A Spirit Airlines aircraft undergoes operations in preparation for departure at Austin-Bergstrom International Airport February 12, 2024 in Austin, Texas.
Brandon Bell | Getty Images
Spirit Airlines is waiving change and cancellation fees, effective immediately, days after Frontier’s similar announcement, in an overhaul of the longstanding strategy of the nation’s largest discount carrier.
Before the new rule, Spirit charged between $69 and $119 for ticket changes and cancellations, depending on how close to departure the customer made the change.
“This new policy is among the best in the industry because it applies to every guest,” Spirit said in a statement to CNBC. “We have many more improvements in the works and look forward to sharing more soon.”
The changes mark a shift in low-cost airlines’ long-standing pricing approach, which includes low base fares to attract customers and additional fees for advanced seat assignments, bottled water and cabin baggage. Ancillary revenues regularly exceed the ticket prices of these airlines.
“As we continue to see the demand and competitive environment grow, we know we also need to change with the times,” Matt Klein, Spirit’s chief commercial officer, said during an earnings conference call earlier this month. “We will continue to test new merchandising strategies, which we hope will change the way we think about the components of total revenue generation.”
Spirit and Frontier are both trying to return to profitability in the wake of the pandemic, while major airlines that offer both single fares to domestic destinations and large international networks have reported profits.
Most major rivals like Delta, American, Alaska And United got rid of change fees during the Covid-19 pandemic, except for the cheapest and most restrictive tickets. Southwest Airlines does not charge customers flight change fees.
In addition to getting rid of modification fees, Border also announced Friday that it will begin offering packages that include additional options such as early boarding and checked bags that they previously offered a la carte.
Spirit also offers bundled packages at varying prices that include perks including checked bags.
President Joe Biden and the Department of Transportation have been cracking down on what they consider “unwanted fees.” As part of this initiative, the DOT issued a new rule requiring airlines to be upfront about additional fees such as those for checked or carry-on bags, which was later challenged by a large number of airlines.
Spirit said the end of cancellation fees was not related to the new rules.
The Biden administration also recently issued a new rule requiring airlines to offer automatic cash refunds in the event of cancellation rather than in response to a customer’s request.
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