Spirit Airlines (SAVE) , which once caught the interest of the larger JetBlue Airways (JBLU) in an acquisition that was ultimately blocked by a federal judge last February, has been making major changes to its business strategy.
In July, the airline announced it was reworking fare classes to start with a basic "Go" fare that does not include a carry-on but does allow a personal item. From there, the fare categories go to "Go Savvy," "Go Comfy" and "Go Big" — with "Go Big" being a fare class that, with a larger seat and early boarding, resembles premium economy on a mainstream airline and comes with the accompanying price. A few weeks earlier, Spirit had also announced that it was getting rid of change and cancelation fees as well as lifting its checked baggage limit from 40 to 50 pounds.
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The latest change announced by the airline has to do with in-flight Wi-Fi. Currently starting at $3.99 for low-speed for all but the top fare class where it's included, free Wi-Fi will now also be available to Gold members of its Free Spirit loyalty program.
Spirit promises changes that 'provide guests with greater value'
The top level is reached by earning 5,000 Status Qualifying Points (SQPs) with the airline; six points are earned for each dollar spent on airline tickets. There are faster ways to reach the necessary tiers (2,000 SQPs for Silver status) by spending on in-flight food and perks such as bags, using Spirit's signature credit card and taking advantage of certain promotions periodically launched by the airline.
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"These changes build on Spirit’s transformation and investments to provide guests with greater value and enhance their travel experience," a Spirit Airlines spokesperson said in a statement first reported by Travel And Leisure.
The airline is also accelerating points-collection to 12 for every dollar (or, if one already has status, double the increased number one would collect) on bookings made before Dec. 31 of this year for travel up until Dec. 31, 2025.
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There is a very simple reason behind all these Spirit changes
Such changes, which may seem increasingly generous, come at a time when Spirit is facing increasing competition from other low-cost airlines and needs to lure customers with additional perks.
The decision to eliminate change and cancelation fees (one will still have to pay any difference in the airfare) came after Frontier Airlines (FRON) did the same with the introduction of fare bundles. Spirit's new baggage policy is likely meant to keep up with Southwest (LUV) 's industry-leading two-bags-regardless-of-fare-class policy (although that may also be on the chopping block as the airline deals with investor pressure to get back to profitability).
Spirit, in turn, has reported its 11th consecutive quarterly loss at the start of August amid challenges that include both winning over customers and a recall of the Pratt & Whitney engines used in several of the planes it had planned to use to run new flights to Mexico's Tulum as well as other places.
"What we've seen over time is that less people are actually flying on Spirit," Spirit's Chief Commercial Officer Matt Klein said during a CBS interview in July. "So we believe the changes we're making are about attracting new customers."
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