In a bold move, Spirit Airlines has eliminated change and cancellation fees, mirroring a similar decision by Frontier Airlines. This shift away from traditional budget airline strategies signals a major transformation in the industry.
Previously, Spirit charged passengers fees ranging from $69 to $119 for flight changes, but under the new policy, customers can now modify their flights without penalties. This aligns with the trend of major airlines like Delta, American, Alaska, and United, who have already removed change fees for most fare types. Southwest Airlines, renowned for its flexibility, has never charged change fees.
The budget airline industry has traditionally relied on revenue from checked bags, seat selection, and other services to supplement low base fares. However, this strategy is evolving as Spirit and Frontier seek to regain profitability in the wake of the pandemic. The elimination of change fees is seen as a potential lifeline, particularly given that larger airlines with extensive domestic and international routes are already profitable.
In addition to eliminating change fees, Spirit is testing bundled packages that include the base fare along with add-ons such as checked baggage and early boarding, which were previously sold separately. This follows the trend set by Frontier.
The Biden administration’s push against “junk fees” could be a contributing factor to these changes. The Department of Transportation’s new rule requiring transparency around baggage fees has caused a stir in the industry, although Spirit maintains that their decision was not driven by this regulation.
A recent ruling by the Biden administration mandating automatic cash refunds for cancellations, rather than requiring customers to request them, is also impacting the airline sector. It remains to be seen how these changes will affect the profitability of Spirit and other budget airlines in the long run.
