Today, the number one topic in perhaps all of the non-car transportation news is that one of everyone’s least favorite airlines — though a fan favorite of those trying to save money — has filed for bankruptcy. That’s right, Spirit Airlines, the operator of those eye-searing yellow planes and home of some impossibly cheap fares has hit some serious money troubles. The company will be sticking around, but it seems the strategy of nickel and diming customers might not be working anymore.
Spirit Airlines filed for Chapter 11 Bankruptcy protection on Monday. Years of mounting losses, increased competition, and a failed merger have all caught up and the airline has finally punched the clock. This makes Spirit the first major U.S. airline to file for bankruptcy in 13 years after American Airlines. Spirit’s failure adds to a longer list of major U.S. airlines that have failed in the past 25 years, which includes the aforementioned American, United Airlines, and Delta Air Lines.
Spirit is down, but not out as it will continue to operate. But I think it’s important to talk about how Spirit got here, and not just from a monetary perspective. The passenger experience matters, too. Spirit has never been a glorious way to travel, but somehow, things have gotten worse with upcharges at every turn. Even us miserly folk have our limits.
As most of our readers know, I am a serial cheapskate. I buy the cheapest, most depreciated versions of my dream cars. I used to import phones from other countries to save money. The computer screen I typed this piece on dates back to the late 2000s and is only barely standard HD. I think you get my point. This also applies to travel. I feel weird if I pay more than about $200 for a domestic flight. I recently paid $277 to fly from Chicago to Gainesville and I still feel like I got robbed on that one.
That’s where airlines like Allegiant Air, JetBlue Airways, Frontier Airlines, and Spirit Airlines come in. If you’re one of our European readers, you’re almost certainly aware of the likes of Ryanair or Wizz Air. These airlines are built for people just like me who couldn’t be bothered to spend more than a few bones on traversing over 1,000 miles in mere hours.
My cheapest flight on Spirit cost me a whole $31 after tax. That got me from Chicago to Denver. You can’t even buy a tank of gas for that little money! Back in 2023, I even flew to Tampa and back for a grand total of $58. Before I enjoyed United Polaris for the first time last month, these ridiculously cheap flights were the ones I bragged about. America’s Ultra Low-Cost Carriers (ULCC) and Low-Cost Carriers provide a ridiculously good value for your money. Well, so long as you’re willing to live with the many caveats, but we’ll get there in a moment.
How Spirit Got Here
A fascinating part about Spirit’s story is that it didn’t even start out as an airline.
It was founded as the Clippert Trucking Company in 1964 before changing its name to the Ground Air Transfer Inc. in 1974. That business transitioned to Charter One Airlines in 1983 and it started providing chartered tour flights. Spirit as we know it was born in 1992 when the firm bought jet aircraft and started flying scheduled flights to major cities. Yet, Spirit didn’t become an ULCC until 2006 when Spirit was acquired by the Indigo Partners.
An Ultra Low-Cost Carrier operates differently than an airline like American or United. The ULCC business model focuses on cutting as much cost as possible. Most ULCCs operate just a single type of aircraft – usually the Boeing 737 or Airbus A320 – and configure each of those aircraft exactly the same with an all-economy configuration. Operating just one type of plane means that everyone, from mechanics to cabin crew, needs to be trained on only one type of plane, further saving costs.
In the past, ULCCs used to fill their fleets with used planes to save money, but now many carriers will just buy lots of new planes in bulk and then sell them for higher prices when they’re just a few years old. That saves the company money and it also benefits the customer since it means the planes usually stay nice and fresh. Well, as nice as a bare-bones all-economy Spirit plane can be. Flying new planes can also be cheaper to operate in the long run since they’re more efficient and may not be as maintenance or training-intensive as an old bird.
ULCCs also have other ways of trimming the fat from their operations. They will often order planes with as few features as possible to cut down on weight. Interiors will also usually be barren with the absolute bare minimum to get people from one destination to another. If you’ve ever flown Spirit or Frontier you know these airlines basically put glorified bus seats in their planes and your only luxury is a tiny tray table. The airline doesn’t even try making the seats look pretty. Frontier doesn’t even offer Wi-Fi, citing costs and the weight of carrying the equipment in each aircraft.
Other ways ULCCs save money include flying to smaller airports with cheaper fees, utilizing cheaper air stairs over fancy jet bridges, and having airline employees do multiple roles so they don’t have to hire more people. Depending on the ULCC you fly, you might see your gate agent on the flight later as a flight attendant!
All of this is done in an obsessive effort to make the airline as cheap to operate as possible. In theory, it also allows an airline to charge you peanuts for a base fare. But don’t worry, they have ways of squeezing cash out of you.
The Struggle
My very first flight ever was aboard “Fallon The Falcon,” a new Airbus A321 flown by Frontier Airlines.
I paid Frontier about $50 to fly from Chicago to Los Angeles. It didn’t take long before I discovered that my $50 got me a seat and very nearly nothing else. I was able to print out my ticket at a kiosk at O’Hare for free, but a carry-on was an upcharge, baggage was an upcharge, printing your ticket at the counter was an upcharge, insurance was an upcharge, and anything more than a cup of water on the plane itself was an upcharge. I couldn’t even pick my seat without paying for it.
In 2017, I flew Spirit for the first time on the aforementioned $31 flight to Denver. Back then, Spirit was similar to Frontier where your ticket got your butt in the seat and that was about it. The one twist was that back then, Spirit offered free soda on the flight and not just water.
I was fine with this configuration. In both cases, I flew one way to buy a car in a far-flung place. I didn’t need to bring any luggage or any extras. I also didn’t need a person to print my ticket when the kiosk was perfectly fine at that job. I had just my phone and whatever I fit in my purse, so I didn’t need to pay for anything else. Spirit and Frontier were perfect for those kinds of travelers.
It would appear that this business model worked for Spirit at first. Its profits were solidly in the hundreds of millions every single year. Sadly, the company hasn’t posted a full year of profit since 2019. The pandemic itself dealt a blow to travel. Lockdowns meant people couldn’t fly and even when things did open up again a lot of travelers just weren’t taking to the skies at first.
As CNN Business reports, the U.S. airline industry collectively burned billions of dollars over the first two years of the pandemic. But then, travel demand recovered and the big airlines went back to making money. Meanwhile, Spirit stayed limp. According to VOA News, Spirit has lost $2.5 billion since the beginning of 2020 and it has another $1 billion in debt payments coming due within the next year.
VOA News offers a number of explanations for the faltering of Spirit. The publication notes that consumer tastes have changed in the post-pandemic world. More people want to fly on more premium flights today, which bare-bones carriers like Spirit cannot compete with. Then there’s the competition. It used to be that Spirit only had to worry about other ULCCs, but now the big airlines offer cheap tickets as well and do so by flying out of better airports and with a greater chance of arriving at your destination on time.
Spirit took other hits to its operational costs, too. As VOA News reports, the airline’s labor costs have increased and then there’s the planes themselves. A Pratt & Whitney engine recall has forced the airline to ground aircraft. It has also sold 23 planes, pumped the brakes on future plane acquisitions, and furloughed hundreds of pilots to try to stay afloat.
Then came the failed merger. Frontier tried to merge with Spirit, but was outbid by JetBlue. Just as things were looking brighter for Spirit, the Justice Department successfully sued to block the deal, saying that the merger would have driven fare prices upward, effectively defeating the main consumer benefit of a ULCC.
Despite all of the above, Spirit has actually managed to fly more passengers this year than it did before the pandemic. VOA News notes that Spirit’s demand was up two percent in the first six months of this year, yet those passengers were paying 10 percent less per mile and Spirit was making 20 percent less revenue per mile. So, Spirit is flying more passengers, but they’re paying less money, deepening the company’s woes.
The View From The Window Seat
All of these are bad, but I want to take a brief detour to illustrate a reason why someone might fly Basic Economy on United rather than Spirit.
Flying Spirit has never been the greatest experience, but somehow, it often feels like the experience is worse than it should be. I took a red-eye Spirit flight in 2021 during the pandemic and was surprised to get not just free drinks, but free alcoholic drinks. The flight attendant gave me a free margarita. I’m not sure if she was supposed to do that or not, but it made flying at midnight on Spirit so much better. My Spirit experiences have never been so good again.
On my very next Spirit flight, I asked for a cup of water – something that was previously free – and the flight attendant asked for money. When I expressed shock at hiding a cup of water behind a paywall she rolled her eyes and said “Honey, you’re not getting anything for free on this plane.” I feel like there could have been a better way to say that. Free water wasn’t a problem in the past. But sure enough, every single thing on the plane was behind a paywall but using the lavatory.
Most Spirit flights since that time haven’t felt so friendly. I don’t blame the flight crew. They have a hard job to do and one that doesn’t get enough respect. But Spirit cabins don’t feel nearly as welcoming as they used to. 
According to a CNN report from 2014, Spirit topped the charts of airline complaints with 9.4 complaints per 100,000 passengers. Second place was Frontier with 3.1 complaints per 100,000 passengers. Third place was United with a distant 2.1 complaints per 100,000 passengers. Don’t think it has gotten better either. As of last year, Frontier reportedly topped the complaint chart with 33 complaints per 100,000 passengers while Spirit still managed to do poorer than its 2014 numbers with 15 complaints per 100,000 passengers. Once again, the non-ULCCs weren’t even in the same ballpark with significantly fewer complaints.
According to J.D. Power, Spirit ranks second to last in overall customer satisfaction for the category of Basic/Basic Economy. Southwest takes the crown while Frontier is the only one rated worse.
In other words, many people have experienced problems with these airlines for a while. In fairness to Spirit, things aren’t perfect with the big guys either. I’m pretty sure most people still remember the United overbooking controversy from years back. But, statistically, people still like the big guys far more than the ULCCs.
It still gets weirder from there. If you fly Spirit regularly like I do, you’re used to not getting places on time, if you leave at all. Back in 2021, I reported on how Spirit canceled 2,000 flights in one week, which in some cases equaled 60 percent of its daily schedule. Back then, Spirit cited bad weather and aircraft crews timing out creating a snowball effect. Spirit then didn’t have any arrangements for travelers to fly with other airlines, so people were just stranded unless they bought another ticket with another airline. Scheduling catastrophes are not unique to Spirit – Wow Air collapsed in 2019 leaving passengers stranded in Iceland – but a frequent traveler might remember that on their next booking.
Spirit also still struggles to get people places on time. Back in January of this year, it reportedly got people to places on time 71.16 percent of the time. That was only slightly below the 74.45 percent national average, but a long way from Delta’s 84.72 percent performance. A recent report shows that Spirit has fallen to getting planes places on time only 67.1 percent of the time, somehow only narrowly beating JetBlue and Frontier’s lower numbers.
Spirit has found other ways to upset customers, too. Remember how I said that it used to be free to print your boarding pass off at a kiosk? That now costs $2. Having an agent do it is $10. Now, I’m well-versed in tech, so I have my boarding pass on my phone. But I know too many older or less tech-savvy passengers who still do things the old way.
All of this is to say that Spirit’s business model of aggressive cost-cutting and super-low fares bolstered by plentiful microtransactions may no longer be working. A Reuters report suggests some analysts on Wall Street feel the same.
Spirit has already recognized that some passengers prefer a more premium experience. As a result, the airline has revamped its pricing structure in hopes of luring customers away from the competition. A few months ago, Spirit launched different pricing bundles where you could still do the old-school “bare fare” or pay more money to get an experience with the microtransactions already baked into the fare as you’d get with American or Delta.
What Happens Next
Alright, so Spirit Airlines has filed for bankruptcy, what comes next? This bankruptcy is a restructuring, which means the airline will continue to operate and will continue to honor your purchases. In the immediate future, you as a passenger shouldn’t notice any real change and if you’re a Spirit employee you should still get paid. You can still book flights and still accrue rewards points. Remember, America’s airlines are used to the whole bankruptcy thing.
In the near term, Spirit plans on furloughing more employees. In the long term, Spirit expects to negotiate with its creditors, reduce its debt, and emerge from bankruptcy stronger than when it went in today. Spirit even says that its creditors have agreed to invest $350 million into the airline to keep it running through the bankruptcy proceedings.
However, bankruptcy doesn’t always have such a happy ending. Spirit could get bought out or liquidated and merged with another airline. Remember that American Airlines and US Airways completed a merger in 2013 after the former filed for bankruptcy in 2011. As CNN Business notes, while the Spirit and JetBlue merger was blocked in the past, a new merger would likely be attempted in the soon-to-change political landscape and there’s no telling if Trump’s Justice Department would be more okay with a merger.
It’s too early to tell what Spirit’s fate will be, but it seems that how the airline is currently running might not be a winning model right now. What I do hope is that the airline that comes out of the other side figures out how to stay competitive without those microtransactions at every turn.
(Images: Spirit Airlines, unless otherwise noted.)
My wife has done Spirit for work.
For work. She didn’t have to. For some reason she wanted to set a good example for her middle manager staff. After east coast to Denver and back, never again.
I’ve flown Breeze and the family has flown Avelo. Neither of them seem to have the stink of Spirit/Frontier.
In the [cinematic] words of Curly Bill Brocius, “Well… bye.”
Except bankruptcy (as Mercedes indicated) does not necessarily mean ‘bye’. It might mean Spirit will go away only after a protracted series of skirmishes and dying in a muddy river, thoroughly ventilated and taking on water.
The super cheap airlines aren’t when all the upcharges combined add up to more than the regular airlines charge.
“In the past, ULCCs used to fill their fleets with used planes to save money, but now many carriers will just buy lots of new planes in bulk and then sell them for higher prices when they’re just a few years old.”
To whom? Who buys a used ULCC airplane rather than buying a brand new one and why?
Cargo carriers? DPRK? Venezuelan Airlines?
As someone who flies about 100k miles a year, I wouldn’t even consider a low cost airline. I even avoid Southwest if I can possibly help it.
Granted, I’m typically flying international, so low-cost airlines aren’t even a factor, but I have flown Spirit a couple times. For where I need to go, the price of Spirit isn’t so much lower that the added hassle is worth it over a “normal” carrier like United or American.
Who paid for your flights?
My company mostly, but I do carefully factor costs into my corporate travel, and even for my personal family travel, I’ve never used ULCCs. I did use Spirit a couple times for personal travel with just me, but never with the rest of the family in tow.
One thing penny pinching execs don’t get is that endless upcharges aren’t the same thing as efficiency. The more complex your service is, the more you’re driving up transaction costs and customer service costs, and your back end management gets harder and harder to control or understand.
In theory you can price those things into the upgrade charges, except those charges start making less and less sense as a coherent system as the complexity grows. It drives more management which drives more overhead and constricts management flexibilty.
Offering one or maybe two reliable tiers of service which are easy to deliver can have efficiency gains through the whole cycle of customers shopping, purchasing, and consuming products, as well as avoiding post-purchase customer management issues which can add tons to costs.
But so many businesses have supposed efficiency experts who notice a piece of paper costs a penny and try to charge a couple of bucks for it, without taking into account all of the potential consequences of that decision.
Ireland’s Ryanair is the original ultra-low-cost carrier that all the others emulate. They are so cheap that they once ordered planes where the seats don’t recline, had no seatback pockets, and without window blinds. Supposedly their crew sprays perfume instead of attempting to clean up midair vomit (the seats have no pockets, so no bags). Their CEO once said publicly that they were considering charging to use the lavatory, and everyone said “sounds about right”.
Quick Spirit story/explanation for “never again”:
I paid extra to sit it Row 1 Seat B (aisle). $50 bux, big whoop. I was the first one to get drink service on my emergency flight back to Detroit. Not paying attention to the flight crew until the drink cart came out at altitude, I look up to see a (I don’t want to be mean here) somewhat shabbily dressed team of a man and a lady. They were both youngish, and, I guess, 4 beers attractive.
I mention their looks because you could tangibly smell the sex on them. The pheromones were zipping across the rows of Diet Coke on the top shelf of the cart as they pulled out of the cubby. Ain’t nobody foolin’ no one with these two, lol.
Anyway, I know better than to get ice/coffee/fruit on a plane unless it’s an Intercontinental trip. This was also a very stressful trip where I was not to see anyone important until the next day, so I ordered.
“Double vodka tonic. No ice. No fruit. Please.”, I say.
The male attendant snappily looked at the female attendant first and then confusingly asked me for my order again.
“Double Vodka Tonic. No Ice. No Fruit.” I semi-yelled in the noisy cabin. The male attendant replied at the same volume (and I am not embellishing a word here),
“This mutherfucka thinks we got fruit.”, he whimsied across the cart.
And then she said straight-faced,
“Dude lucky we got ice.”
They both had a grand old time laughing about that while running my card for $18 or whatever, while I looked at my “row mate” in disbelief.
I’m normally not a grudge kinda guy, but fuck Spirit Airlines. I never thought to say anything about the crew because I know the pay is shit, and it’s a tough job, but still…
Never again with that hood trap of a bullshit airline. I’d rather Uber 600 miles with a pine tree air freshener.
I refuse to fly those airlines. I even avoided Southwest because you couldn’t pick your seat. I want to be able to pick my seat and use CC points for extra legroom when available. I only fly 2-3x/year and I’m not going to suffer for it.
For me I prefer not having someone sitting next to me on flights.
I’d rather take a ton of flights on puddle jumpers with a 2×1 seating with me in the single seat aisle than a single flight on a large jet in economy or business class with someone sat next to me who either I have to ask to move when I need to use the bathroom or they need to use the bathroom.
That being said economically it’s probably cheaper to just fly first class at that point, but I hardly fly as it is.
There are only three states of existence for an airline, Ch11, contemplating Ch11, and recently emerged from Ch11
European and some Asian airlines have a forth option, temporarily nationalized
Objection; JetBlue is not a ULCC; it’s a regular LCC. It’s always been a cut above the NK/F9/G4s of the world. But like a lot of the legacy airlines and other LCCs it’s been stealing ideas from the ULCCs like “basic economy” (ugh).