Spirit Airlines expects its low-cost model to fare better than competitors after reporting a $99.1 million net loss in the third quarter

Domestic travel is rebounding in the US, and low-cost carrier Spirit Airlines is counting on price-conscious travellers and ancillary revenue to lead it to profitability. In the three months ending September 30, passenger revenues tumbled by 59 per cent year-on-year to $392.7 million. However, compared to the same time last year, non-fare revenue contributed to the majority of passenger revenues, accounting for 58 per cent, up from 49 per cent. Overall, Spirit’s decline in revenue is less than mainline U.S. carriers such as United Airlines, which reported drops as much as 78 per cent year-on-year.

On a per passenger flight segment basis, fare revenue declined 35.1 per cent to $35.5 while non-fare revenue dipped by 7.2 per cent to $51.3. Spirit Airlines charges for everything from seat selection to carry-on baggage to printing a boarding pass at the airport counter.

“While the pandemic continues to affect demand for air travel, we do not believe it changes our competitive position. Our excellent operational performance, strong guest satisfaction metrics, and industry-leading cost structure, position us well to be among the first to reach sustained profitability,” said Ted Christie, President and CEO, Spirit Airlines.

The airline also expects to relaunch its loyalty programme, Free Spirit, in January 2021. Customers will be able to benefit from elite status perks as well as earn points on fares and ancillary purchases, a shift from the distance-based model it previously applied.