Replying to Dying veteran protests Spirit Airlines' no-refund policy

Jerry Meekins

For those who missed it, yet another special exception was made for a certain group of Americans that is already uniquely privileged among the worker classes.

Here's the original response from Spirit that some folks didn't much care for...

We receive many requests for refunds every day for similar situations. It wouldn't be fair to bend policy for one and not all. We will not make customers who follow the rules pay for those who don't. It's just not fair.

Followed by a full refund along with another $5,000 in charity for veterans...

In my statements regarding Mr. Meekins' request for a refund, I failed to explain why our policy on refunds makes Spirit Airlines the only affordable choice for so many travelers, and I did not demonstrate the respect or the compassion that I should have, given his medical condition and his service to our country. Therefore I have decided to personally refund Mr. Meekins' airfare, and Spirit Airlines will make a $5,000 contribution, in his name, to the charity of his choice, Wounded Warriors. We have worked hard to build a great company that makes air travel affordable while making our employees proud and customers satisfied. All of us at Spirit Airlines extend our prayers and best wishes to Mr.Meekins.

Link: Spirit Airlines bows to pressure from veterans groups...


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Yeah, I see that. Sorry...some sites are finicky about that.

I don't think it's the site that's being needlessly finicky.

I'm going to take exception to the idea that I would need to log into a site to get a cost for a flight from A to B or for a round trip from A to B and back. Yes, it can be ducked, but I think that barrier is worth taking exception to.

I think your bogus airline punditry is worth taking exception to.

Yeah, I see that. Sorry...some sites are finicky about that.

I don't think it's the site that's being needlessly finicky.

I'm going to take exception to the idea that I would need to log into a site to get a cost for a flight from A to B or for a round trip from A to B and back. Yes, it can be ducked, but I think that barrier is worth taking exception to.

Idea! Don't fly Spirit. You have lots of choices other then flying with Spirit. Why all the angst about how Spirit conducts their business when no one is forcing you or anyone else to fly them?

There's a post on Flyertalk from someone who, due to a family issue, had to make a last minute trip from Las Vegas to Chicago. The cheapest last minute flight they could get was $700 round trip. That was until they tried Spirit. Even with fees (and that person opted for choice seating), Spirit came in at $300 round trip. They saved $400. Yes, there were fees, and yes, if there was an irr-ops, they were hosed. But, they saved $400, and the trip was fine.

Walmart is not Nordstrom. Spirit is not United. It is what it is, and it serves a specific travel market. It must be doing something right because they are profitable, and their passenger count keeps climbing. It's not the way I prefer to travel, but I have no problem with how Spirit operates.

Yeah, I see that. Sorry...some sites are finicky about that.

I don't think it's the site that's being needlessly finicky.

I'm going to take exception to the idea that I would need to log into a site to get a cost for a flight from A to B or for a round trip from A to B and back. Yes, it can be ducked, but I think that barrier is worth taking exception to.

Yeah, I see that. Sorry...some sites are finicky about that.

I don't think it's the site that's being needlessly finicky.

Yeah, I see that. Sorry...some sites are finicky about that.

Also, I can't get through a "dummy booking" without a login, and I'm not giving my email to those guys.

FYI, you do not need to give your real email to them. I just did a dummy booking using a non-existent fake email address, fake name and a non-existent residence address. There is another thread about Spirit going on under this forum, you may go check out my reply there.

There are elements of both at work. Companies hire people because they need to, but they expand services because they can afford to (and presumably because it gives them an edge over the competition).

I have no idea what some unspecified theoretical "company" in some unexplained market is doing. All I know is that US airlines are busy consolidating their resources, shrinking their services, and raising their fares.

Your point on "all else stays equal" omits two important variables:
-The first is that, at present, there are a lot of markets where one or more LCCs are heavily restricting fares.

That is no longer any sort of logical distinction. After a decade full of bankruptcies and consolidations there is no domestic carrier operating scheduled flights that does NOT employ the core elements of the "LCC" model at this point.

-The second is that, absent at the very least ULCCs, fares rising won't necessarily run off enough business to offset the higher fares. This wouldn't be an issue, except that more often than not, carriers have tended to use the added revenue to either run extra frequencies throughout the system/expand operations to new markets (which can beget a virtuous cycle of market growth) when they weren't trying to reduce debt.

I can't even tell what that is supposed to mean.

As to what I'm seeing out there: This jumps to mind. $19 may be great, and yes there may be those unavoidable taxes as well, but when you've got those other (unavoidable) surcharges thrown in (such as the "unintended consequences" fee)...yeah, there's an issue. I also cannot tell at what point (if any) they start throwing on fuel surcharges...and I've seen some other cases where those have been abused (for example, cruise bookings that quote a fare and then announce a fuel surcharge if the price of oil is over a price somewhere around $75-80).

That's what you're seeing eh? A post from May 19, 2008 at 11:37 AM?!

Also, I can't get through a "dummy booking" without a login, and I'm not giving my email to those guys.

I think that pretty much explains everything right there.

There are elements of both at work. Companies hire people because they need to, but they expand services because they can afford to (and presumably because it gives them an edge over the competition).

And your point on "all else stays equal" omits two important variables:
-The first is that, at present, there are a lot of markets where one or more LCCs are heavily restricting fares. A case in point would be to compare a flight to/from Des Moines to one to/from a similar-sized market with LCC involvement. Yes, this is going to be more extreme than your average market (DSM is one of the worst in the country), but it's an example. In a lot of cases, this has led to unnaturally low fares as the various operations try to run one another into the ground fighting for market share. I think Cornelius Vanderbilt had more than a few frustrated comments about having to do this with the Pennsy.
-The second is that, absent at the very least ULCCs, fares rising won't necessarily run off enough business to offset the higher fares. This wouldn't be an issue, except that more often than not, carriers have tended to use the added revenue to either run extra frequencies throughout the system/expand operations to new markets (which can beget a virtuous cycle of market growth) when they weren't trying to reduce debt.

You're omitting one important point: Airlines aren't expanding capacity today, in fact they are reducing capacity, specifically because they want to keep fares high.

When fares are high, people don't fly as much. Think of a typical demand curve. When price is high, quantity demanded is low. When price is low, quantity demanded is high.

What has hurt airlines in the past decade has mainly been rising fuel costs. The result of this is that we are starting to see a reduction in air service because airlines can't raise fares high enough to cover those costs, because doing so does, in fact, drive business away. The markets able to sustain the higher air fares are seeing a reduction in capacity as airlines find it more profitable to fly a smaller plane full at higher fares rather than a large plane mostly empty, or even a larger plane full with low fares. That's why you see 50- and 70-seat regional jets on routes that, 20-30 years ago, saw DC-10s.

The airlines aren't using those higher fares to expand service. They're using them to stay alive. But smaller planes require less staff than larger ones, so that's a net reduction in staff (and, regional jets are also flown by airlines that pay their staff less, but that's outside the scope of this discussion).

The existence of low cost airlines in this country has led to a significant expansion in the number of people flying, because they can now afford to whereas before, they couldn't. Airlines like Southwest and JetBlue (and Spirit) have enabled more people to fly. True, they have taken passengers from other airlines, but there are still plenty of people who won't fly low-cost carriers. If you got rid of Spirit, some of those passengers would head over to other airlines (resulting in a small capacity bump on those carriers), but others would simply not travel at all. With a reduction in passenger traffic, there would necessarily be a capacity reduction. That also means a reduction in employment.

As for your initial example of DSM vs. similar markets with LCCs, what is the total number of flights to DSM vs. that hypothetical "similar" market? In many cases, LCCs entering a market has led to an increase in traffic. Also, your comment about airlines trying to "run one another into the ground fighting for market share" may have applied 10-20 years ago, but is no longer the case. This goes back to my point earlier. Airlines are being a lot smarter with their capacity, realizing that they can't afford to get into a fare war like they used to. That's one of the things that's driving the latest push for industry consolidation. The airlines themselves realize there are too many of them out there, and there's too much capacity, and that's depressing fares and profitability.

Bottom line, I don't see any real argument that says that an airline like Spirit shutting down will lead to a net increase in employment in the airline industry.

On the issue of hoping for the unemployment of folks: I hate to say it, but I would argue that there has been a much broader wish for unemployment in the drives for efficiencies in much of the industry. If anything, I think you could argue that annihilating Spirit's business model would increase employment in the airline sector by letting fares rise again. In so many words, you might well eliminate "over-efficiency".

That's a very curious interpretation of how economics works.

Airlines (and most companies, for that matter) don't hire people because they can afford to. They hire people because they need to.

If average airfares rise, assuming all else stays equal, the quantity demanded of air travel decreases. This leads to a lower amount of capacity that airlines need to provide to meet traffic requirements. Not sure what scenario has airlines hiring more people to service fewer passengers.

There are elements of both at work. Companies hire people because they need to, but they expand services because they can afford to (and presumably because it gives them an edge over the competition).

And your point on "all else stays equal" omits two important variables:
-The first is that, at present, there are a lot of markets where one or more LCCs are heavily restricting fares. A case in point would be to compare a flight to/from Des Moines to one to/from a similar-sized market with LCC involvement. Yes, this is going to be more extreme than your average market (DSM is one of the worst in the country), but it's an example. In a lot of cases, this has led to unnaturally low fares as the various operations try to run one another into the ground fighting for market share. I think Cornelius Vanderbilt had more than a few frustrated comments about having to do this with the Pennsy.
-The second is that, absent at the very least ULCCs, fares rising won't necessarily run off enough business to offset the higher fares. This wouldn't be an issue, except that more often than not, carriers have tended to use the added revenue to either run extra frequencies throughout the system/expand operations to new markets (which can beget a virtuous cycle of market growth) when they weren't trying to reduce debt.

As to what I'm seeing out there:
This jumps to mind. $19 may be great, and yes there may be those unavoidable taxes as well, but when you've got those other (unavoidable) surcharges thrown in (such as the "unintended consequences" fee)...yeah, there's an issue. I also cannot tell at what point (if any) they start throwing on fuel surcharges...and I've seen some other cases where those have been abused (for example, cruise bookings that quote a fare and then announce a fuel surcharge if the price of oil is over a price somewhere around $75-80).

Also, I can't get through a "dummy booking" without a login, and I'm not giving my email to those guys.

On the issue of hoping for the unemployment of folks: I hate to say it, but I would argue that there has been a much broader wish for unemployment in the drives for efficiencies in much of the industry. If anything, I think you could argue that annihilating Spirit's business model would increase employment in the airline sector by letting fares rise again. In so many words, you might well eliminate "over-efficiency".

That's a very curious interpretation of how economics works.

Airlines (and most companies, for that matter) don't hire people because they can afford to. They hire people because they need to.

If average airfares rise, assuming all else stays equal, the quantity demanded of air travel decreases. This leads to a lower amount of capacity that airlines need to provide to meet traffic requirements. Not sure what scenario has airlines hiring more people to service fewer passengers.