Spirit Airlines has come out of its Chapter 11 bankruptcy with a financial turnaround plan aimed at erasing its years of losses—and it also plans a turnaround of another sort, chasing affluent travelers rather than the price-conscious market it was created to serve.
Sharp reversals like that seem to be the vogue of the moment, with Southwest Airlines cutting nearly every tie with its own traditional operations such as open seating and free checked bags.
In Spirit’s case, the moves come after several years of losses, and failed merger plans, first with Frontier and then with JetBlue. During the bankruptcy proceedings, the airline rejected new offers from Frontier.
Spirit’s new look will include a revamped loyalty program, more premium seats, a premium economy section, in-seat power and other amenities that its new post-bankruptcy financing will allow. Spirit’s original ‘bare fare’ and charge for everything else strategy, which gave it years of profit, has grown tighter as mainline carriers moved into that market with basic economy fares. Spirit now hopes to serve more of the market above that, perhaps moving itself from the ultra-low-cost market segment it helped create into the ‘value’ market segment JetBlue, Southwest and several others fly in.
