American low-cost carrier Spirit Airlines announced plans on Tuesday to develop premium services, reduce costs, and increase profits, leading to a 7% rise in the company’s stock, as reported by Reuters.
The airline joins fellow budget carrier Southwest, which last week announced its move into the premium segment, aiming to return to profitability by capitalizing on the growing demand for premium travel.
While many U.S. airlines face the need to lower prices due to an oversupply of seats in the domestic market, carriers like Delta and United Airlines are betting on the high-margin premium segment to boost profits.
Starting August 16, Spirit will offer new travel options ranging from premium class to basic economy, with the new options available starting August 27.
Spirit’s top-tier offering, named “Go Big,” will include a large front seat with snacks, drinks, and priority check-in, among other amenities.
Spirit Airlines also announced four new options for travelers, including priority check-in services, extra legroom seats, and access to streaming data via onboard Wi-Fi.
These new products mark a departure from the traditional ultra-low-cost carrier (ULCC) business model, which typically offers bare-bones services at minimal fares while charging high fees for additional services.