If you subscribe to the view that bad publicity is better
than no publicity at all, then you would probably say that last week was great
for Spirit Airlines. The air carrier raised eyebrows not once, but twice in a
few days’ time. First, Spirit announced new fees for checked baggage that could
result in a passenger paying as much as $100 per bag. While the typical rate
paid would more likely be on the order of $35-$45, the fact that a $100 fee is
on the books outraged many fliers, even people who do not fly Spirit.
Second, Spirit was at the center of a controversy with a
dying Marine who requested a fare refund after he was told by doctors not to
fly because he was too sick. Spirit initially rejected the request and made a
very public case that its policy prevented a refund from being issued. The
company eventually relented and issued a refund and made a donation to a
veteran’s charity, but not before the public railed against Spirit’s
The pricing, customer service, and PR tactics displayed by
Spirit Airlines lead many to question how the company stays in business. The
answer is simple: In many industries, there is a space for a low-priced, no
frills seller. Spirit occupies that space in the airline industry. Its model is
to offer low base fares and unbundle virtually all services associated with air
travel and charge separately for them. There is actually an advantage to
consumers for this à la carte pricing approach in that you only have to pay for
services you want. Most airlines use some form of this pricing approach; Spirit
has taken it to the extreme.
Many people are incredulous at the lack of concern some of
Spirit’s actions project. Spirit’s practices are far from textbook examples of
good customer service. There is good news for those of us who do not like the
brand values displayed by Spirit Airlines – we can use the power of our wallets
and fly with other carriers. It seems that executives at Spirit Airlines have
overlooked that customer value is determined by more than benefits received for
the price paid. Many people factor in a company’s reputation and commitment to concern
for customers, employees, and society in general when making buying decisions.
Spirit Airlines will continue to serve a customer niche that finds the company’s
value proposition palatable. But brands with true spirit aspire to go beyond
making money to making a difference.