Spirit Airlines has been out of bankruptcy and hit targets in the first quarter after years of lameness. CEO Ted Christie says his career is more lean and ready to take on competitors, including rivals Southwest Airlines.
Earlier this week, Southwest shocked its customers by announcing it would begin billing for check bags for the first time in a half-century flight. (There are several exceptions to the new Southwest bag rules that will take effect in late May.)
“I think it’s going to be a bit painful as they find their footing. We’ll use it,” Spirit’s Christie said in an interview Thursday.
Southwest was a standout in the US by offering all customers two free check bags, recession, fuel prices surges and other perks that withstanded the crisis, but most of their rivals introduced bag fees and raised them every few years.
Meanwhile, Spirit Airlines has had a general price set in the US, with seat allocations, check bags and other add-ons charges. This is a strategy that most large airlines, except in the Southwest, have copied in some way.
Once Southwest starts charging the bags and introduces the first basic economy class, the spirit could win over customers, not allowing seat allocations or free changes, Christie said.
Southwest said last year it would remove the single-class open seat model.
“At least there was an audience of people who were intentionally choosing to fly southwest because they felt it was easy. They knew they’d get two bags,” Christie said. “Now, it’s not like that anymore, but it’s easy for them to widen their squeeze and say they’re going to look around now.”
The spirit is much smaller than the southwest and even smaller than last year, but competes with airlines in urban areas like Kansas City, Missouri. Nashville, Tennessee; Columbus, Ohio; and Milwaukee. If the customer is looking at a travel site Expediaif Southwest is a newcomer, Spirit tickets could be cheaper and result better, Christie said.
Executives from other airlines say they expect to beat some customers in the southwest.
Delta Air Lines President Glenn Hauenstein said at JPMorgan Industry Conference on Tuesday that some consumers will choose Southwest based on the perks of free bags.
Spirit has recently been offering more ticket bundles, including seat allocations and luggage.
The career is now focused on returning to profitability. Pratt & Whitney engine recalls, increased costs, increased domestic competition and failed acquisitions resulted in net losses exceeding $1.2 billion last year, earning more than doubled in 2023. JetBlue Airways.
Spirit has rejected recent multiple merger attempts by fellow budget carriers Frontier Airlines. Christie said Thursday that the US’s fifth-largest airline for a low-cost carrier makes sense, not “off the table,” but that airlines focus on post-bankruptcy self-stable.
Through the restructuring process that began in November, Spirit said it had reduced its debt by about $795 million. The transaction converted the debt into capital of the major creditors. The carrier also received a $350 million share injection.
Spirit plans to relist the stocks on the stock exchange, but has not yet set a date.
