Spirit Airlines will begin offering premium benefits—like reclining seats and free Wi-Fi
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Spirit Airlines is moving away from its history as a premium budget airline and will begin selling tickets that include some of the most popular add-ons in the bundles.
The Florida-based airline said Tuesday that the top ticket will be a “Go Big” package that includes priority check-in, a seat with room, snacks and drinks, a checked bag, a carry-on bag, and free Wi-Fi.
CEO Ted Christie said the changes are “taking the low-income journey to greater heights.” They also point to a deeper problem with Moya's long-term business model.
The airline with the bright yellow planes hasn't made a full-year profit since 2019—it has lost nearly $2.4 billion since—leading industry analysts to question what a bankruptcy filing could be in Moya's future.
Full-service carriers Delta and United make up a large portion of the US airline industry's profits, and they do it by focusing on premium fliers while selling bare-bones “basic economy” fares that rival Spirit, Frontier, and Allegiant for tight budget travelers.
Budget carriers have suffered more than the giants due to the large number of flights in the United States, which has led to lower prices. Delta, United, and American have booming business right now on long-haul international flights that can offset weak pricing power domestically. The wind does not.
Budget carriers are trying to adapt. Frontier Airlines — which, like Spirit, has been losing money for more than four years — matched the moves of major airlines and reduced flight change and cancellation fees for many customers this spring. Spirit immediately copied the move.
Spirit has other problems, including a $1 billion looming debt default and a shortage of planes because some of its jets are grounded for testing and repairs on Pratt & Whitney engines. Spirit expects up to $200 million in compensation from the engine maker, but its situation is so bad that Spirit announced in April that it would lay off some pilots and delay deliveries of new jets.
TD Cowen analysts downgraded Spirit shares to “Sell” this month and said that if Spirit can't renegotiate its debt or return leased planes to lessors, a prepackaged bankruptcy filing is likely.
Spirit's announcement on Tuesday targeted travelers who might not consider a budget airline.
It said customers will be able to book any of the new ticket bundles starting Aug. 16. That means they won't be available during long summer vacation trips but will be used during the busy Labor Day holiday.
“We've listened to our guests and are excited to deliver what they want: a selection of high-end experiences that are affordable and provide unmatched value,” Christie's said in a statement released by Spirit.
Air shares gained 5% in afternoon trading but are down more than 80% this year.
-David Koenig, Associated Press aviation writer
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