If Everyone Hates Spirit Airlines, How Is It Making So Much Money? | Hacker News Reader

If Everyone Hates Spirit Airlines, How Is It Making So Much Money?

marker.medium.com

31 pointsALee54 comments

Because people purchasing airfare prioritize price over service.

Money quote: “Businesses that look at what people say,” [Ben Baldanza, Spirit CEO] argues, “don’t do as well as businesses that look at what people actually do.”

Sure, but often "it's so cheap" leads to brand satisfaction despite lousy quality. I know people who really like Walmart and Dollar Tree.

I know a lot of people who love Spirit. They find ways to avoid the fees and just want low prices

Southwest is often cheaper than United or AA for certain destinations (especially LAS and DEN) and I've yet to have a negative experience.

...and Google and Facebook. Even if they claim not to.

Absolutely, RyanAir is pretty much the most hated airline in Europe yet they are also the cheapest. I mean if you buy a ticket 2 weeks in advance, you can get a ticket from London to Paris for £9. Thats less than the price of a Pizza.

But at that cost, are they really making money? It seems that they'd be losing money if you don't get caught by one of their hidden fees.

Probably filling seats on unpopular routes that they would have to fly anyway. Perhaps in a similar situation to what's described in https://www.youtube.com/watch?v=X8XZriAdB1g , where an airline was flying empty planes to hold their slot at Heathrow.

Would they have to take a loss on the fuel?

Sure, but that pales compared to losing a juicy timeslot on the runway.

Some of those literally sell for 8 figures. You can run a lot of empty flights at that rate.

The other thing is they charge. for. every. single. thing... Want a carry on? Pick a seat? The price for these types of airlines have just about every nicety set up as a DLC, if you will. The base line ticket is cheap. Once you get all the extras, things are closer. When folks search for price - they get the raw price.

> The price for these types of airlines have just about every nicety set up as a DLC, if you will

DLC? Not really. It's literally not something you download. Microtransactions is a more apt term.

Additional weight adds fuel costs.

Modern aircraft are extremely fuel efficient. Per passenger seat a Boeing 737 MAX 9 gets up to 103 mpg including the weight of the aircraft, fuel, and cargo when fully loaded. On top of this skin drag, interference drag etc is independent of weight, further reducing the impact of a single passenger.

The difference of a single passenger on a fairly short flight is likely less than a gallon of fuel.

PS: https://en.wikipedia.org/wiki/Parasitic_drag vs https://en.wikipedia.org/wiki/Lift-induced_drag

Do they sell unlimited tickets at that price, or is like Megabus where the first person might get a $1 ticket but the price goes up as more are sold?

There's probably a lot of business in people checking Ryanair's website thinking "Maybe I can get a £9 ticket" and ending up with "£65 is still pretty good."

That's probably one of the main reasons: to be able to announce such low prices, even if at extremely limited quantities

This. Did not need to read article.

Yup, compare Google and ddg, or Facebook and every decentralized network.

I had a business partner years ago that was light years better than me. And I think this sentence might just sum it up.

I love spirit. If I can save $50 on a flight that would normally cost $200, that means I can visit my girlfriend 4 times instead of 3 for the same price. I'm not particularly tall so there's no change in comfort for me. I wish they had more routes though, been handing a good percentage of my annual salary to delta.

I'm assuming you travel super light, then?

Because Spirit's baggage fees are so high that it'll more than make up the difference in ticket prices. One reason why I prefer Southwest so much is because I can get both my carry-ons and two checked bags with the ticket price... which is still lower than any of the legacy carriers.

(which is a reason why I'm going to be so upset when the MAX is put back in service and I won't be able to fly Southwest anymore)

What are you really doing with two carry-ons and two checked bags?

If I'm staying for less than 4 days I can fit everything I need in one backpack. With a backpack and a carry-on I can bring everything I'd want for weeks.

For me, it breaks down like this:

* My purse counts as a carryon. I don't go anywhere without it.

* My other carryon is my backpack, which contains my electronics. I have my Surface, my headphones (which are very large padded cup models... I have sensitive ears and can't wear earbuds or small hard things), and a variety of chargers and spare batteries. I intend to use at least some of these on the flight itself. And I also stuff the side pockets with snacks for me to munch on during the flight (usually red/yellow stuffed Twizzlers).

* I have a suitcase for my clothing. I don't really like wearing the same clothes every day, so yes I pack multiple changes of clothes.

* I have a duffel bag for all my toiletries. Makeup, shampoo & conditioner, hand cream (I tend to travel in late fall/winter, and the cold fucks up the skin on the backs of my hands for some reason), shaving equipment, pads, flat iron, etc. Some of these can't go into a carryon because of bullshit TSA rules.

And on one of the trips I made last year, I also brought a number of toys for my niece and nephews (three kids, two toys for each kid, and not all of them were terribly small), which I had to basically play Tetris with to get them to fit in my luggage. I think they ended up being distributed between my backpack, suitcase, and duffel bag.

I usually fit in a backpack.

* Eight shirts (4 undershirts, 4 overshirts)

* 4 boxer-briefs

* 4 pairs of socks

* 1 toiletry kit

* 1 laptop or tablet depending on the nature of the trip

* 1 phone charger

* 1 tablet/laptop charger

* 1 medium sized book for the plane/airport

On my person I carry a wallet, car/house keys, airpods, and cellphone.

(which is a reason why I'm going to be so upset when the MAX is put back in service and I won't be able to fly Southwest anymore)

It that on principle, or fear of safety?

Most times I have flown spirit I got upgrades including bags dirt cheap. But even when I don't, they are still a pretty good price.

As for southwest, it depends on timing. They are cheap early on when major carriers are asking standard prices. Then as you get closer, southwest cheap seats fill up while major carriers start cutting prices, sometimes drastically if it turns out to be a bad travel season.

Traveling with four bags is too much of a pain even when it's free to bring them.

Because of low income people who need to get places and are used to being treated poorly. Sometimes you have no choice.

Spirit has been mostly fine but you should price in the cost of eventually getting stranded by them in the flight cost. I've flown them at least a dozen times and been stranded once where the next flight would be 4 days later so I had to suck it up and buy a flight back on Southwest.

Well, here are the key bits:

> Branding experts are forever telling us that this scenario simply isn’t possible; eventually a negative popular image will crush your business. If that’s the case, how do we explain Spirit?

> Sure, there were lots of complaints, but Spirit consistently delivered on its low-cost promise, and that’s why customers kept coming. “Businesses that look at what people say,” he argues, “don’t do as well as businesses that look at what people actually do.”

As for why Spirit is an easy punch-line, I think a lot of it is the name. There’s not much to go on with American Airlines, Delta, Southwest, United, etc., but Spirit sets up such a contrast between the name (noble, eternal, incorporeal!) and the experience (no-frills, optimized for cost, and extremely corporeal!). It’s nice irony.

What a senseless question. You could ask the same thing about Walmart or dollar stores, or why most people watch YouTube with ads. Just because I feel it's the best move to save money by using your services doesn't mean I don't also feel your service sucks.

If it’s unnecessary and you consume it (YouTube with ads), doesn’t this imply that it doesn’t suck?

Dollar Store, sure, sometimes people need to buy cheap food. But using YouTube is optional.

> But using YouTube is optional.

No, for a lot of people, Youtube is the new TV.

Congrats to Google on a great investment.

> If it’s unnecessary and you consume it (YouTube with ads), doesn’t this imply that it doesn’t suck?

in the common parlance, it is possible for something to "suck" and still be a good value. in my opinion, the experience of shopping at walmart sucks. I have a hard time finding things, I have a hard time finding employees to help me find things, and the thing itself is usually of poor quality. and when it's time to pay, I'll probably be waiting for one of the two cashiers to ring up two full carts worth of items for the person in front of me. as much as I hate it, I still go there if I need to buy a bunch of stuff where I don't care about quality.

if something is free, it only needs to provide an infinitesimal amount of positive utility to be a good value. I also hate google play music, but it's the best of several bad options to play music for free in my car.

Is leisure travel necessary?

People HATE that they have to pay for every additional service, but LOVE the original low (and overall lower) price.

When they travel only nickel-and-diming is visible.

But then, when they plan a new trip, they remember that overall it was not so bad and apparently decide it was worth it.

There is a fix for this. Charge the max services fee on top of ticket price and credit back for services not used. Didn’t bring a check-in? Here is $50. Not gonna eat? Keep this $20. Suddenly now they are not nickel-and-diming. They are handing out money.

I'm not sure the psychology works out that way. price sensitive customers probably don't want to let you hold onto an extra $75 of their cash from the time they make the reservation until they actually fly.

Time value of money of a $200 plane ticket at federal funds rate (for half a year) is like what, $1.5?

it's not about the lost opportunity to make an investment so much as tightening the margin for stuff like paying rent, utilities, and credit card bills. $75 isn't enough to make or break my budget, but it's still a lot to have tied up over a service I'm planning not to use. if you're the type of person to aggressively optimize travel for price, it could be a meaningful sum.

Plus it is well established that we are less price-sensitive once the money left our pocket.

Most people would end up using more services. Hence even instinctively feels like a much worse deal even if tying up that money would not impact them directly.

You are thinking about this backwards.

What people love is that the initial price is LOW. They all hope that this will be the final cost. They don't even want to think about paying more.

Getting refunds stinks, frankly. All it takes is a single hiccup to turn into a PR nightmare: "Old lady getting kicked out of her apartment because the airline did not process the refund in time."

My most recent Spirit flight was $200 cheaper than any other airline. I have a bag that's the exact personal item dimensions, and generally pack very light as it is, so the restrictions don't affect me at all. And honestly, I think largely because no one can recline, the seats are not that uncomfortable. I've been on more uncomfortable British Airways flights (they still fly some extremely old 747s on their North American routes).

So I save $200 to be slightly more uncomfortable for 2 hours, on a piece of my journey that simply has to happen. No one flies just for fun, people have somewhere they're trying to be.

> And honestly, I think largely because no one can recline, the seats are not that uncomfortable.

This. As far as I'm concerned, non-reclinable seats in economy are a FEATURE: I lose more comfort from the seat in front of me reclining, than I gain from my seat reclining.

A key thing to keep in mind with air travel customers is that it's nigh-impossible to effectively search and filter on anything past price and maybe number of free bags. Thus, you get people buying seats with no leg room... because travel search sites lump everything together, and without researching every single flight in the list, there's no way to actually see how much leg room there is in advance.

There's no guarantee for the type of aircraft that will service your flight. You can check the schedule, but an Ops team may switch out if any operational exception (bad weather, equipment malfunction) occurs.

So you fly spirit once, just once basically. You understand very quickly what you're getting, and don't fly it again unless price is your #1 concern.

For the vast majority of people flying, price is #1. Several hundred dollars is not an "extra" expense that most of americans can easily afford.

Because noone wants to pay. We are still flying the same speed as we did fifty years ago. Imagine for a second that you could fly from London to Sydney in ten hours (that's the Concorde speed on a route over Panama City so that almost all of the flight is over a sea to avoid any problems with sonic booms) but a ticket would be 15 000 dollars. Noone developed that plane.

Its not like a lot of airlines have good reputations flying out of the same places as Spirit. For a certain type of travel (one carryon, not super long flight), its actually ok. They suck but the lower price compensates for the difference in suck between them and some of the others.

They're the burner phone of airlines.

I'd take spirit on a short trip where I need only a small carry on. I just don't generally need flights that fit that scenario, especially on the east coast where I prefer the comfort and ease of Amtrak. I hate airports.

I wish this country had high speed rail.

If your small carry on is larger than 18x14x8 inches, it's an additional ~$35 to ~$60, depending on when/where you pay. This is how they make their money.

Even with this rule, it is generally cheaper than commercial flights from other carriers, except (in my experience) for extremely low price United flights that have the same stipulation.

Oh, yes...should have mentioned the 28" seat pitch. That's the other way they make money. Other airlines have 30"-32" in their economy seats.

This can’t be a significant factor. The seats per plane allowed by pitch difference is about 11% (at maximum using 28" vs 32") seats in a two-aisle plane.

Spirit base fares are often less than half what a United or even Southwest are charging for same route.

11% more seats is a pretty big deal in a low margin business.

Comparing base fares is hard when the product is so different, and Spirit isn't uniformly half the cost either. Say it's uniformly 20 to 30 percent lower. Seat pitch and bag fees (carry-on/checked) might account for most of that. Also see things like refundability.

Because "Everyone hates Spirit Airlines" obviously isn't true, despite the impression the author may have gotten from mass media and social media, neither of which are representative of the full population.

If you have a gut feeling ('everybody hates Spirit') and hard facts ('Spirit is profitable and has loads of customers') that seem to contradict each other, maybe just maybe you should consider the possibility that your gut feeling is just flat wrong.

Reply on news.ycombinator.com