Here’s How Spirit Airlines Will Increase Its Revenues
Photo Credit: Spirit Airlines wants to be more sophisticated in how it levies its fees. Spirit Airlines
Skift Take
When fuel was expensive, Spirit was one of the industry's top performers. But cheaper oil has not been helpful to the carrier, so now it must get smarter.
In an effort to boost revenues, Spirit Airlines plans to implement a more sophisticated process to vary the cost of extras, such as advanced seat assignments and bag fees, while it also expands into smaller cities that have less competition, executives said Friday.
Unlike most U.S. carriers, Spirit has been slightly hurt by declining oil prices, since cheap fuel has allowed competitors, especially American Airlines and Southwest Airlines, to more often match or even beat, Spirit's fares. Spirit has considerably lower fixed costs than larger airlines, but when fuel prices drop, the advantage becomes less pronounced as all carriers pay roughly the same amount for fuel.
"Higher oil, we think, quite frankly will be better for us," Spirit CEO Bob Fornaro said.
