Spirit Airlines has repeatedly broken new ground for bad business behavior, no place more so than in its startling approach to customer service.
- June 17, 2015
- CBR - Strategy
Spirit Airlines has repeatedly broken new ground for bad business behavior, no place more so than in its startling approach to customer service.
Confiding in friends that you will soon be flying Spirit Airlines tends to elicit the same response as if you had just confessed to putting your parents in a home. I’m so sorry, people say, wincing sympathetically and patting your arm to let you know that this eventuality, while unavoidable, is surely bleak. Like chicken pox, it seems, everyone has endured Spirit once. I did 13 times last fall.
I teach at Chicago Booth, and for my fall class, I found myself commuting once a week from New York. Spirit offered the last flight out of LaGuardia on Friday nights and the soonest return flight after my Saturday class was done. This, in addition to the fact that I feel obliged to be frugal on the school’s dime, made choosing Spirit an advisable choice, if not necessarily an attractive one.
What convinced me was the opportunity for a little academic intrigue. For almost a decade now I’ve taught classes in business ethics, and Spirit is renowned for imparting lessons in that study, albeit, like Enron and Donald Trump, by negative example. From the outrageous (earning a record fine for consumer-protection violations), to the odious (employing a “strippermobile” for one of its ad campaigns), to the merely absurd (offering frequent-flyer miles for passengers’ air-travel horror stories), Spirit Airlines has repeatedly broken new ground for bad business behavior, no place more so than in its startling approach to customer service.
In 2013, Skytrax, an air-travel consultancy, downgraded its rating of Spirit to make it the nation’s only two-star carrier. The distinction reflects “a poor standard of Product and/or poor and inconsistent standards of Staff Service delivery,” placing Spirit in a colorful group of carriers that includes national airlines for failed states, like Syrianair and Yemenia, as well as Indonesia’s Merpati Nusantara Airlines, which suspended service last February when 50 of its 178 pilots resigned after not having been paid for a quarter.
The downgrade by Skytrax coincided with a five-year period when Spirit led all major US airlines in the number of complaints filed with the Department of Transportation. Between 2009 and 2013, passengers on Spirit were nearly three times as likely to file a complaint as passengers on any other airline, and more remarkable yet, every year the volume of complaints grew. By the fall of last year, the Spirit experience had become so notorious among travelers that a Time online poll found that, by a small margin, respondents preferred the possibility of flying with snakes to abiding it.
Defenders of the carrier, a stubborn group disproportionately comprising individuals employed by Spirit, claim that complaints can be explained by the fact that passengers don’t understand the policy changes required by the company’s 2007 decision to become the nation’s first “ultra-low cost” carrier. “The reason that people are so shocked about the carry-on bag right now is that they just don’t get it,” Spirit’s CEO, Ben Baldanza, said of the 2010 decision to start charging $45 for bringing such bags aboard. “They are just outraged that, ‘I used to get this for free and now have to pay for it.’”
A la carte pricing is a hallmark of the Spirit experience. Customers pay a premium to check or carry on luggage, to enjoy refreshments during the flight, even to affirmatively choose their seats. It is not enough to say, as Spirit does, that it is a “no frills” airline; the carrier has stretched that expression to include a glass of water. Unless you’re prepared to try your luck with the tiny faucets in the lavatory (the use of which, at this writing, is still complimentary), you’re stuck paying $3 a bottle.
Spirit’s basic ticket is the “Bare Fare.” It entitles you to a seat on the plane and a “personal item” that may not exceed 16 in. x 14 in. x 12 in., dimensions appropriate if you intend to bring a Mountie hat aboard but that otherwise reflect no travel bag you own. The policy is merely prologue, however, for it is only when you reach your seat that you realize the “Bare” in Bare Fare stands for barely any space. Spirit has the least amount of legroom of any major carrier, a condition that would be even more forbidding if the seats themselves actually reclined. They have “fewer parts,” Baldanza has explained, “so they break less,” a design choice that leaves passengers at takeoff feeling like they’ve been strapped to monkey bars swaddled in hopsacking.
The FAA regulates the number of flight attendants that must be aboard any domestic flight, which means Spirit cannot simply lock the passengers into the cabin upon takeoff as in a cattle car. However, given that there is little in the way of in-flight service—refreshments may be purchased, but no one ever seems to do so—one might conclude that, relative to flight attendants on other airlines, being in the cabin crew on Spirit is a cushy affair. And it may well be so, at least until the last 20 minutes of the flight, when unsuspecting first-time passengers are introduced to the advantages of the Spirit credit card, and a special bonus is teased for signing up in-flight. Then the flight attendants cruise the center aisle holding a stack of applications fanned before them as if they were geishas in training.
More than any other indignity of the Spirit experience, this is what most shocks my mother. From 1968 through 1980, she was a flight attendant, or hostess, to use the title the carrier preferred, on Braniff International Airways. The preference tells you everything you need to know about the attitude of Braniff toward its passengers, which, for its time, was as innovative as Spirit’s, though with a slightly different organizing principle.
How would you treat a guest in your home? That was the question my mother was expected to bear in mind throughout every Braniff flight. It was posed by Mary Wells Lawrence, the mastermind behind the mid-1960s ad campaign that helped transform the staid carrier into corporate America’s standard-bearer for stylish customer service. Lawrence’s answer included graduating a fleet of young women from Braniff’s Hostess College who possessed the hospitality of Suzy Homemaker and the air of Miss America.
Consider a routine domestic flight. Having assembled one of eight officially approved hairdos and slipped (I suspect there is no better word for it) into her Emilio Pucci outfit, my mother would station herself to greet her guests as they boarded the “jelly bean” planes, so named because their colors included beige, lemon, and turquoise. One by one, she would take passengers’ coats, fold them, and put them in the overhead rack. Then she would relieve flyers of their garment bags. Once her guests were seated, the mad dash would begin. On an hour-and-ten-minute flight from Kansas City, Missouri, to Chicago, all passengers could expect a full meal and two drinks, and for first class, a cocktail at takeoff and a glass of wine with the main course. When they weren’t busy with dining service—trash was collected on small trays; on short flights, sandwiches were served with tongs—hostesses were a walking commissary, offering passengers everything from magazines and playing cards to aspirin, motion-sickness pills, and baby food, even Braniff stationary. Given the in-flight responsibilities, my mother says, it was less service-with-a-smile than with a sprint. “A lot of times,” she admits, “you didn’t make it.”
With the Airline Deregulation Act of 1978, increased competition soon swept away most of these amenities, in addition to the carriers, like Braniff, that resisted. In coach, not even a whisper of overwhelming hospitality remains. But the story is different as you make your way to the front of the plane. Airlines have found it can be extremely profitable catering to those with caviar tastes and unapologetic expense accounts, especially on international flights. The reigning champ is Abu Dhabi’s Etihad Airways. In December, it began offering “Residence Class” service, so named because a passenger is entitled to a residence on the carrier’s Airbus A380s: a three-room apartment that includes a bedroom, bathroom, and living room. With all that space a guest might get lonely, so a butler, concierge, and private chef are also all provided. It seems churlish to observe that the cost of such service is not cheap. For a round-trip flight from Abu Dhabi to London, you can expect to pay about $40,000, which, at eight hours each way, comes out to just over $40 a minute.
That a flight on Spirit will occasionally cost you less than $40 highlights for its defenders the airline’s essential promise: bargain-basement ticket prices. “Offering our low fares requires doing some things that some people complain about,” Baldanza wrote in an email to the Dallas Morning News last April, after the paper ran a story about the egregious number of complaints his company receives. “[H]owever, these reduce costs, which gives our customers the lowest fares in the industry.” The contention is not unreasonable; it’s merely disingenuous. Baldanza would have us believe that the frustration with Spirit is simply a matter of obtuse passengers confusing the constraints of a low-cost carrier with a wanton unwillingness to afford first-class frills. Most people, however, don’t expect artisanal mustard at McDonald’s or concierge service at Save-a-Lot. The discontent is not a consequence of failing to meet ridiculous expectations, but of flouting those that are entirely reasonable, a tendency that seems nothing less than an essential part of Spirit’s business model.
Consider Spirit’s most notorious practice, tiered pricing for carry-on baggage. You currently pay $35 if you specify a carry-on when you purchase a ticket, but the price rises to $45 if you only do so when you check in online before your flight, $50 if you do so at the airport ticket counter, or a whopping $100 if you blithely wander up to the gate. People do, leading to shell-shocked moments in the boarding line when someone realizes, as one young woman in front of me put it, “The bag costs more than I do.”
Spirit epiphanies often take the sorry form of penny-wise and pound-foolish. On the same flight, another woman, while boarding the plane, looked at her companions and asked, “Am I the only idiot who paid for her seat?” She was, but she’s hardly alone. Among the warnings I heard from friends when I told them I was flying Spirit is that you have to pay an additional $10 for your seats beyond the ticket price. You don’t—the charge is only if you affirmatively choose a specific seat on the plane—but the website gives you the impression you must, a suggestion that was convincing enough to fool one couple I know, an oncologist and a former assistant US attorney, who, between them, have spent on their education the equivalent of a Residential neighborhood on Etihad.
Criticism of his company’s predacious practices doesn’t faze Baldanza. “Predatory means selling at below your cost,” the Spirit CEO told a skeptical questioner in a Reddit AMA talk last July. This is not only a novel definition, it is one that Spirit doesn’t risk illustrating. In October of last year, analysts at Morgan Stanley declared the carrier the “Most Profitable Airline in the World.” It is also among the fastest growing. Spirit launched 24 new nonstop routes in 2014 and plans another 26 for this year.
Success breeds admirers. In December, Delta announced that it was introducing five categories of service, including its answer to Spirit’s Bare Fare: Basic Economy. In addition to its precarious grammar, Basic Economy does not allow passengers to pick their seats, change their itineraries, or fly standby. The move is merely the most recent evidence that Spirit has become a trendsetter—arguably, the trendsetter—in the American airlines industry. But what trend is it exactly? Baldanza has repeatedly affirmed that Spirit is refining the art of offering affordable airfare, an effort that he qualifies as nothing less than an essentially democratic endeavor. He has a point, insofar as we live in a world where social mobility and simple mobility increasingly go hand in hand. Yet other low-cost carriers have long provided models of budget air travel without engendering nearly the angst of Spirit. Two of them, Jet Blue and Southwest, were even ranked No. 1 and No. 2, respectively, in the 2014 American Customer Satisfaction Index survey of US airlines.
No, rather than being a trailblazer in economy pricing, Spirit’s real significance is that it has come to embody one of the two guiding principles of customer service that, in capitalism, have always been contending centers of moral gravity. The first principle, embodied by Braniff, is the customer is always right. This approach assumes that commercial success depends on building strong bonds of customer loyalty. The second principle is caveat emptor, or more familiarly, buyer beware. It assumes that, when it comes to turning a profit, preying on the ignorance and necessity of customers is not simply acceptable for private enterprise, it’s standard operating procedure.
It is a commercial truism that nothing succeeds like success, but might makes right is its cultural corollary. In the airline industry, the success of Spirit has helped to legitimize practices that treat passengers, in the words of one consumer watchdog, like “meat in a seat.” When a carrier assumes the moral status of its customers to be different from an ATM only in respect to daily limits, monetizing the mistakes of first-time flyers can be a lucrative business. And for those passengers who return to Spirit a second, or even a third time, to say nothing of 12, they do so with a fatal sense of capitalism’s capacity to justify cruel choices, as well as with a growing cynicism of dealing with a company that regards common decency as a convenience fee.
The contempt is mutual. “Please respond, Pasquale, but we owe him nothing as far as I’m concerned,” Baldanza wrote in response to a 2007 refund request from a disappointed customer named James. A significant flight delay prevented James and his wife from attending a concert in Atlanta, the sole purpose of their trip. Subsequent conversations with customer service were also “sub par,” and James finally emailed several of Spirit’s top executives to air his complaint. Baldanza made the mistake of hitting reply all, which is how the exchange became public. “Let him tell the world how bad we are,” Baldanza offered. “He’s never flown before with us anyway and will be back when we save him a penny.”
Shamelessness has certain advantages. A more succinct expression of Spirit’s credo is truly hard to imagine.
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