Right before the holidays, budget carrier Spirit Airlines filed for bankruptcy. 2024 was a difficult year for air travel in general. Nevertheless, could anything have been done to spare Spirit’s fate? That is exactly what we aim to examine in this article…
What Put Spirit Airlines “En Route” to Bankruptcy
On November 18, 2024, Spirit Airlines officially announced filing for Chapter 11 bankruptcy. This marks the first time that a major carrier filed bankruptcy since American Airlines did so in 2013.
There are “reasonable” factors for this — such as airline earnings dropping despite more travel overall. But in the case of Spirit, industry struggles were simply the final nail in the coffin.
The airline has not been profitable since 2019 and shares have dropped 97% since its 2018 peak. This is likely because leadership ignored several red flags that contributed to its downfall…
Flight Service Lowered Price Instead of Adding Value
Based on the previous statistics, Spirit Airlines filing for bankruptcy is not surprising…
Profit loss…
Share value plummeting…
Nevertheless, Spirit built its entire brand on being, “Less money, more go.” This meant the lowest flight fares in exchange for bare-bones comfort.
The strategy worked for a while — especially among travelers flying short distances.
However, a “deal” is only good when the value exceeds the money spent. To that end, Spirit Airlines began to drop more than just prices…
The Airline Became NOTORIOUS for Poor Customer Service
Spirit Airlines is considered a wallet-friendly air service. Still, travelers do expect a basic level of courtesy from airline staff.
UNFORTUNATELY, THE BRAND HAS EARNED A REPUTATION FOR LESS-THAN-STELLAR SERVICE OVER THE YEARS.
Spirit has campaigned diligently to combat the stigma of flying cheap means dealing with rudeness. Nonetheless, there are many reports online — like this one from Inside Edition — that reinforce that perception.
@insideedition Shocking video shows a Spirit Airlines gate agent’s meltdown at the #HollywoodBurbank #airport. The agent lost her cool after passengers questioned why they were delayed boarding their flight. A second gate agent tried to keep everyone calm but things quickly escalated. #SpiritAirlines tells Inside Edition the two agents were suspended, stating, “We apologize to our guests for this experience, which does not reflect Spirit’s high standards for guest service.”
♬ original sound – Inside Edition
There is no way to measure how much or if this contributed to Spirit Airlines’ bankruptcy, but it didn’t help.
After all, kindness is free and customer retention is invaluable.
Spirit Nickel-and-Dimed Its Customers
As we mentioned, Spirit Airlines rose to popularity for its extremely inexpensive airfares. In some cases, flight prices were as low as $40!
This begs the question: how could the airline afford to sell such low-cost tickets? Well, they did it by charging for anything and everything else aside from the seat…
Customers flying with the carrier were charged for amenities such as:
- Checking luggage
- Bringing a carry-on bag
- Selecting a seat
Considering that these things are usually included in other airlines’ tickets and Spirit’s shabbier planes…
It was a recipe for disaster. Further, they didn’t change how they operated as customer preferences shifted…
Spirit Airlines Paid No Attention to Market — Leading to Bankruptcy
Immediately after the COVID-19 pandemic, air travel saw a massive surge.
This should have been a positive for all air passenger carriers — Spirit included. There was just one problem…
NOW, TRAVELERS WANT TO FLY IN COMFORT AND STYLE. BEING THE MOST ECONOMICAL WAS NO LONGER THE PRIORITY.
Consumers were more interested in making up for lost time and were willing to pay for it. This put Spirit Airlines at a disadvantage as air travel opened up.
Before the bankruptcy announcement, Spirit attempted to create “bundles” for their customers. While this did not keep the airline from filing Chapter 11, it has not kept them on the ground…
Spirit Airlines Will Continue Operation Through Bankruptcy
After discussions with its shareholders, Spirit accessed $350 million in commitments to restructure.
Even with this olive branch in funds, the airline carries a debt load of over $1 billion through 2025 and 2026.
Hopefully, it’s not too late for the company can learn from its mistakes and take off into profitability…
Be Great,
GCTV Staff
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