Spirit expands premium seats and loyalty rewards to emerge from bankruptcy

• Spirit has moved away from its budget roots for a more hybrid approach to crawl out of bankruptcy.
• The carrier plans to expand first class and premium economy while keeping a cheap no-frills section.
• It's betting this mix will attract price-sensitive customers and create a stickier loyalty program.

Spirit Airlines is keeping fares cheap — but adding a Gucci belt.

After months of unfounded rumors that the budget airline might close permanently or be sold off, Spirit said Tuesday it has reached a deal to help it emerge from its second Chapter 11 bankruptcy "in late spring or early summer."

It has been a rough few years for staff and customers alike: the airline has eliminated unprofitable routes, exited numerous markets, cut pilot and flight attendant pay, and sold millions of dollars' worth of airplanes to keep operations running.

The restructuring is expected to put Spirit on a stronger financial footing. Its debts and costs will be reduced, allowing the airline to keep fares low while doubling down on two of the industry's biggest moneymakers: premium seats and loyalty programs.

This includes new Spirit First loungers in the first few rows, extra-legroom premium economy seats, and expanded loyalty perks, giving travelers more choices while generating additional revenue.

American, Delta, and United have led this trend by doubling down on expanding and revamping their own high-dollar premium seats. First class on Delta's new Airbus A321neo, for example, will take up almost half the plane.

Spirit — which has struggled to turn a full-year profit for years and entered Chapter 11 for a second time in late August — is taking a page from the legacy playbook.

It's betting that a mix of new premium offerings and cheap no-frills seats will attract price-sensitive leisure travelers while building a stickier loyalty program to draw more frequent flyers and business customers.

This push toward premium isn't new

Spirit first began experimenting with higher-end offerings in 2024, as travelers showed a willingness to pay extra for premium perks. Even with its cheap tickets, the airline's barebones cabin — where even water cost extra — was no longer cutting it.

By expanding Spirit First, a lounge-style first-class section in the first few rows with more space and airport perks, the airline is opening new revenue streams and responding to demand for more than just no-frills seats with minimal legroom that don't recline. Premium cabins often generate a large share of an airline's income.

The carrier is also planning to add more of its premium-economy offering — rows with extra legroom or blocked middle seats — giving travelers another way to pay a bit more for comfort.

This multi-cabin strategy, paired with what Spirit said is a more rewarding loyalty program, makes the airline resemble its legacy rivals like American and Delta more than ever.

At the same time, Spirit isn't abandoning its ultra-low-cost roots. Passengers who only need a personal item and don't care about seat selection can still score cheap tickets without add-ons, and Spirit can continue collecting ancillary revenue from fees for bags, drinks, and other extras.

Budget rivals Southwest Airlines and Frontier Airlines have similarly jumped on the premium trend, offering more extra-legroom seat options and rewarding frequent flyers with perks such as seat upgrades, early boarding, and free luggage.

American, Delta, and United also sell their own basic economy fares that compete with Spirit's cheapest tickets — and they can be a better bang for your buck. Delta and United have screens at almost every seat, and all three offer power ports. American and Delta include a carry-on.

Loyalty is a major lever

Spirit has enhanced its credit card offerings to boost loyalty.

The basic card, with a $0 annual fee, offers priority boarding and check-in, plus more points per dollar spent. The higher-tier card, which costs $79 a year, adds two free checked bags and other perks. Spirit is also offering bonus points for new cardholders to entice sign-ups.

For airlines, credit card partnerships and loyalty programs can be more lucrative than flying itself.

Carriers make billions selling points to banks, which are then used to reward co-branded cardholders for everyday spending. More sign-ups mean more miles to sell, more perceived rewards for customers, and more revenue flowing back to both banks and airlines.

With billions of unused points floating in the system, the revenues are doubly attractive.

However, airlines are notorious for moving the goalposts. In 2023, Delta overhauled its loyalty program, switching how status is earned from miles flown to dollars spent, while also restricting lounge access.

Earlier this month, United made changes so that co-branded cardholders earn more points than regular travelers, highlighting how airlines tweak perks to maximize engagement and revenue.