How did Spirit Airlines achieve the dubious distinction of becoming simultaneously North America’s most profitable and most disliked airline? That’s the question raised by a U.S. Public Interest Research Group study released last week showing that the budget carrier managed to generate three times as many passenger complaints to the Department of Transportation as any other U.S. airline in 2013. Even worse, Spirit has boasted a similar ratio for four of the last five years, all the while racking up the worst on-time rating for any North American airline. Yet despite earning opprobrium of comic-book proportions, Spirit has managed to post the highest operating margin and return on invested capital of any U.S. airline, according to a Bloomberg analysis.
It’s tempting to condemn Spirit for its crass ways, especially as compared to the legacy carriers. But the truth is that Spirit probably wouldn’t have been able to get away with its no-frills model if those same carriers hadn’t been lowering their own customer-comfort standards ever since the so-called Golden Age of Air Travel ended in deregulation. In Spirit, fliers suffer only a more extreme version of what’s been happening on Delta, United, and American for years. The only difference is that Spirit’s low fares and somewhat optional fees present economy fliers with the perception that they -– and not the airline -– are in control of what they pay.
Low prices, of course, are the key to bringing back passengers even when they hate themselves for giving in, and Spirit has mastered the art of cutting fares to the point where it competes with Greyhound. Then the carrier charges for everything from carry-on (as much as $50), water ($3), and even paper boarding passes ($10). That can be a problem. If you’ve bought a Sprit ticket without knowing about these charges and delays, you’re probably among the passengers who pushed Spirit to the top of PIRG’s most-complained-about list. At least, that's what Spirit seems to think, and it’s come up with a remedy: 2014 is the “Year of the Customer,” during which Spirit will educate passengers about how to “keep more money in their pocket” when flying … Spirit. In other words, come 2015 it’s your own fault -– not Spirit’s -- if you end up paying the carrier’s $2 “Unintended Consequence of DOT Regulations Charge.”
Whether or not Spirit’s education efforts are sincere, the truth is that profitability guarantees that Spirit could care less what its customers think. “While we want every customer to have a great experience,” a Spirit spokeswoman told the Minneapolis-based Star Tribune earlier this week. “Eight complaints per 100,000 enplanements is a pretty small number.” That’s not quite right: according to the PIRG report, Spirit passengers complained 9.44 times per 100,000 enplanements in 2013 (compared to .344 per 100,000 for Southwest). Meanwhile, between 2008 and 2013, the Department of Transportation fined the airline $565,000 for violating various consumer-protection laws. No doubt, the airline made that up in water sales to parched fliers.
Is this the future of U.S. economy flying? Spirit’s budget carrier status means that it’s always going to offer fewer frills than the legacy carriers. But it’s also worth recalling that Spirit charged for checked luggage a full year before the legacy carriers did, breaking what was then considered a customer taboo. In that sense, it’s not just the most complained-about airline in America; it might also be seen as the most innovative. Even if you don’t fly it, in a sense you already are.
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