8 - Tactics - Price - Spirit Case

8 - Tactics - Price - Spirit Case - Spirit Airlines Case...

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Spirit Airlines Case Please read the Economist magazine article in the following link and answer the questions and activities that follow: http://www.wsj.com/articles/SB10001424052702304749904577384383044911796 (also pasted at the end of this document) Activity I - 1. Play Spirit Quiz: http://www.wsj.com/news/interactive/SPRITQUIZ0512 Drag the fees to the pictures to guess how much some items cost. 2. What is the purpose of this quiz? What would be the purpose of this quiz if it was placed on Spirit’s website? Would you recommend Spirit to do that? Activity II – 1. Watch Youtube CBC report: https://www.youtube.com/watch?v=5AcgWZpUTTI 2. Why, if customers seem to be complaining, Spirit’s business not only isn’t losing, but actually is in gain? Activity III – Get online, bring up 2 websites: spirit airlines and another company (delta, US airways etc.) Check out the flight prices for 1 adult ticket to Chicago, 5 weeks from now. Write the two prices side by side. Add up additional cost for 1 on board suitcase. Suggest a marketing tactic to promote Spirit Airlines, which will not be focused on low prices . -----------
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A Stingy Spirit Lifts Airline's Profit MIRAMAR, Fla.— Spirit Airlines Inc. has scrimped its way to become, pound for pound, the most profitable airline in the U.S., helping reshape budget air travel by charging for everything from boarding passes to drinking water. In five years, Spirit has gone from the cusp of bankruptcy to leadership of ultra-low-cost carriers, the airline industry's fastest-growing niche. While full-service airlines chase big-spending business travelers, Spirit is profiting from fliers who seek to reach their destinations as cheaply as possible. But unlike other U.S. budget carriers, its cut-rate fares include little more than a seat, with nearly everything else sold a la carte. The 40-jet airline counts the bus company Greyhound Lines Inc. as a competitor. "If a corporation is buying your ticket, you're not going to fly with us. We're OK with that," said Spirit Chief Executive Ben Baldanza, who vacuums and takes out trash at Spirit's low-slung headquarters in this Miami suburb. "More people eat at McDonald's than at Morton's." Other U.S. carriers have dispensed with the frills of flying—notably budget pioneer Southwest Airlines Co. But Mr. Baldanza takes the nickel-and-dime approach to new extremes. FEES TO FLY Spirit Airlines offers cheap tickets and sells the frills of flying à la carte.
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Want a boarding pass? That will be $5, please. Thirsty? Water is $3, though Mr. Baldanza said it was safe to drink from the bathroom tap. A third option is to order ice—the only complimentary item in the cabin—and wait for it to melt. In 2007, Spirit was the first U.S. airline in decades to charge for all checked luggage—a fee later copied by most other major U.S. carriers. It was also the first to charge for carry-ons in the overhead bin: $30 to $45 a pop, with plans announced last week to push the fees to as high as $100 later this year.
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