Spirit
Airlines has just announced that it is eliminating flight change and
cancellation fees, effective immediately, addressing a common frustration among
air travelers. This new policy arrives mere days after fellow low-cost carrier Frontier
Airlines made a similar
announcement, signaling an overall shift in strategy among budget airlines.
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Previously, Spirit’s
change and cancellation fees ranged from $69 to $119, depending on when the change
was made and how close it was to the passenger’s departure date.?
The elimination of
change fees and shift toward more upfront pricing represents a departure from
the traditional model of discount carriers. Such airlines typically attract
customers with low base fares and then charge extra for services like checked or
in-cabin baggage, advanced seat assignments, in-flight refreshments and more.
It is fairly usual for revenue from these supplemental services to outstrip what’s
generated by ticket costs.
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“This new policy
is among the best in the industry because it applies to each and every guest,” a
Spirit spokesperson said in a statement given to CNBC.
“We have many other enhancements in the works and look forward to sharing more
soon.”
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Frontier likewise
eliminated its change fees last week, but went further by providing newly
transparent pricing and package options that bundle such perks as early
boarding and checked luggage—previously offered only a la carte—into the ticket
price.
“As we continue to
see the demand and competitive environments develop, we know that we must also
change with the times,” Spirit’s Chief Commercial Officer, Matt Klein, said during
an earnings call that occurred earlier this month. “We will continue to test
out new merchandising strategies, which we anticipate will change how we think
about the components of total revenue generation.”
Bigger network
airlines—including Delta, United, American and Alaska—largely did away with
change fees amid the pandemic when ticket flexibility became a key issue, except
on the most basic, cheapest fares. Another major U.S. carrier, Southwest Airlines,
did not charge change fees to begin with.?
And, unlike larger
airlines, both Spirit and Frontier continue to struggle towards renewed profitability
post-pandemic. In light of its failed
merger with JetBlue and a $142 million net loss posted in the first quarter
of 2024, Spirit has begun to reconsider its previous approach.
Spirit’s CEO, Ted
Christie, told analysts during an earnings call, "We have been listening
to our guests, and general airline passengers, and have been reviewing the
competitive set of products in the industry," The Points
Guy reported. "It is clear we need to introduce some changes to
reflect the new dynamics in the industry, and make Spirit a more compelling
option for the traveling public," Christie said.
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