Last month, Spirit Airlines unveiled a new and improved cabin design. Naturally, a carrier touting its revamped passenger experience hopes for media attention — but maybe not from The Daily Show.
Alas, host Trevor Noah has made Spirit a recurring punchline, reveling in the ultra-low-cost carrier’s bargain-basement reputation. It’s so easy to make fun of Spirit (which Noah acknowledged is the show’s “favorite airline” for precisely this reason) that the segment about the cabin improvements barely even contained actual jokes. Mostly, Noah and his audience just laughed at the very notion of Spirit doing a better job at anything. “A full-sized tray table is a weird thing to brag about,” he said. “But on the bright side, now you have room for the meal they don’t give you!”
This is probably not fair to Spirit. But comedy isn’t fair — and neither is the way brand reputations get forged in the real world, where marketing campaigns and happy product announcements are not the only factors in play.
And it’s not just The Daily Show (or Saturday Night Live or Late Night or any of the other shows that have mocked Spirit). Even in the context of air travel, a category that bristles with consumer umbrage, Spirit has a shabby brand — perceived by many as a bare-bones option of last resort, like some kind of flying Waffle House. Thus when a first-time Spirit flyer tweeted before boarding the other day that she was “a little nervous” about what lay ahead, responses included: “Don’t do this to yourself,” “Imagine a Greyhound bus in 1999. Now imagine it is in the air,” and “Spirit blows … worst airline ever!” Several people offered prayers. As a Reddit user once explained in a thread about why the brand is so frequently mocked: “Who doesn’t fly Spirit and have a bad experience? Spirit is just a notoriously awful airline and super easy to make fun of.”
But here’s the realpunchline: The airline also happens to be a success. “Spirit is consistently incredibly profitable,” says Madhu Unnikrishnan, editor of Skift Airline Weekly. “It’s a brilliant business,” agrees Samuel Engel, senior vice president of aviation at consulting firm ICF. And it has been for years.
Eventually a negative popular image will crush your business. If that’s the case, how do we explain Spirit?
While the carrier today could convincingly argue that it is not as bad as its reputation suggests, it was profitable even when it wasthat bad. Since 2009, its operating margin has consistently been well above the industry average, peaking at an astonishing 24% in 2015 (compared with an industry average of 15%). Revenue has climbed from about $700 million in 2009 to $3.2 billion in 2018. It’s still growing — the carrier just completed an order for 100 new Airbus jets — and the governor of Florida stopped by when the company recently broke ground on a new, 500,000-square foot, $250 million campus headquarters near Fort Lauderdale.
The company itself evidently remains a bit sensitive about criticism of its brand, and, after a lengthy back and forth, declined to talk to me for this story, essentially suggesting the idea that it had a negative reputation was out of date. But while the airline really has worked to improve its brand, clearly late-night TV, among others, hasn’t yet received that memo. And a recent study of airline social media mentions found that 69% of Spirit-related tweets were negative — the worst of any carrier. Which raises a vital question: 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?
The post 9/11 years were a tough stretch for the airline industry in general, with multiple carriers declaring bankruptcy. Spirit was a small, privately held regional carrier that had no obvious means of competing with bigger, mainstream rivals from American to Southwest. When Ben Baldanza, who had spent a couple of decades working for various big carriers, joined Spirit in 2005, it had lost $80 million in the previous 12 months. The following year, Indigo Partners, a private equity firm with an air transportation focus, became an investor in Spirit and elevated Baldanza to the chief executive role to oversee a transition to a new model borrowing from ultra-low-cost airlines elsewhere, notably Ireland’s Ryanair, Hungary’s Wizz Air, and Malaysia’s AirAsia.
The process was called “unbundling.” Instead of thinking of a flight as a means of getting from point A to point B plus a certain set of extras and amenities (like Cokes and snacks, maybe an in-flight movie) built into the ticket price, an unbundled fare promised nothing more than the get-you-from-A-to-B part. Everythingelse would cost extra: using the overhead bin, guaranteeing your group’s seats were together, printing your ticket at the airport instead of at home — even watercost $3. Baldanza positions this as a more equitable approach: “You don’t have to pay for things you don’t use.” A third of Spirit customers never checked a bag, he says, so why should they have to subsidize that infrastructure?
“They were ahead of the curve on that in the United States,” says ICF’s Engel. “The low-cost carriers in the U.S. had long ceased to be truly low cost, and the leading flights in efficient operation had moved to Europe and Asia. … That left a hole in the market. It left an opportunity.”
The intense focus on lowering the ticket price also meant eliminating some “extras” altogether — like reclining seats, which can malfunction and drive up maintenance costs. The seats in general were notoriously thin and packed together. “If we were flying a plane with, like, 138 seats,” Baldanza recalls, “but the FAA says you can put 145 seats on it, then we said, ‘Why wouldn’t we put 145 in?’” The airline ran more flights per day and left fewer planes idle. In short, if Spirit could be the lowest total-price option by a notable margin — meaning ticket plus any extras you buy — it may not attract every flyer, but it could attract enough to succeed.
But it wasn’t just a lack of “creature comforts,” as Baldanza put it, that set Spirit apart from less ruthless discounters. Years before Spirit’s rise, Southwest Airlines branded itself as a budget option — but made a distinct effort to position itself as the consumer’s ally. Substituting free meals with a mere snack was converted to the clever “fly for peanuts” campaign that underscored how the carrier’s budget-conscious ways saved you money, and did so with love (to reiteration that affection, its chosen stock ticker symbol: LUV). Still, the company made an effort to keep its service up to standard, and marketing its cost-cutting in a lighthearted way played into a carefully cultivated irreverent brand: Making the flight cheaper somehow seemed like a fun group experience. Spirit never seemed fun — just cheap. “The carrier was not really focused on the passenger experience,” as Unnikrishnan puts it.
“Not only did we not go out of business, we ran some of the highest margins in the business for 10 years.”
And, really, it was kind of half-assed. One consumer group study covering the years 2009 to 2013 found Spirit was the most complained about American carrier, “generating approximately three times more complaints per passenger than any other airline.” Consumer Reports slammed it, too. This was the era when the carrier’s awful brand became a pop-culture trope, complete with an Onion headline: “FAA Report: Spirit Airlines Is The Fucking Worst.”
Part of this was flyers feeling blindsided by the airline’s fees-for-everything approach. But another part was the carrier’s consistently awful on-time performance and a reputation for indifferent service in general. Baldanza, as it happens, had accidentally contributed to that reputation. In the summer of 2007, an emailed complaint from a first-time Spirit flyer described extensive flight delays and rude service and a “completely and utterly dissatisfying” customer experience. “We owe him nothing as far as I’m concerned,” Baldanza emailed. “Let him tell the world how bad we are. He’s never flown us before anyway and will be back when we save him a penny.” He thought he was addressing a Spirit staffer but, in fact, had replied to all, including the disgruntled consumer — who did indeed “tell the world” as the incident was widely reported.
It was an embarrassing moment, but it hardly drove Spirit out of business. Because the thing is, Baldanza wasn’t wrong. Customers looking to save kept coming and kept saving. “Not only did we not go out of business,” he chuckles now, “we ran some of the highest margins in the business for 10 years.”
Looking back, he concedes that perhaps the Spirit brand was a little more brazen than it needed to be. But he’s not exactly apologetic: 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.”