Low-cost airline Spirit Airlines has successfully exited bankruptcy, hitting its target of emerging in the first quarter. CEO Ted Christie attributes the carrier’s turnaround to becoming leaner and more competitive. This comes as rival Southwest Airlines starts charging for checked bags for the first time, a move that may leave customers seeking alternatives.
Southwest had long offered two free checked bags, but Spirit has employed a la carte pricing strategy, charging fees for seat assignments and other add-ons. Now, with Southwest’s shift in policy, Spirit sees an opportunity to win over customers who previously opted for the lower-cost carrier due to its generous baggage perk.
While Spirit is smaller than Southwest, it competes in key markets such as Kansas City, Nashville, Columbus, and Milwaukee. Christie suggests that Spirit’s tickets could be cheaper and appear higher on travel sites like Expedia, potentially attracting Southwest customers looking for more affordable options.
Other airline executives, including Delta Air Lines President Glen Hauenstein, expect to benefit from the shift, as consumers who previously chose Southwest based on its free bag perk are now up for grabs. Spirit has been focusing on returning to profitability after a crippling bankruptcy period, which included a net loss of over $1.2 billion in 2023.
As part of its restructuring process, Spirit reduced its debt by about $795 million and received a $350 million equity infusion. The carrier plans to relist its shares on a stock exchange but hasn’t set a date yet. With Spirit now out of bankruptcy, the low-cost airline is ready to take on competitors, including rival Southwest Airlines.
Source: https://www.cnbc.com/2025/03/13/spirit-airlines-ceo-on-new-southwest.html