- Spirit Airlines lowered its profit outlook, citing a decline in non-ticket revenue.
- That means things like baggage fees and seat selection, which can cost hundreds of dollars.
- United Airlines’ CEO criticized the ultra-low-cost airline business model in June, saying customers “hate it.”
Passengers are growing weary of Spirit Airlines’ extra fees, according to the airline’s latest financial report.
Spirit Airlines filed an 8-K on Tuesday warning of a decline in revenue for the second quarter of this year.
The airline now expects revenue to be $1.28 billion, down from its previous forecast of $1.34 billion. Spirit Airlines said this was “primarily due to lower than expected non-ticket revenue.”
Non-ticket revenue refers to all the ancillary revenues that form the backbone of low-cost airlines’ business model.
This includes in-flight snacks, extra charges for checked baggage and seat selection.
Spirit Airlines expects non-ticket revenue of $64 per passenger segment, “a few dollars lower than expected.”
Ultra-low-cost carriers like Spirit and Frontier have come under increased scrutiny recently. In June, United Airlines CEO Scott Kirby said on “The Air Show” podcast that the company was “going out of business” because its business model was flawed and “customers hated it.”
However, analysts at Deutsche Bank pointed to Spirit Airlines’ decision to eliminate most change and cancellation fees starting in May and to also increase checked baggage weight limits.
If you look at airline websites, you’ll see that seat prices vary widely.
Spirit Airlines says that while requesting a regular seat can cost anywhere between $1 and $200, the big front seats can cost as much as $900.
The cap would likely only apply in rare circumstances, but it still might not be worth the upgrade: In 2022, Business Insider’s Taylor Raines paid $35 for a big front seat on top of her $30 ticket fare.
Snacks and drinks range in price from $1 to $15.
The airline’s baggage fees vary, but Spirit Airlines’ online calculator didn’t show an error message until Wednesday morning. BI reported last month that Spirit Airlines charges $50 for a carry-on bag on flights between New York and Orlando.
Spirit Airlines blamed the revenue decline on “increasing pressure on ancillary service prices due to changes in the competitive marketplace” in a filing Tuesday.
Simply put, passengers are becoming less willing to spend money on frills.
Spirit Airlines did not immediately respond to Business Insider’s request for comment.
