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New York Post
Spirit soars after unveiling premium seating plan, joining rival Southwest
By Reuters,
7 hours ago
Spirit Airlines unveiled plans on Tuesday to tap into a growing demand for premium travel as the no-frills carrier chases high-margin revenue to mitigate cost pressures and boost its earnings .
The Florida-based ultra-low-cost carrier will offer intra-Europe style business class seats with a guaranteed blocked middle seat. The seating option includes one carry-on bag, one checked bag, priority boarding, and a snack and non-alcoholic beverage.
The airline has been losing money despite booming travel demand, raising questions about its ability to manage debt that is due to mature in 2025 and 2026.
The airline has been losing money despite booming travel demand, raising questions about its ability to manage debt that is due to mature in 2025 and 2026. Getty Images
Its shares have fallen 81% this year. They were, however, up 4.5% at $3 on Tuesday.
Spirit’s move comes months after rival Frontier Airlines launched a similar product. Both the carriers need new revenue streams to drive up earnings.
The product, however, marks a shift away from their traditional business model which offers a no-frills experience at rock-bottom fares and charges heavily for ancillary services.
A greater willingness on the part of air travelers to pay up for more comfort and a better experience has prompted US carriers to find ways to attract them.
While travel demand remains strong, an excess supply of airline seats in the domestic market has dampened airfares, making it harder for carriers to mitigate a run-up in labor and other operating costs.
It said there will be four new travel options, including plans for priority check-in, seats with extra leg-room and online streaming access through in-flight Wi-Fi services.
Spirit, which reports earnings on Aug. 1, did not provide revenue estimates from its new product offerings. The airline is expected to post an adjusted loss of $1.36 per share in the second quarter, according to LSEG data.
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