Spirit Airlines Drops Change and Cancellation Fees in New Push for Profitability

Spirit Airlines is the latest ultra-low-cost carrier to drop change and cancellation fees. 

The carrier appeared to quietly remove most change and cancellation fees from its website during the weekend. Spirit said in a statement that it started implementing a new policy May 17. 

Now, Spirit doesn’t charge any change fees for any fare classes, except for group bookings. Before, the airline charged anywhere from $69 to $119 to change or cancel a reservation, depending on the number of days before a departure. 

A Spirit spokesperson said the new approach was part of a wider plan to enhance its products and policies.

“Spirit has been evaluating changes to our product and strategy that will help us better compete, elevate the guest experience and return to profitability,”  Spirit said in a statement.

Dropping change fees has become a more permanent trend in the industry. During the pandemic, the “Big Three” U.S. carriers — American Airlines, Delta Air Lines and United Airlines — scrapped change fees, except for the cheapest and most restrictive fares. Southwest is known for not charging any change fees. 

Spirit’s changes come as its biggest competitor, Frontier Airlines, got rid of most change fees last week as part of a major overhaul of its pricing structure. Frontier’s changes mimic those of a more traditional airline — with many of its fare classes bundle up ancillary services.

A Post-Pandemic Struggle

Since the pandemic, Spirit hasn’t been able to turn a profit. And while Frontier’s financial situation is a bit better, both ultra-low-cost carriers have struggled with an overcapacity in popular leisure markets and a softening in demand for their products.

Spirit’s path as a standalone carrier has been unclear since its merger with JetBlue collapsed. Executives hinted during a recent earnings call that Spirit may experiment with some changes to its business model to make it more competitive, but didn’t offer specifics.

“We will continue to test out new merchandising strategies, which we anticipate will change how we think about the components of total revenue generation,” said Spirit chief commercial officer Matt Klein in a May 6 call with analysts. 

Spirit CEO Ted Christie has also been critical about the current state of the industry and speculation on the carrier’s financial health. He called potential rumblings of a bankruptcy for Spirit a “misguided narrative,” and recently described the industry as a “rigged game.” 

The carrier has around $1.1 billion in debt set to mature September 2025 and has been trying to shore up its liquidity. Recently, Spirit deferred the delivery of its Airbus planes and furloughed hundreds of pilots to cut costs.

Amid Spirit’s changes, the Department of Transportation also rolled out a final rule that would require airlines to disclose all fees related to ancillary services. Last week, several major U.S. airlines filed a lawsuit against the Biden administration for the new rule, arguing it was a regulatory overreach that could confuse consumers.

Neither Spirit nor Frontier have attributed their changes in policy to the DOT rule.