Spirit Airlines abruptly ceased operations in the U.S. over the weekend, a development that will ripple across the industry by easing price pressure and giving rival carriers more room to raise fares, particularly once short-term disruptions subside, Northeastern University experts say. For years, Spirit was the leading “ultra-low-cost carrier,” a pricing model that strips fares down to the bare bones and charges separately for nearly all amenities, such as seat selection, carry-on bags and even printing boarding passes — a practice in the airline industry also known as “unbundling.”
Spirit’s pricing and service model was one that “many people wanted,” said John Kwoka, Neal F. Finnegan distinguished professor of economics at Northeastern, who attributed the airline’s demise to “poor management, risky expansion, some bad luck with engines” and increasing competition from legacy carriers that have adopted low-fare options to accommodate price-sensitive travelers.
