Spirit Airlines Inc. is tossing out its bare-bones business model and trying to go upscale with fares that include extra leg room and free checked bags. Now comes the hard part: convincing Americans to pay for it. The carrier hired what it described as a “world recognized” advertising agency as well as a brand adviser to help it shed its reputation as one of America’s most disliked airlines. It’s a label that’s lingered for years, following a rash of complaints filed with US regulators. It’s gotten so bad that Spirit is now common fodder for late-night television. On a recent episode of The Tonight Show, host Jimmy Fallon acknowledged military members in the audience and then quipped: “When it comes to being on planes, the only braver people I know are the ones that keep flying Spirit Airlines.” Spirit’s ultra-discount strategy revolves around offering cheap fares while charging for items such as coffee, bottled water, carry-on bags and printed boarding passes. William Franke, the self-proclaimed father of ultra-discounting, transformed Spirit to that model after his Indigo Partners LLC gained control of the closely held carrier in 2006. That approach worked and Spirit, along with Frontier Group Holdings Inc., broke through and gained market share. But larger carriers, such as American Airlines Group Inc. and Delta Air Lines Inc., have responded in recent years with basic fares at similar prices. That competition has been punishing for Spirit. The company has posted annual operating losses since 2020. Its stock is down 83% this year. The carrier’s never spent “time or money” telling its story and let its low fares drive the discussion, Spirit Chief Executive Officer Ted Christie said Thursday on an earnings call after it reported more losses. Christie said the goal is to change from being known just as low cost and low fares to “delivering value with low costs.”<br/>
unaligned
Passengers aboard a Florida-bound plane were evacuated onto a taxiway at an Ohio airport on Friday after a mechanical issue forced the crew to abort a takeoff. Spirit Airlines flight 445 had just left a gate at the John Glenn Columbus International Airport when the crew reported the problem around 10 a.m., according to a statement from the airline. The plane was headed to Fort Lauderdale. The passengers were evacuated via the plane’s stairs onto a taxiway out of an abundance of caution, the statement said. They were then shuttled back to the terminal, and airline staff was working to arrange alternate travel plans. It wasn’t immediately clear how many people were aboard the plane. No injuries were reported. Spirit did not provide specific details about the mechanical problem, saying only that the plane would be “thoroughly evaluated” by a maintenance team.<br/>
Sun Country Airlines has curtailed growth plans for the second half of 2024, becoming the latest US discount carrier to do so in response to what executives describe as an over supply of seats. “The domestic revenue environment continues to be impacted by overcapacity, and the resultant impact on fares,” Sun Country chief executive Jude Bricker said on 2 August, the day the company reported second-quarter financial results. “As we move through the third quarter, we are slowing scheduled capacity growth.” Sun Country has in recent quarters steadily grown its scheduled-airline operation; that businesses’ capacity (in available seat miles) jumped 17% year on year in the first half of 2024. It had previously planned for another 15% year-on-year capacity bump in the third quarter. But industry conditions have led Minneapolis-based Sun Country to pull back. It now expects its scheduled operation’s capacity will be up 7-8% year on year in the third quarter, say Bricker. “We expect year-over-year growth to fall further in Q4,” he adds. “The pull-down comes mainly from reducing off-peak flying.” Sun Country turned a $1.8m profit in the second quarter, down from a $21m profit in the second quarter of 2023. The company’s second-quarter revenue slipped 2.6% year on year to $254m. But revenue from its scheduled-airline operation sunk 21% year on year in the second quarter to $88m, with Bricker saying average fares declined 20% in one year. “Clearly, we flew more during off-peak periods than the demand environment could support.”<br/>
Hungary's competition watchdog has imposed a fine of E770,000 on Wizz Air for misleading communication, the authority said on its website on Saturday. Hungary's competition authority said Wizz Air breached professional due diligence and was misleading in how it described its automatic check-in service and pushed consumers towards more expensive packages. Wizz Air was not immediately available for comment. The fine comes after Wizz Air lowered its annual profit forecast earlier this week after reporting a 44% drop in its first-quarter operating profit, partly owing to costs related to Pratt & Whitney engine troubles and one-off wet leases to bolster capacity. The low-cost airline, which flies an all-Airbus fleet, has faced challenges related to Pratt and Whitney RTX engines, with 46 of its planes set to be grounded for inspections this summer, placing constraints on capacity. European airlines have faced a difficult first half of the year because of spiralling costs and normalising customer demand after an initial post-pandemic boom. Air France-KLM, Lufthansa and Ryanair all reported challenging second quarters. U.K.-based Wizz Air carried 5.9m passengers in July, with a load factor of 93.8% as the company had to delete 1% of its scheduled flights due to worldwide outages.<br/>
Aer Lingus made an operating profit of E9m in the first six months of 2024, down E31m compared with last year. Some of this was driven by the industrial action taken by pilots in a row over pay, but only some. In a statement, Aer Lingus said the industrial action resulted in a E55m direct financial cost to the business over the second and third quarters, before factoring in the intangible impact on forward bookings. There were five days of disruptions in late June due to the work to rule by pilots while the flight schedule didn’t return to normal until July 17th (its third quarter). The other key factor in its profit decline was competition on transatlantic routes. American carriers increased their capacity into Ireland by 20% this summer, “putting pressure on Aer Lingus’ long-haul revenues, particularly in the economy cabin”. This is expected to continue into the third quarter. Interestingly, Aer Lingus appears to be outperforming its peers in International Airlines Group (IAG) in terms of its business cabin (only offered on transatlantic routes in the case of the Irish airline). On a conference call with analysts after the publication of its interim results, IAG CE Luis Gallego said Aer Lingus’s volumes on business travel were “close to” 100% of the pre-Covid level in 2019 while revenues were at 95%.<br/>
Lenders to India's Go First have decided to liquidate the company's assets after rejecting bids by interested suitors to revive the bankrupt airline, two banking sources said. Go First, which filed for bankruptcy in May last year, had received two financial bids under the bankruptcy process.<br/>The Committee of Creditors has voted in favour of liquidating the airline, the bankers said. Liquidation "is the best way forward" and "it makes no sense to keep pumping in more money" to cover costs related to the insolvency process, one of the bankers said. Emails seeking comments to Go First's resolution professional, who conducts the bankruptcy process, did not immediately get a response. The bankers did not wish to be identified because they were not authorised to speak with the media. Reuters had earlier reported that one of the two bidders had raised its offer after a push by lenders. "Bidders were given adequate time to review and raise their bids, but even that fell short of lenders' expectations," the first banker said.<br/>