Case Study: The Spirit Airlines Business Model

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From a fiscal perspective he early stages of the new millennium brought about hard times for the commercial aviation industry. A multitude of factors in the early 2000s brought about a decline in the financial performance of many airlines throughout the industry. Some of these factors include aspects such as the events of September 11th, stock market struggles, and the Severe Acute Respiratory Syndrome (SARS) virus, among others (Swelbar, 2009). An additional cause of such a decline was the rise of low-cost carriers, such as Spirit Airlines (Swelbar, 2009). Although their business model did not make them exempt from the economic struggles of the end of the decade for the entire nation, Spirit has managed to find a large amount of financial …show more content…
The Spirit Airlines business model is one that emphasizes to the consumer that they pay for only what they need. Prospective travelers are faced with decisions regarding their in-flight spending experience. Potential fees range from paying for a boarding pass, a fee that can be avoided if one prints at home, to the numerous fees regarding baggage and in-flight food & beverages (Spirit Airlines, 2014). Their current marketing strategy includes promoting the “Bare Fare” in which a traveler pays for their discounted ticket that includes just one carry-on item in the price (Spirit Airlines, 2014). In short, each traveler is required to pay for each individual aspect of their travel experience, in addition to their ticket, leaving the individual to decide what is crucial to their flight …show more content…
In the first quarter of the year, Spirit earned nearly $38 million, which was a great deal more than projected and came despite an increased amount of weather-related cancellations (Bachman, 2014). The $438 million that Spirit Airlines experienced in sales during that first quarter represented an eighteen percent increase from the first quarter of the previous year (Bachman, 2014). Spirit’s business model is one that has led to tremendous success in a relatively short period of time. With plans to upgrade and expand their fleet in the coming years, as well as an expectation that new services to different locations, both domestic and international, will be reached in the very near future, the success should continue for

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