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NerdWallet Study: Spirit Airlines Collected $142 million in Passenger Usage Fees

nerdwallet FEE SPIRIT? Spirit Airlines is notorious for charging fees. The ultra-low-cost carrier has been an innovator in the airline industry and was the first to charge for carry-on baggage. In light of the class action lawsuit filed against Spirit for its Passenger Usage Fee, NerdWallet provides a break down of Spirit's non-ticket fees and explains the history behind them. NON-TICKET REVENUE PER PASSENGER FLIGHT SEGMENT $51.57 $44.79 $35.00 $25.91 $18.61 $10.96 $4.80 2006 2007 2008 2009 2010 2011 2012 NON-TICKET REVENUE $59.2 million 2008 2009 $63.2 million 2010 $91.4 million 2011 O $168.3 million = $10 MILLION $2.3 million 2008 O $20.6 million 2009 $47.4 million 2010 1 $71.8 million 2011 = $10 MILLION $11 million 2008 2009 $18.8 million 2010 $32.5 million $42.1 million 2011 = $10 MILLION I $21.5 million 2008 2009 O I $23.5 million 2010 I $23.1 million II $25.9 million 2011 = $10 MILLION TIMELINE OF SPIRIT 2006 Spirit adopts a ultra low cost carrier model, focusing on low fares 2007- Spirit begins unbundling services (i.e. baggage check, food service, etc.) from airfares and begins charging passengers extra fees 2008• Spirit introduced advance seat selection fees, onboard advertising, and online advertising Spirit officially introduced its passenger usage fee 2009· to "cover sales distribution transaction costs" Spirit introduced its priority boarding fee and began selling airport parking in advance of travel Department of Transportation fines Spirit $375,000 for its deceptive passenger usage fee 2010• Spirit introduced phone booking fees and fees for booking through third party vendors Spirit introduced preferred seating fees for bulk head seats Pilots declared a strike, and Spirit was forced to suspend all flight operations for 5 days Spirit introduced carry-on bag fees 2011. Spirit reduced the threshold for overweight bags, increasing the weight range of bags subject to additional fees Spirit increased its ticket change/cancellation fee Spirit increased its checked bag fees (online at check-in and at the airport Spirit increased its passenger usage fee 2012. Spirit introduced its D0TUC (Department of Transportation Unintended Consequences) fee in reaction to DoT regulation Sources: Company SEC filings nerdwallet CHANGE FEES ADVANCE SEAT SELECTION PASSENGER USAGE FEE BAGGAGE

NerdWallet Study: Spirit Airlines Collected $142 million in Passenger Usage Fees

shared by annie630 on Aug 13
Fees have clearly been a driver in Spirit’s profitability. Spirit, along with many other airlines, has focused heavily on revenues from fees because they return higher profit margins. In recent year...



Elain Ng


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