Spirit Airlines drops change and cancellation fees, following Frontier’s lead

Spirit Airlines has announced that it is eliminating flight change and cancellation fees, effective immediately, addressing a common frustration among air travelers. This new policy arrives mere days after fellow low-cost carrier Frontier Airlines made a similar announcement, signaling an overall shift in strategy among budget airlines.

Previously, Spirit’s change and cancellation fees ranged from $69 to $119, depending on when the change was made and how close it was to the passenger’s departure date.

The elimination of change fees and shift toward more upfront pricing represents a departure from the traditional model of discount carriers. Such airlines typically attract customers with low base fares and then charge extra for services like checked or in-cabin baggage, advanced seat assignments, in-flight refreshments and more. It is fairly usual for revenue from these supplemental services to outstrip what’s generated by ticket costs.

“This new policy is among the best in the industry because it applies to each and every guest,” a Spirit spokesperson said in a statement given to CNBC. “We have many other enhancements in the works and look forward to sharing more soon.”

Frontier likewise eliminated its change fees last week, but went further by providing newly transparent pricing and package options that bundle such perks as early boarding and checked luggage – previously offered only a la carte – into the ticket price.

“As we continue to see the demand and competitive environments develop, we know that we must also change with the times,” Spirit’s Chief Commercial Officer, Matt Klein, said during an earnings call that occurred earlier this month. “We will continue to test out new merchandising strategies, which we anticipate will change how we think about the components of total revenue generation.”

Bigger network airlines – including Delta, United, American and Alaska – largely did away with change fees amid the pandemic when ticket flexibility became a key issue, except on the most basic, cheapest fares. Another major U.S. carrier, Southwest Airlines, did not charge change fees to begin with.Unlike larger airlines, both Spirit and Frontier continue to struggle toward renewed profitability postpandemic. In light of its failed merger with JetBlue and a $142 million net loss posted in the first quarter of 2024, Spirit has begun to reconsider its previous approach.

Spirit’s CEO, Ted Christie, told analysts during an earnings call, “We have been listening to our guests, and general airline passengers, and have been reviewing the competitive set of products in the industry,” the Points Guy reported. “It is clear we need to introduce some changes to reflect the new dynamics in the industry, and make Spirit a more compelling option for the traveling public.”