirit fliers will file a complaint about the service will be much lower than in the past.

The carrier that shook the airline industry a dozen years ago with its ultra low-cost fares and high fees has overhauled its business plan, easing back from its single-minded drive to maximize profits and focusing on improving customer service.

The result, so far, has been a lower profit margin but better service, fewer lost bags and fewer customer complaints. Spirit has even raked in a few industry awards.

“You gotta get the mix right, and it seems now that the mix is pretty good,” aviation industry analyst Seth Kaplan said of Spirit Airlines.

Spirit still has one of the highest rates of passenger complaints when compared to its industry rivals, but the carrier has dramatically reduced that rate to complaints for every , passengers in March from complaints in March as the reinvention was being launched, according to federal statistics.

The changes at Spirit helped win the carrier the titles this year of “value airline of the year” by Air Transport World, an online trade publication, and “most improved airline of the year” by the Airline Passenger Experience Assn., an industry trade group that relies on ratings by passengers flying on nearly airlines to judge carriers.

“Their improvement matches the incredible strides that they have made in being one of the best airlines in the U.S. Department of Transportation reports for on-time performance,” the group’s chief executive, Joe Leader, said in a statement.

But Kaplan said that Spirit Airlines didn’t adopt a more passenger-friendly business plan for altruistic reasons. As larger rivals began in the last few years to sell bare-bones fares to compete for budget-minded travelers, Spirit Airlines was forced to reconsider its niche in the industry, he said.

“It wasn’t enough for the airline to be cheap because everyone was cheap,” Kaplan said.

Spirit Airlines appears to be following the lead of Ryanair, an Irish low-cost carrier, which tried to improve its reputation as the most hated European airline when its chief executive, Michael O’Leary, promised in to “stop unnecessarily pissing people off.”

Similarly, Domino’s Pizza in late launched a self-deprecating advertising campaign admitting that its pizza was bad and promising to do better with a new line of artisan pizza, remodeled restaurants and improved technology.

It’s a fraught strategy.

Ryanair Holdings and Domino’s have enjoyed a resurgence in revenue, earnings and stock price, although Ryanair lost some ground in the last fiscal year amid labor problems. And both remain subject to rude memes such as “Domino’s Still Sucks!”.

Some Spirit passengers say they have seen an improvement in the airlines’ service, but they say fliers must be prepared to pay fees for services they normally get for free on other carriers.

“The trick with Spirit is that if you know what you’re getting in to, you’re going to be fine if you do the math,” said Jason Rabinowitz, a travel blogger from New York, who often flies Spirit to Florida on leisure trips because of the low fares. “Spirit isn’t always cheapest after all the bag and seat fees, but it often is.”

Spirit Airlines still has plenty of critics, many of whom post their gripes about the airline on social media.

“They are the worst,” said Mandy Podlesny, a Keto nutrition coach from South Carolina who flies Spirit Airlines for business on a regular basis because she has few other choices from her nearest airport, in Myrtle Beach.

Her latest flight from South Carolina to Philadelphia was delayed for two hours but the gate agent and her pilot gave conflicting stories about the cause of the delay.

“They just really don’t care about customer service,” she said.

Still, the turnaround at Spirit Airlines has caught the attention of industry experts.

“It looks like management is doing something right,” said Madhu Unnikrishnan, editor of the trade publication Airline Weekly.

Only three years ago, Spirit Airlines had the industry’s worst on-time arrival rate and among the highest rates of lost luggage and passenger complaints.

The latest government data show that Spirit Airlines had a % on-time arrival rate in March, behind only Hawaiian Airlines, with an % rating. In contrast, Spirit was ranked last among all major airlines in March , with an on-time rating of %, according to federal data.

In January, the U.S. Department of Transportation changed the way it calculated the rate of lost and mishandled bags. Instead of reporting the number of lost bags for every 1, passengers, the federal agency now calculates the rate of lost bag reports for every 1, bags brought onto the planes. As a result, the overall rate has jumped for all airlines.

Although Spirit Airlines’ lost bag rate climbed under the new calculation, the carrier’s rate dropped in comparison to its rivals. Spirit went from having the highest rate of lost bags among the nation’s largest carriers in March , to the third lowest rate in March , behind Allegiant and Frontier Airlines.

One of the keys to turning the airline around, according to Spirit Airlines Chief Executive Ted Christie, was adding more time in between flights to respond to unforeseen problems such as mechanical issues and staffing snafus.

When an airline flies back-to-back flights around the clock, a delay in one of those flights creates a ripple effect that disrupts the schedule of many subsequent flights. Such delays can cost the airline to pay staff overtime or to rebook passengers from delayed flights, among other expenses.

“We believed that among other things, we were causing disruptions and spending money to resolve those issues on the back end,” Christie said during an interview at Los Angeles International Airport. “If we backed the airline [off] just a tad, we will save enough money on the back end to justify the extra time.”

The other key to Spirit’s turnaround, he said, was increasing communication between workers and executives to fix ongoing problems.

This was done by scheduling a weekly meeting every Thursday at p.m. at the Spirit Airlines headquarters in Miramar, Fla., with executives, representatives for the flight attendants, baggage handlers and others to discuss ongoing headaches and chokepoints.

The meetings began informally in spring under the leadership of the previous chief executive, Robert Fornaro, and continued after Christie took over the helm in January.

Among the topics discussed at the meetings were which flights were most often delayed and why, how staffing problems could be improved and whether additional terminal gates were needed to keep the planes on schedule.

“The best way to get a complex logistics company to run well is for people to break down walls and talk about it,” he said.

With fewer delays and less lost luggage, complaints declined and morale improved, Christie said.

“As the business runs more smoothly and interaction with guests are much more positive, that feeds upon itself,” he said.

Only a few years ago, Spirit had the highest profit margin in the industry, partly thanks to the revenue it generated from bag fees and charges for food, drinks and traveling with pets, among other expenses.

Spirit still loves to charge extra for everything under the sun. But since the carrier began focusing on customer service, Spirit Airlines’ income excluding special items rose to $ million in , compared to $ million in , the first year of Fornaro’s initiatives. In that same period, the net income margin dropped from % from 19%, according to Spirit Airlines earnings reports.

But Spirit Airlines representatives say the lower margins are primarily due to other factors, including higher fuel prices and a new, more expensive contract with pilots.

In that same span, the carrier has grown from a fleet of 95 planes with million “passenger flight segments” in the first quarter of to planes and million flight segments in the same period in A passenger flight segment is any point of a trip where passengers can get on and off a flight.

Financial analysts say the drop in Spirit Airlines’ profit margin is not a reason to worry because higher fuel and salary costs have pushed profits down for almost all airlines in the last few years.

The changes that Spirit Airlines has made to improve its customer service are a positive development for the carrier, said Betsy Snyder, an analyst at credit rating firm Standard & Poor’s Corp. Ultimately, she said, Spirit Airlines will thrive by offering what budget-minded passengers want: Low-cost fares.

“If you are a low-cost airline, people are going to fly you because of your price,” she said.

Other data suggest the recent changes made at the airline have not hurt the bottom line.

Spirit Airlines reported in generating cents in revenue per available seat miles flown — an industry measurement that gauges the efficiency of an airline. In , the carrier reported cents in revenue per available seat miles.

The company’s stock price is up 54% from the most recent low of $ a share in September , closing Thursday at $

In addition to adding flights from Burbank to Las Vegas, Spirit Airlines plans to launch service on June 20 from Sacramento to Las Vegas. That will make Sacramento the fifth California airport served by Spirit.

The airline is primarily targeting leisure destinations in North and South America, including Mexico, Jamaica and Costa Rica. Christie said Spirit Airlines has no immediate plans to expand to markets in Europe.

Such a move, he said, would require adding long-range aircraft, which would make Spirit Airlines’ business plan more complex.

“What we do today and the opportunities we have, we do well because we are focused on what we think we can be best at,” he said.

Ultra low-cost carrier of the United States

"Spirit Air" redirects here. Not to be confused with Air spirit, Spirit of Manila Airlines, or Spirit AeroSystems.

Spirit Airlines, Inc. (stylized as spirit), is an American ultra-low-cost carrier headquartered in Miramar, Florida, in the Miami metropolitan area. Spirit operates scheduled flights throughout the United States and in the Caribbean and Latin America. Spirit was the eighth largest passenger carrier in North America as of , as well as the largest ultra-low-cost carrier in North America.

As of early , Frontier Airlines, another US-based ultra low-cost carrier, is attempting to acquire Spirit. If approved by regulators, the combined airline would be the fifth-largest in the country.

History[edit]

Establishment –[edit]

The company initially started as Clippert Trucking Company in ^[6][7] The company changed its name to Ground Air Transfer, Inc., in The airline service was founded in in Macomb County, Michigan, by Ned Homfeld as Charter One Airlines, a Detroit-based charter tour operator providing travel packages to entertainment destinations such as Atlantic City, Las Vegas, and the Bahamas.^[6]

s[edit]

In , Charter One began scheduled service from Boston and Providence, Rhode Island, to Atlantic City. On May 29, , Charter One brought jet aircraft into the fleet and changed its name to Spirit Airlines.^[6][8] Scheduled flights between Detroit and Atlantic City began on June 1, ^[8] Scheduled flights between Boston and Providence began on June 15, ^[8]

On April 2, , Spirit Airlines began scheduled service to Orlando, Fort Lauderdale, and St. Petersburg, Florida.^[8] Flights between Atlantic City and Fort Myers, Florida, began on September 25, ^[9] Service at Philadelphia began in ^[10] During the next five years, Spirit expanded further, increasing service from Detroit and adding service in new markets such as Myrtle Beach, Los Angeles, and New York City.

In the summer of , Spirit Airlines overbooked flights, and 1, customers' tickets were canceled.^[11] The overbooking occurred because Spirit Airlines had given incorrect instructions to travel agents, causing those tickets not to be valid, even though the customers had paid for the flights.^[11] In response to criticism, Spirit Airlines said it would make sure all paid customers would always be able to fly to their destination, even if Spirit Airlines had to book them on a competitor's airline.^[11]

In , Janet Patton became Spirit Airlines' first woman pilot, and in she became the first woman captain. At the time Spirit was utilizing DC-9 and MD aircraft.

Spirit initially had their headquarters in Eastpointe, Michigan (formerly East Detroit) in Metro Detroit.^[12] It relocated its headquarters in November , moving to Miramar, Florida, in the Miami Metropolitan Area.^[6][13] Prior to the decision to move the headquarters to Miramar, Spirit considered Atlantic City, New Jersey and Detroit, Michigan.^[14]

s[edit]

In , the US Federal Aviation Administration (FAA) fined Spirit Airlines $67, for allegedly violating federal regulations on cabin and seat markings and placards.^[15] Discrepancies were found in the marking and placarding of emergency equipment, passenger seats, storage areas and doors on eight of Spirit's DC9 and MD80 aircraft.^[16][17]

In November , Spirit inaugurated service to San Juan, Puerto Rico, and implemented a fully integrated Spanish-language customer service plan including a website and dedicated reservation line.^[18]

In the fall of , Spirit resumed flights to Washington, D.C.'s Ronald Reagan Washington National Airport, which were suspended after the September 11 attacks. Spirit also began service to Grand Cayman, San Francisco, and Boston in , and in filed DOT applications to offer service to Costa Rica, Haiti, the Netherlands Antilles and Venezuela.^{[citation needed]}

In , Spirit exercised options to order 30 Airbus A aircraft for further expansion. Deliveries began in March ^[19]

On June 3, , Spirit Airlines made a WARN (Worker Adjustment and Retraining Notice) application to potentially relocate or lay off hundreds of pilots and flight attendants, and the closure of their San Juan and LaGuardia crew bases.^[20] In September , Spirit began placing advertisements on the side of aircraft, overhead bins, tray tables, seatback inserts and bulkheads.^[21]

In May , after more than four years of inconclusive negotiations between the airline and the Air Line Pilots Association (ALPA), Spirit pilots overwhelmingly (98% of votes) voted in favor of strike action over compensation, work rules, and benefits. At that time, Spirit pilots were among the lowest-paid Airbus pilots in the United States. On June 12, , Spirit grounded its flights when its unionized pilots walked out on strike, stranding thousands of passengers. This was the first passenger airline strike by American ALPA-represented pilots since Comair in ^[22][23] On June 15, negotiations between the airline and ALPA resumed, and a tentative agreement was reached late in the evening on June The tentative agreement, which Spirit pilots later ratified by a 74% margin, brought Spirit pilots' compensation and benefits in line with comparable Airbus operators in the US. Flights eventually resumed on June ^[24]

In , Spirit Plus was rebranded as "Big Front Seat" and business class service was discontinued. For an additional fee, a person could choose "Big Front Seat", or upgrade at the airport. In December , Spirit Airlines introduced the Free Spirit World MasterCard.^[25]

s[edit]

In April , Spirit Airlines became the first U.S. airline to charge passengers for carry-on bags.^[26] They were later followed by Allegiant Air and Frontier Airlines.^[27]

In April , citing the airline's strict refund policy, Spirit Airlines representative Misty Pinson announced that the airline would not issue a refund to dying veteran Jerry Meekins, who had purchased a non-refundable ticket between Florida and Atlantic City.^[28] The year-old Vietnam veteran and Marine tried to get his $ back after learning his esophageal cancer was terminal and being told by his doctor not to fly.^[29] The decision caused outrage among veterans' groups and the general public, some of whom threatened to boycott Spirit unless both a refund and apology were issued. On May 4, Spirit CEO Ben Baldanza apologized for how the situation was handled and personally refunded Meekins' ticket. Additionally, the airline made a $5, donation to the Wounded Warrior Project in Meekins' name.^[30]

In August , Spirit reached an agreement on a new five-year deal with the Transport Workers Union of America, who represent the airline's flight dispatchers.^[31]

In November , Morgan Stanley named Spirit the top growth airline pick for investors.^[32]

In January , former AirTran CEO Robert L. Fornaro replaced Baldanza as CEO.^[33] This prompted rumors of a merger with Frontier Airlines,^[34] which would have created the largest ultra-low-cost carrier in the Americas.^[35] Fornaro announced the airline would be teaming up with the Disney Institute to “create a common purpose and a fresh set of service standards”, and changing policies internally to create a more welcoming environment.^[36]

In November , Spirit's on-time performance was second in the country, behind only Delta Air Lines, a significant improvement from December , when it ranked last among thirteen airlines with % of flights arriving on time.^[37] In February , Spirit was the only airline in North America to make the list of the top 10 safest in the world.^[38]

In May , Spirit announced that they would be the first ultra-low-cost carrier to fit their aircraft with high-speed WiFi access that started in fall All of their aircraft were expected to be equipped with WiFi by summer ^[39]

On December 23, , Spirit Airlines announced its intention to purchase new Airbus Aneo family aircraft.^[40]

s[edit]

In , due to the COVID pandemic, Spirit Airlines received $ million in aid in the form of grants and loans via the Coronavirus Aid, Relief and Economic Security Act (CARES); the money was used to fund employees until September In July of that same year, the company announced that it would put 20%% of its employees on leave of absence in October.^[5] In August, some pilots agreed to take a voluntary leave of absence or have their work schedule temporarily reduced to avoid layoffs.^[41]

In July , a passenger died of COVID on a Spirit Airlines flight.^[42] Spirit Airlines claimed it notified the Centers for Disease Control but there was no record of the contact. Passengers on the flight were not informed that they were around an infected individual.^[42]

In February , it was reported that Spirit would be acquired by Frontier Airlines pending regulatory approval, with Frontier Airlines stock being the surviving entity. This deal will make Frontier Airlines the fifth largest airline in the U.S.^[43][44]

Corporate affairs[edit]

Ownership[edit]

Spirit Airlines, Inc. is a Delaware corporation^[45] that is publicly traded on the New York Stock Exchange (NYSE:&#;SAVE).

Business trends[edit]

The key trends for Spirit Airlines are (years ending December&#;31):

Headquarters[edit]

Spirit has its headquarters at Executive Way, Miramar, Florida,^[45] having moved there from its previous Eastpointe location in As of ^[update] there were located in the office. Chris Sloan of Airways Magazine stated that the building was "nondescript low slung".^[49] Sloan added that the interior, prior to a renovation, was, "To put it charitably, [] a dump", but that employees felt ownership over the office.^[49]

In the airline announced that it would move to a new headquarters of up to ,square-foot (46,&#;m²) in the Dania Pointe development in Dania Beach, Florida, spending $ million. The airline anticipates that it will house 1, employees.^[50]

Business model[edit]

Under CEO Ben Baldanza, Spirit began a transition to an ultra-low-cost carrier, following a fare model involving charging for amenities that are often included in the base ticket price of traditional carriers. Passengers who wanted to customize their itinerary or seat selection paid an add-on fee for each additional feature, which enabled the carrier to earn ancillary revenue in excess of 40% of total revenue.^[51] These included having an agent print a boarding pass at check-in versus doing it online or at a kiosk,^[52] for any large carry-on or checked bags, progressive fees for overweight bags, selected seat assignments, travel insurance, and more.^[53]

Controversy[edit]

Spirit Airlines has been the subject of complaints, and to punitive actions by the United States Department of Transportation (DOT). Most of the claims against the company were for allegations of deceptive advertising practices, customer service, and the airline's policies for charging additional fees at the time of purchase:

• In November , the DOT fined Spirit $43, for alleged deceptive advertising practices. The complaint claimed that the airline had been running an advertising campaign which promoted specific discounted fares on billboards, posters, and Twitter, but did not disclose full details regarding extra fees added onto the advertised rates.^[54][55]
• In January , the DOT fined Spirit $, for mishandling of complaints related to its treatment of customers with disabilities.^[56][57]
• In , and again in , the DOT received more passenger complaints about Spirit than any other airline; the rate of complaints was "dramatically higher" than the overall rate for the industry.^[58][59]
• On August 3, , Spirit Airlines cancelled 40% of its flights, leaving travelers stranded because Spirit Airlines has no arrangements with other airlines to book its passengers on other airlines' flights. Spirit Airlines said, "We're working around the clock to get back on track in the wake of some travel disruptions over the weekend due to a series of weather and operational challenges. We needed to make proactive cancellations to some flights across the network, but the majority of flights are still scheduled as planned."^[60] By August 10, Spirit Airline's schedule was stabilizing.^[61]

Destinations[edit]

Main article: List of Spirit Airlines destinations

Spirit currently flies to 83 destinations throughout Central America, the Caribbean, South America, and the United States. As of March&#;^[update], It maintains crew bases at Atlanta, Atlantic City, Chicago–O'Hare, Dallas/Fort Worth, Detroit, Fort Lauderdale, Las Vegas, Miami, and Orlando.^[62][63]

Fleet[edit]

A Spirit Airlines Airbus A in the current "Bare Fare" livery, introduced in

A Spirit Airlines Airbus A in the earlier blue paint scheme, used from until

A Spirit Airlines Airbus A painted in the grayscale livery used from until

Current fleet[edit]

As of March&#;^[update], the Spirit Airlines fleet consists entirely of Airbus Aceo and Aneo family aircraft.^[64] February fleet plan outlines aircraft planned by ^[65] An order of additional aircraft with 50 options was announced in October ^[66][67]

Historical fleet[edit]

The following aircraft formerly operated in the Spirit Airlines fleet:

Services[edit]

Frequent-flyer program[edit]

Spirit Airlines Frequent-flyer program is called Free Spirit, entitled as such due to the state of persons who travel using Spirit Airlines.^[69] Spirit has a three-tier frequent flyer status program. The tiers are Free Spirit Member, Silver (Earn 2, status qualifying points in a calendar year), and Gold (Earn 5, status qualifying points in a calendar year).

See also[edit]

References[edit]