See Spirit Airlines’ History From Trucking Company to Low-Cost Giant | Invesloan.com

In 1974, the company was refounded as Ground Air Transport Inc. by Michigan-native Ned Homfeld.

Homfeld eventually founded the first passenger version of Spirit in 1980: Detroit-based Charter One Airlines. The charter tour company officially launched operations in 1983 using turboprop aircraft.

It focused on gambling trips, offering routes to Atlantic City, New Jersey, from Chicago, Detroit, Boston, and Providence, Rhode Island.

As gambling soon became popular in other states, Charter One began ferrying northerners to warmer destinations, including Florida, the Bahamas, Las Vegas, and San Juan.

A decade after its founding, Charter One launched scheduled air service from Boston, Detroit, and Providence to Atlantic City, marking the start of the company’s commercial operations.

Charter One leased two Convair 580 twin-engine turboprops for the service. It would operate the planes for only a couple of years before rebranding to Spirit Airlines.

Spirit rebranded and added four DC-9 jets to its fleet. The company was able to secure the planes at a low price after the demise of low-cost competitor Midway Airlines brought down used-aircraft prices.

In June, the company launched its first flight from Detroit to Atlantic City, which operated twice daily. The airline’s code is NK for “Ned’s Kids.”

Spirit’s early fleet also included McDonnell Douglas MD-80 aircraft. According to Plane Spotters, 44 DC-9 and MD80 planes were delivered through the 1990s and early 2000s, with the last MD80 leaving the company in July 2010.

Spirit flew more than a quarter-million passengers in 1993 and generated $21 million in revenue. The company’s background as a tour operator helped it fill planes.

The carrier won over customers with cheap fares, powered by its low-cost business model in which everything beyond an unassigned seat — even water — cost extra. This secured lucrative ancillary revenue.

Legacy airlines with higher operational costs were often forced to slash fares to stay competitive when Spirit entered the market. This exacerbated the financial strains of the 1990s.

The 1990-1991 US recession opened the door for startups to acquire cheap planes and nonunion staff who had been employed by collapsed Pan Am, Trans World Airways, Eastern Air Lines, and Midway.

From 1993 to 1999, Spirit expanded its route network, offering flights to Philadelphia, Orlando, St. Petersburg, Myrtle Beach, Los Angeles, and New York City.

Delta’s defunct regional carrier, Comair, wanted to buy Spirit for $20 million in the mid-1990s. The deal was part of Spirit’s attempt to find a home in a bigger organization to help it expand amid growing competition.

The deal never materialized. Comair pulled out after a budget carrier, ValuJet, crashed into the Everglades in 1996, which created a stigma about the safety of low-cost airlines.

To address customer concerns, Spirit sent thousands of postcards to reassure customers about the safety of its planes.

It also launched a “Catch the Spirit” media campaign that included TV, radio, and billboard ads to sell Spirit’s perfect safety record and involved adding a new logo to its aircraft.

Spirit recorded a loss in 1996, mostly due to a 25% rise in fuel prices, consumer hesitation to fly low-cost carriers, and some legacy carriers matching Spirit’s fares and pushing it out of key markets.

However, Spirit’s planes began filling again in 1997. In June of that year, Spirit took over defunct carrier Sun Jet’s routes from New Jersey to Florida. It also acquired more planes to take advantage of Northwest’s 1998 pilot strike that grounded the rival for weeks.

That year, Spirit reported revenue of $121 million, had 20 aircraft in its fleet, posted the industry’s highest load factor at 76.4%, and carried 1.4 million passengers, an increase of 80% from 1997.

The airline had been courted by several other cities, including Detroit and Atlantic City, before making its move from Eastpointe, Michigan to Miramar, Florida.

Miramar made sense because it was in the Fort Lauderdale area where Spirit’s tour company was already based, and the airline had been serving Fort Lauderdale-Hollywood International Airport since 1993.

It still has a stronghold in the city, though it has trimmed capacity in recent years to optimize its network and better manage costs.

It’s still the only aircraft family in its fleet today, and it’s relatively young at an average of eight years. The planes are no-frills with only economy seats and a few rows of premium loungers.

Spirit continued to expand throughout the 2000s. It added San Juan, Puerto Rico in 2001. Boston, Grand Cayman, and San Francisco were added in 2006.

In 2007, the airline rebranded its “first class” as the Big Front Seat, which passengers can secure for an extra fee.

Spirit has since further revamped its most expensive seats, adding legroom, wider seating, and bundled perks to lure more premium flyers.

It’s part of a wide industry focus on premium revenue as flyers remain willing to pay up for comfort.

The strike occurred amid poor wages and benefits, leading to thousands of flight disruptions.

At the time, Spirit crews were among the lowest-paid pilots in the US despite flying the same planes as their higher-paid counterparts at other airlines.

The move reduced its operating costs because the resulting fewer overall bags lowered the aircraft’s fuel consumption. It also sped up the boarding process and freed up overhead bin space.

The à la carte model became its bread and butter.

In 2011, the carrier began charging for boarding passes printed at the airport ticket counter and reduced its maximum checked baggage weight from 50 to 40 pounds.

In 2008, Spirit was the number one airline for customer complaints. It still managed to fly five million passengers and achieve a net profit during the recession, making it one of the few carriers to do so.

In 2011, the Department of Transportation fined the airline $50,000 for what it described as deceptive advertising, claiming it did not disclose hidden fees, like baggage.

In 2014, Spirit was the top airline pick for growth among investors, and in 2016, Spirit was the first US carrier to add the A320neo to its fleet.

It had become a budget leader and consistently turned a profit as people sought cheap vacations and didn’t mind a bare-bones experience.

By 2019, the airline was operating 600 daily flights to 72 destinations across the US, Mexico, Central America, and the Caribbean.

The pandemic changed everything.

Spirit recorded a 2020 net loss of $428 million. Nevertheless, Spirit expanded operations with new city pairs and airports in 2021.

It ended the year with what it described as a “better than expected” operating revenue, despite the mix of poorly timed weather, system outages, and staff shortages that left thousands of customers stranded.

The customer outrage led to a warning from regulators. Still, Spirit continued to improve in 2022, reporting strong ancillary revenue in the first quarter. Things appeared to be moving back toward how they were in 2019.

Airlines have been doubling down on premium revenue as flyers remain willing to pay extra for better comfort across all cabins. This prompted Spirit to rethink its all-economy strategy.

It started bundling its fares and offering premium seating to lure more customers, but its “first class” seat still pales in comparison to the amenity-stuffed loungers on rivals like Delta and United.

In its latest update, it said it would continue to focus on high-demand routes, reduce its debt, and have just 80 aircraft by late 2026 — down from over 200 at its peak.