Spirit Successfully Pulls Off a "Ryanair" in the US

According to the  WSJ, (download pdf here: Download Spirit) Spirit Airlines, the ultra-low-cost carrier that derives its inspiration from Ryanair in Europe, is now the most profitable airline in the U.S. (on a per-plane basis). In fact, Spirit's market valuation is nearly the same as that of US Airways, an airline that is nine times the size of Spirit! How does Spirit achieve this? A combination of low costs + high fees!

Over 30% of Spirit's revenue comes in from fees for baggage and other services (even water is not served for free aboard Spirit), compared to 6% on average for the industry.  In fact, Spirit recently announced that it would start charging $100 for a gate-checked carry-on bag (you read that right!). I would think that initiative would probably help them by providing an incentive for passengers to pay the check-in bag fee early, and thus avoid having to gate-check their bags, which would end up speeding up the boarding process, and reducing turnaround times for their aircraft.

PS: I made the mistake of flying them once - never again!

Image courtesy: www.politicalcartoons.com

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