Can Spirit Shed Its Budget Image? Inside Its High-Value Makeover

Spirit Airlines, once recognized for its bare-bones service and low fares, is emerging from bankruptcy with a strategy to attract more affluent travelers by offering mid-air luxuries.

The ultra-low-cost carrier aims to appeal to wealthier customers, believing this approach will increase its revenue per passenger by 13 percent and help reverse years of financial losses.

Spirit filed for Chapter 11 bankruptcy protection in November after losing more than $2.5 billion since 2020 and facing debt payments of more than $1 billion. The Fort Lauderdale-based airline struggled to reconnect with travelers after the pandemic.

Photo: Spirit Airlines, Airbus A320neo. Courtesy of Spirit Airlines.

Its bare-bones offerings lost appeal for passengers with new expectations for better service, while the most budget-conscious travelers postponed vacations as they felt the bite of inflation.

Now, Spirit is betting it can shake off its spartan reputation and win over travelers willing to spend a bit more.

“Today, we’re moving forward with our strategy to redefine low-fare travel with our new, high-value travel options,” continuing CEO Ted Christie said in a letter to investors last week.

Bundles and Business Class style “Go Big”

Spirit began this re-brand last summer, when it scrapped its long-term pricing structure of selling eye-catching, cheap base fares and then charging travelers for every extra, from seating assignments to baggage to printing boarding passes at the airport.

The carrier replaced this model with four fare bundles—Go, Go Savvy, Go Comfy, and Go Big— offering a sliding scale of perks.

Photo: Courtesy of Spirit Airlines

Go Big, the most expensive, approximates business class on other airlines, with priority check-in and boarding; the “Big Front Seat,” a wider seat with extra leg room at the front of the plane; free carry-on and checked bags; and complimentary drinks, snacks, and Wi-Fi.

The late summer launch of the fare bundles wasn’t enough to postpone Spirit’s slide into bankruptcy, but the airline is now doubling down. Its reorganization plan previously promised to offer water and snacks to all travelers and free Wi-Fi to frequent flyers, as well as to launch more codeshares with partner airlines, optimize its network, and operate more lower frequency flights.

Photo: Courtesy of Spirit Airlines

Christie said the airline is now “in a stronger financial position to continue our transformation and investments in the guest experience.”

Emerging into a tough market

During bankruptcy, Spirit snubbed a $2.16 billion merger offer from competitor Frontier Airlines, saying that restructuring would offer a better deal for shareholders.

Photo: Courtesy of Justin Sullivan/Getty Images

The restructuring plan, approved by a judge in the U.S. Bankruptcy Court for the Southern District of New York in February, has reduced Spirit’s debt by converting $795 million in debt into equity.

The airline also received a $350 million injection from existing investors to support its rebrand and says it plans to re-list its shares on a stock exchange.

But will that extra investment in a higher class of service pay off? Spirit hasn’t chosen an auspicious time to re-position itself in the market. Travel demand has slumped as consumers and businesses brace for the impact of Trump’s economic policies, and government spending has been slashed.

Photo: Courtesy of San Diego International Airport

Major carriers Delta, United, American, and Southwest have all downgraded their revenue predictions for the first quarter of the year, and some have already cut capacity, preparing for a tough summer.

One group likely to benefit from Trump’s economic shakeup and tax cuts is wealthier Americans. But will they be willing to spend their extra cash with Spirit, whose yellow-liveried planes are so associated with bargain basement travel? The company will have to work hard to shed that discount image.