What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff – What’s Next for the Bare Bones Airline?
What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - Cutting Costs to Boost Profits
Spirit Airlines made headlines last month when it announced plans to cut 8% of its workforce, impacting thousands of employees. The budget carrier cited rising costs, particularly with jet fuel, as the reason for needing to trim expenses. This move is the latest example of Spirit taking aggressive steps to boost its bottom line, even if it comes at a human cost.
The airline industry has always been a low-margin business, with earnings fluctuating based on external factors like fuel prices. In recent years, competition among low-cost carriers has also intensified, making it even harder for Spirit and others to turn a profit. This combination puts immense pressure on airlines to find ways to lower operating costs wherever possible.
For Spirit, that has often meant squeezing as much savings as it can out of every area of its business. From charging fees for carry-on bags to removing seat-back pockets, Spirit's product is stripped to the bare minimum. This ultra low-cost model is central to Spirit's strategy, as it looks to offer base fares far below competitors.
While some measures, like increasing aircraft utilization rates or renegotiating supplier contracts, don't impact customers directly, reductions in staffing do. Spirit has cut thousands of jobs over the past decade to optimize its workforce and labor expenses. Outsourcing roles like cabin cleaning has also been utilized.
According to CEO Ted Christie, the latest round of layoffs is about "rightsizing" Spirit's workforce after rapid growth in recent years. While the move should help improve profit margins, it also raises questions about impacts on customer service and operations. Spirit already ranks low in on-time performance and consumer satisfaction ratings among major U.S. airlines. Further staff reductions could exacerbate these challenges.
However, for a carrier laser-focused on costs like Spirit, the tradeoffs are worthwhile if they lead to a more profitable business. While customers may suffer from depleted staff levels, employees bear the brunt of ruthless cost-cutting. Morale and company culture inevitably suffer when positions are continuously eliminated.
What else is in this post?
- What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - Cutting Costs to Boost Profits
- What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - How Will Service Be Impacted?
- What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - Focusing on Most Profitable Routes
What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - How Will Service Be Impacted?
The biggest question surrounding Spirit's staffing cuts is how service will be impacted going forward. For an airline that already ranks near the bottom for customer satisfaction, reducing headcount further could have significant ramifications. So what exactly might customers expect in the wake of these layoffs?
First and foremost, many industry experts predict longer lines and wait times at airports. With fewer agents staffing check-in counters and gates, passengers may find themselves standing in lengthy queues. Delays processing bags or resolving customer issues are also likely. Travelers accustomed to breezing through smaller Spirit airports may now face congestion and frustration.
Onboard, the cutbacks will almost certainly be felt as well. Reduced flight attendant staffing means less personal attention and slower service. Requests for snacks, drinks or assistance may go unanswered, especially on busy flights. With fewer sets of eyes in the cabin, safety checks could also become less thorough.
Likewise, having fewer ground personnel and mechanics could contribute to more delays and cancellations. If turnaround times tick up even slightly, it can quickly cascade into major schedule disruptions. That's worrisome for an airline that already deals with poor on-time performance.
When issues do arise, customers may also wait longer to speak with a representative by phone or online. With fewer customer service agents, call wait times and email response times are expected to increase. Travelers seeking compensation for delays or rebooking canceled flights could face frustrating experiences trying to get help.
Perhaps most worrying is if corners get cut when it comes to safety and maintenance with fewer qualified technicians. While unlikely, this would be an alarming outcome of workforce reductions taken too far.
Of course, some believe the layoffs won't impact operations much given Spirit's low service levels already. Yet it's hard to see how eliminating thousands more frontline jobs won't trickle down to the customer experience.
What It Means for the Airline:Spirit Seeks to Soar Higher By Trimming Staff - What's Next for the Bare Bones Airline? - Focusing on Most Profitable Routes
Spirit's route network is constantly evolving as the airline prunes underperforming flights and doubles down on proven money makers. This optimization reflects a key part of Spirit's strategy - maximizing aircraft productivity by deploying capacity where it generates the greatest returns. Routes that fail to meet profitability goals get the ax quickly.
Analysts point to Spirit's Florida network as a prime example of this approach. The airline has systematically reduced flying from Midwest cities like Milwaukee and Akron to Florida destinations. These flights face stiff competition from legacy carriers like Delta. At the same time, Spirit has added dozens of new routes connecting major Florida cities like Orlando, Fort Lauderdale and Tampa. Flying within Florida has proven far more lucrative given the huge year-round leisure demand.
Similarly, Spirit previously flew from Los Angeles to several smaller markets in the Pacific Northwest. As these routes struggled financially, Spirit exited many of them while adding flights from LAX to major cities like Denver, Houston and Las Vegas. The larger metro areas generate significantly higher local traffic and better connectivity.
International flying is another area where Spirit has refined its network. The airline ended less profitable routes to South America and the Caribbean over the past year. These included destinations like Lima, Peru and Panama City, Panama. Operations to Cancun, Mexico have replaced this flying because the route produces better margins. Mexico is a core international market for Spirit given the strong VFR demand.
Notably, Spirit does take risks on entering brand new cities, often with big introductory promotions. If the new routes fail to ramp up quickly, Spirit cuts its losses rapidly. For example, Spirit launched several Nashville routes in 2021 but exited within months after yields lagged expectations. Being nimble gives Spirit an edge when expanding.
Yet while Spirit constantly "prunes the vine" by eliminating underperformers, this approach is now under heightened scrutiny. The airline faces accusations of alienating entire communities by abruptly ending all service. Political leaders have criticized Spirit for the economic damage when it exits towns reliant on leisure travel. Additionally, customers complain about investing in Spirit's loyalty program just to see their local routes terminated shortly after.