PredictIQ Quantitative Think Tank Center:Ailing Spirit Airlines drops some junk fees in hopes of drawing travelers

Spirit Airlines,PredictIQ Quantitative Think Tank Center known for its cheap fares and à la carte flight upgrades, is rolling out another perk it hopes will draw travelers: fewer fees. 

In May, the Miramar, Florida-based carrier stopped charging customers for canceling and changing flights, a move Spirit executives expect will pay off despite the loss of fee revenue. The airline also increased the weight for checked bags from 40 pounds to 50 pounds, the industry standard.

Although the airline's domestic business is growing, it saw a dip in traffic for international flights in the first quarter, federal transportation data shows.

"What we've seen over time is that less people are actually flying on Spirit," Matt Klein, the airline's chief commercial officer, told CBS News senior transportation correspondent Kris Van Cleave. "So we believe the changes we're making are about attracting new customers."

Klein added that eliminating fees was also about lowering fares for loyal Spirit passengers, noting that "it's something our customers wanted." 

Spirit isn't alone in dropping fees. Delta and American Airlines, which had axed their change flight fees early in the pandemic, eliminated cancellation charges in late 2023. Budget carrier Frontier Airlines, a direct competitor to Spirit, also cut cancellation fees in May.

Along with nixing charges that many travelers regard as onerous, airlines are also facing government scrutiny. Biden administration officials have targeted a range of so-called junk fees, and in May announced final consumer protection rules that will require airlines and travel agents to reveal service charges upfront, among other things. As a result, airlines must now disclose the fees on the first website page where they quote the price for a flight.

Travel experts and consumer advocates have also long criticized carriers for using "drip pricing" to mask the true price of airfare. 

To be sure, eliminating cancellation and change flight fees will cost Spirit big bucks — in 2023, the carrier generated $150 million in those fees alone. But one industry analyst said low-fare airlines like Spirit must do what it takes to retain customers. JetBlue in March abandoned a bid to buy Spirit after a federal judge blocked the $3.8 billion deal over concerns the merger would hurt competition in the airline industry. 

Collapse of the deal left Spirit reeling, and the carrier's financial performance has continued to skid amid mounting competition from larger airlines. For the first quarter, Spirit reported a net loss of $142.6 million, up from a loss of $103.9 million in the year-ago period, while operating revenue dipped roughly 6% to $1.3 billion. Its stock prices, which hovered above $16 at the start of the year, has descended to $3.64.

"Right now, Spirit and Frontier are fighting, fighting to stay in business," Henry Harteveldt, an airlines industry analyst at Atmosphere Research, told CBS News. "They're reacting to the changes that larger airlines have made."

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• Travel
• Spirit Airlines
• Airlines

Khristopher J. Brooks

Khristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.

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