Spirit Pushes Premium Pivot for Bankruptcy Exit

Spirit Airlines intends to emerge from bankruptcy this summer a very, very different airline than it once was. A big part of the plan: Betting on premium to drive its future revenues.

We are pleased to achieve another milestone that reflects the confidence our lenders and noteholders have in our future, with our plan better positioning Spirit to continue delivering value to American consumers.

– Dave Davis, President and Chief Executive Officer

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The fleet will continue to shrink. From a peak at its first filing of more than 200 aircraft, the carrier has rejected leases along the way to shedding 40% of its planes. The 125 it operates today will be further reduced by 20 it plans to sell next month, plus another ~25 disposed of, ultimately bringing the fleet to between 76-80 planes as it emerges from court protections.

Read more: Spirit Airlines pitches premium passenger push in product revamp

It will also continue to shrink its footprint. The right-sized Spirit will focus operations in four main markets:

• Detroit (DTW)
• Fort Lauderdale (FLL)
• New York City (LGA/EWR)
• Orlando (MCO)

Those are all well-contested markets, with multiple hub operations from competing airlines. And the split operation in New York likely won’t help things. But the four cities represent roughly 70% of the carrier’s operations today, so at least Spirit knows what it is up against.

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Expanding the Premium Play

Most notable in the plan is Spirit’s doubling down on the transition away from being a “pure” low cost carrier, focused primarily on keeping costs low and optimizing revenue via an unbundled pricing model. Instead, “Spirit intends to expand its Spirit First and Premium Economy products by adding a third row of the Big Front Seat® and continuing its rollout of Premium Economy seating, while continuing to lead the industry on price and focus on value.”

Read more: Legs Win Over Shoulders in Spirit Airlines Go Comfy Revamp

The presence of the big seats is not new. The company’s Big Front Seat product dates back to 2007. But it is now a very different product offering. In the past BFS passengers simply paid for more space on board. Bags, snacks, and everything else still cost extra. Today, however, Spirit First is much closer to a traditional premium offering. Snacks and drinks are now included. So is inflight Wi-Fi, a checked bag, priority boarding, and more.

Read more: Spirit Rebrands On-Board Options, Again

Similarly, the Premium Economy cabin (once briefly known as Go Comfy!) remains a bundled offering, including the bags and priority boarding, plus a smaller snack and beverage offering. Those seats – now extra legroom rather than a blocked middle seat – are a big part of the company’s push for increased revenue.

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Yet to be answered, however, is how the additional row of Big Front Seats will impact the overall seat count on board.

A company spokesperson shares, “We are still working through the details of our premium seating expansion, including specifics of the LOPA and roll out timeline, and expect to have more to share in the coming months.”

Most likely it will require dropping one row of economy, for a net loss of two seats total. And maybe losing the “up front” regular but still premium priced row at the front of economy, that isn’t part of the premium economy cabin. It also may require shaving a bit of legroom off all the premium economy rows to account for the extra Big Front Seat row.

Given the prime placement of this news in the release, and the associated value it is expected to bring to the bankruptcy exit plan, the lack of details is somewhat surprising.