Spirit Airlines Scraps Change and Cancellation Fees

Following a similar move by Frontier Airlines, Spirit Airlines recently announced the immediate elimination of change and cancellation fees. This decision denotes a crucial shift in the strategy of major discount carriers, which traditionally relied on such fees for revenue.

Previously, Spirit charged customers between $69 and $119 for ticket changes and cancellations, depending on a few factors. The new policy aims to simplify the travel experience for all passengers. "This new policy is among the best in the industry because it applies to each and every guest," Spirit stated to CNBC. The airline also hinted at more enhancements to its services soon.

This move is part of a broader strategy shift among budget airlines, which have historically offered low base fares. They supplemented these fares with additional charges for various services like seat selection, bottled water, and cabin baggage. These additional fees often exceeded the base ticket prices and contributed significantly to the airlines' revenue.

Spirit's Chief Commercial Officer, Matt Klein, emphasized the need to adapt to changing market conditions. "As we continue to see the demand and competitive environments develop, we know that we must also change with the times," Klein noted during an earnings call. He added that the airline plans to experiment with new merchandising strategies to boost overall revenue.

In addition to eliminating change fees, Spirit is also introducing bundled packages that offer perks such as checked bags. 

This shift follows the Biden administration's earlier push for more transparency on add-on fees. However, Spirit clarified that their new policy isn't directly linked to these regulatory changes. The policy aims to improve customer satisfaction and streamline the travel process.