I flew with Spirit Airlines from LaGuardia on April 28th. With the announcement just days after the carrier was closing, it felt a little like catching the last helicopter leaving Saigon. On the other hand, every time you flew, Spirit had the feeling of catching the last helicopter leaving Saigon. There were the impossibly small bags, people crammed into seats, and a pervasive feeling that the simmering confusion could at any moment explode into total calamity.
Like most people, I have always had a love/hate relationship with Spirit. Unlike most people, I once expressed it to the face of Ben Baldanza, the former CEO of Spirit.
In 2015, I wrote an essay for The new republic with the subtitle “A business school professor studies the worst airline in the world.” Within an hour of appearing online, the CEO of said airline emailed me to propose a discussion. We met a few weeks later on the downtown campus of the University of Chicago Booth School of Business, where I still teach business ethics, and before a large crowd that included its executive team, we debated the moral hygiene of Spirit’s unusual business practices.
By then, Baldanza had been the head of Spirit Airlines for nearly a decade, and was the driving force behind its transformation from a simple low-cost airline, like Southwest or Jet Blue, to an ultra-low-cost airline. The distinction between them revolves around relative deprivation. No one will ever confuse Jet Blue’s cabin with that of a Learjet, but at least in 2015, traveling on both planes meant choosing seats, carrying suitcases on board, and eating snacks.
Not spirit. At least not free.
The ‘naked rate’
Spirit pioneered a la carte pricing in American air travel with the introduction of what it called “base fare.” When you purchased a ticket to fly on Spirit, you received no snacks, no seat choice, and (heaven forbid) carry-on luggage. These were privileges. You had to pay for them. You have a seat. Period.
Baldanza advertised this invention as a cost-saving strategy for customers. “All of our differences are about saving our customers money,” he argued in our discussion, a statement that seemed more like rhetorical sleight of hand than an accurate description of the carrier’s practices. Yes, Spirit could usually get you from one place to another cheaper than other airlines, but to buy what Ben was selling, you had to assume a different understanding of air travel. Sitting with his kids, packing more than one set of crates, and eating peanuts was part of what it meant to fly. Yes, flying was the essential part of flying, but eating is also the essential part of eating, and if a waiter tries to sell you a knife and fork in a restaurant, you will still feel the need to tell him to put his frittata where the sun doesn’t shine.
In 2015, it didn’t look like Spirit was selling air travel tickets, not in any way that didn’t seem ridiculous. In fact, I argued in our debate that Baldanza had effectively bet his company’s future on the idea that Spirit could change the usual expectations around flying, that it could make the “base fare” seem less like a simple fee and more like a legitimate basis for air travel.
‘Eccentric, opaque or simply indecipherable’
But that was only half of Spirit’s innovative approach; in fact, the better half. Hand in hand with these changes it seemed like a sustained effort to stay one step ahead of customers who were trying to figure out exactly what was going on. The previous fall, I had flown with Spirit a dozen times between New York and Chicago, and in all the time I spent understanding the company, its charges still seemed incredibly confusing or, as I put it more pungently in my opening comments to the debate, the company seemed stubbornly committed to being “eccentric, opaque, or simply indecipherable.” At the time, Spirit had five price points for a carry-on bag, depending on when you decided to purchase that privilege, and its website often made it seem like you had no choice but to pay for certain options, like seat selection, by making the opt-out selection the font size of an eye exam.
More importantly, Spirit seemed to benefit greatly from this confusion. In the years before our debate, more than 40% of Spirit’s revenue came from ticket sales (in other words, passengers paying for the same things they would otherwise get for free) and let’s just say that, in my experience, it was not unusual to see a young traveler burst into tears when she discovered at the gate that her carry-on bag was going to cost her $100.
Collectively, by October 2014, such practices had made Spirit, according to Morgan Stanley analysts, the “most profitable airline in the world.” Two months later, the stock price hit an all-time high of $85.35.
Oh, how things change.
Baldanza, who died in 2024, was ousted from Spirit in January 2016, less than a year after our debate. The share price had fallen to $40, but there was also a feeling that some of Spirit’s antics had gone too far. The a la carte pricing approach would remain, along with rows of seats that were (literally) narrower than pews on a Roman slave galley, but the airline softened its salacious approach to marketing (Strippermobiles, anyone?) and undertook sincere efforts to make its alarming array of surcharges, if not necessarily consumer-friendly, much less confusing.
However, it also benefited from a change in basic expectations among passengers. The travelers learned to wait less, not only or even primarily because the Spirit made them cry. uncle, but because all the other carriers have followed his example. Today, all major domestic airlines have adopted some version of Spirit’s a la carte model for their “Basic Economy” class. United does not give you carry-on luggage. American won’t let you choose your seats. And if you buy a ticket on Delta, the airline announced in December that you don’t earn airline miles.
And where did those changes leave the Spirit? Victim of his own success. All of these companies are now doing more or less what Spirit has done, but without the galley slaves and stigma of being pioneers in degrading domestic air travel.
This will be the lasting legacy of Spirit Airlines. It sparked a race to the bottom, a race that made air travel a little cheaper, perhaps, but also a lot more miserable. Now it is bankrupt and we are all poorer for it.