Spirit Airlines chief executive Ted Christie says the company is positioned to steal share from its larger rival, Southwest Airlines Co (NYSE: LUV), in 2025.
Southwest will start charging its customers for checked bags from May, a significant change in strategy that may hurt the air carrier in the beginning – and Spirit plans on “taking advantage of that,” said Christie in an interview this week.
CEO Ted Christie’s remarks arrive only hours after Spirit Airlines emerged from bankruptcy.
The ultra-low-cost airline is much leaner and all set to take on its rivals now, he added.
Why customers may switch from LUV to Spirit Airlines
It’s the first time for Southwest Airlines Co to consider charging for checked bags.
The largest domestic US carrier has offered two free checked bags to all customers since its inception in 1966.
In fact, the time-tested perk has historically helped LUV navigate higher fuel prices and recessions.
But now that it’s changing the free checked bags policy and introducing basic economy class for the first time, chances are that some of its customers will switch to Spirit Airlines, as per Christie.
However, the Dallas headquartered firm touted its policy change as means for driving revenue growth in a press release on March 11th.
The narrative has sat well with investors considering Southwest stock is up some 15% since the announcement.
Spirit Airlines to focus on returning to profitability
While the ultra-low-cost air carrier is significantly smaller in operations than Southwest Airlines, it still competes with LUV in several cities, including Kansas, Nashville, and Milwaukee.
For those travelling to or from these cities, booking with Spirit on Expedia may be significantly cheaper than booking with Southwest at present, according to the company’s chief executive.
CEO Ted Christie also confirmed in the CNBC interview that Spirit Airlines, after emerging from bankruptcy, is laser focused on returning to profitability.
The company’s loss more than doubled to $1.2 billion last year on Pratt & Whitney engine recall, increased competition, higher costs, and failure to merge with JetBlue Airways.
How restructuring helped Spirit Airlines in 2025
Earlier this week, Spirit Airlines chief executive Ted Christie signalled the possibility of a merger to become the fifth-largest US carrier remained on the table.
But the company wants to stabilise itself first after exiting bankruptcy on March 12th, he added.
The restructuring helped Spirit lower its debt by a remarkable $795 million.
It brought the airline about $350 million in fresh capital as well.
Spirit Airlines is fully committed to going live again on a stock exchange, but is yet to disclose a specific timeline for that. CEO Christie’s remarks arrive only weeks after Spirit rejected a more than $2.0 billion buyout proposal from peer Frontier Group.
The post Spirit Airlines vs Southwest: why 2025 could shake up the skies appeared first on Invezz
