Spirit Airlines Gets Boost From Dynamic Pricing on Carry-Ons to Bottled Water
Skift Take
Almost everything is improving at Spirit Airlines. Its on-time performance is getting better, and customer satisfaction is rising, according to the airline. More importantly for investors, ancillary revenue is up. Can the good times last?
Spirit Airlines charges extra for nearly everything, including carry-on bags and onboard water, so it can keep base fares low and still produce profits Wall Street wants to see.
To the outsider, it seems like a highly profitable strategy. But in the past three years, something surprising happened. The discount airline's ancillary revenues, measured per passenger, plateaued, leading some analysts to express concern. Would they ever recover?
On Wednesday, Spirit executives reported they had, crediting a multi-year strategy to boost what they call non-ticket revenue.
For the year, Spirit told investors it made more than $55 in per-passenger ancillary revenue for the first time since 2014. The fourth quarter was better, with non-ticket revenue increasing 5.2 percent, year-over-year, to $56.70.
The growth generally is not the r
