The Lunch Club

INTRODUCTION
Spirit Airlines empowers customers to save money on air travel by offering ultra low base fares with a range of optional services for a fee.

This innovative approach grows the traveling market and stimulates new economic activity while creating new jobs.

HISTORY
Early Years (1964-2006) - was founded in 1964 as Clippert Trucking Company, a Michigan corporation, and in 1974 changed its name to Ground Air Transfer, Inc. - In 1983, the company started doing business as Charter One. - In 1992, Charter One changed its name to Spirit Airlines, relocated its headquarters to Miramar, Florida in December 1999.

Transition to ultra low cost carrier (2007-2010) to Present

- after making investments in 2007 bringing a change in business strategy and positioning of Spirit as a low-cost carrier with a focus on expanding Caribbean and Latin American routes. - Spirit during 2012 added 29 new markets, and during 2013 expects the bulk of its growth to stem from adding new routes between existing destinations to increase cost efficiencies by more fully utilising network assets

SWOT ANALYSIS
Strengths
Full of cash Correct business strategy Affordable airfare.

S O

W T

Weaknesses
Customer Service. Strict policies - Hidden fees. Lack of communication

Opportunities
Technology advances

Threats
Weather effect Bad reviews affect company Increased competition

STRENGTHS
Spirit has an important strength - no debt.

Correct business strategy

- Spirit Airlines has the correct business strategy (an ultra lowcost focus) and capital structure (no debt following its eventual IPO and recapitalization). - Cost per available seat mile low, easy to break even and make a profit.

Affordable airfare

April22

Southwest Airlines

DFW to SFO

DFW to SFO April22 Departure 8:30am Arrival 1:30pm 2 Stops April 25 Departure: 6:45am Arrival: 3:55pm 2 Stops Total Trip: $1029.40

DFW to SFO April22

Departure 10:05am, Arrival 1:16pm 1 Stop April 25 Departure: 6:00am Arrival: 4:12pm 1 stop Total Trip: $342.58

Delta Airlines

Spirit Airlines

Departure 6:19am, Arrival 1:19pm, 3 Stops April 25 Departure: 12:30om, Arrival: 10:01pm, 2 stops Total Trip: $395.50

WEAKNESS

Customer Service

Strict Policies- Hidden Fees

STRICT POLICY - Will not refund any nonrefundable ticket - charge a change fee if want to keep the value of the ticket - Reservation booking fee $10, Boarding pass printed at airport $5, Passenger usage fee $8.99 HIDDEN FEES - $9 flight to Las Vegas on Spirit Airlines too good to be true? - Spirit Airlines does offer some seats for $9, BUT if you join their membership club, which comes with an annual fee of just under $60. - what it would cost to fly from San Diego to Vegas if we didn't join the club? $39 flight, with a return flight for $99, plus $37.40 in taxes and fees. Spirit Passenger usage fee: This newly hiked fee of $16.99 each-way "applies to most reservations." $30 fee each way for carrying on a bag to put in the overhead compartment. pick out a window seat ahead of time, that's another $10 each way charges for soda $3, and snacks starting at $2.

Lack of Communication

Expanse destinations
During the last two years Spirit has made a pronounced expansion into the US domestic space after focusing expansion for several years on Latin America and the Caribbean from its Fort Lauderdale headquarters. The expansion has included a push into US carrier legacy fortress hubs including Atlanta, Dallas-Fort Worth, Chicago, Minneapolis and Denver.

THREATS
Weather Effect
- Because Headquarter is in Florida, climate can change quickly, airlines have difficulty making quick schedule. - A USD25 million hit to Spirit revenue, resulting from operational disruptions from superstorm Sandy that struck the US east coast in Oct2012, triggered an 18% drop in Spirits 4Q2012 profits yearover-year to USD20 million.

Bad reviews affect company

Increased competition

Goals: Improve quality Improve sales, reputation, customer satisfaction

Marketing Strategy: Be seen as a challenger as a competition Intensify effectiveness of promotions Reevaluate customer satisfaction strategies and promotional strategies

Work Cited
Ryniec, T. (2012, July 5). Spirit Airlines (SAVE): Zacks Rank Buy. Retrieved from YAHOO! Finance website: http://finance.yahoo.com/news/ spirit-airlines-save-zacks-rank-050014899.html