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Spirit Airlines Is Feeling Pressure From the Major Carriers' Basic Economy Fares

Feb. 10, 2017
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2 min read
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Spirit Airlines Is Feeling Pressure From the Major Carriers' Basic Economy Fares
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With the launch of basic economy fares from all three legacy carriers in the US, Spirit Airlines says it's starting to feel the pinch of increased competition in the low-cost segment. The comments about the growth of basic economy fares came during the carrier's quarterly financial reports call.

Skift reports that during the call, Spirit's chief executive Robert Fornaro spoke to the increase of the bare-bones airfares and their effect on the company's business model. Prior to 2015, Spirit and low-cost competitor Frontier Airlines were the only airlines offering discounted fares across the United States in exchange for reduced benefits. However, as American, Delta and United expanded their offerings to include discounted economy fare options, consumers now have more choices in which carrier they fly with at their preferred price point.

Although each of the legacy airlines will begin offering their own versions of basic economy in 2017, the timing and application will vary. Delta is offering basic economy on select routes, while United Airlines will begin its basic economy rollout in Minneapolis. American Airlines announced it would begin introducing basic economy fares in 10 locations across the country, before expanding it to other routes throughout the year.

Spirit's amenities line up closely with those offered with American and United basic fares: Travelers are allowed only one personal item free of charge, with the option to purchase upgrades online or face higher charges at the airport. Although Delta is slightly more generous, allowing basic economy passengers to carry on two items — one for the overhead bin — Fornaro told investors that the airline is competitive with Delta in the markets where they compete, including Atlanta.

Despite the new basic economy competition, Spirit is continuing with its plans to grow in the coming year. The airline will launch 16 new route combinations between March and June 2017, including several out of Baltimore. In addition, the carrier will also continue to move forward with plans to add 15 aircraft (caution: PDF link) to its fleet.

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  • Packed with credits foodies will enjoy
  • Solid welcome bonus

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  • Some may have trouble using Uber and other dining credits
  • You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
  • Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
  • Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
  • Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
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  • $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
  • $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
  • Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
  • No Foreign Transaction Fees.
  • Annual Fee is $325.
  • Terms Apply.