Is Spirit the nation's true low-cost airline?

• Spirit increasingly sticks out against bigger, traditional low-cost carriers
• Airline's growth arrives as fares to fly many big carriers have risen 7 times since January
• Net income, excluding special items, up 35.4% in second quarter

Spirit Airlines, the ultra-cheap carrier known for charging passengers to carry a bag on a flight, is fast looking more like the nation's true low-cost airline.

Spirit, which only a few years ago flew largely to destinations along the East Coast, is rapidly adding planes to its fleet and expanding its routes to more cities that are dominated by the country's biggest airlines.

And it's asking for fares, such as $38.79 one-way from Minneapolis-St. Paul to Chicago O'Hare, that at times are about half the price charged by bigger carriers such as American.

"Whenever we add a new market or a new service, we always try to price that market at lower than the prevailing fares in that market to bring back some people who've been priced out," says Ben Baldanza, Spirit's President and CEO.

"Our vision," Baldanza says, "is to make sure the customer who can't afford to pay current airline prices has an option to still travel."

Spirit may never have the flight network and frequency to make it the go-to airline for frequent business travelers. Nor is its bare-bones way of flying — in which all you get for your ticket price is a flight because everything else costs an extra fee — for everyone.

But with its ultra-low fares, Spirit increasingly sticks out against bigger, traditional low-cost carriers, such as Southwest and JetBlue, which increasingly charge prices comparable to what passengers pay to fly the traditional network airlines such as United, Delta, American and US Airways.

Spirit's growth arrives as fares to fly many of the big carriers have risen seven times since January, roughly 4.5% over last year. And low-fare giant Southwest, which has merged with another low-cost carrier, AirTran, has led the way on five of those increases.

"They've realized that in really large markets ... fares are higher than they've ever been," Kevin Schorr, vice-president of airline and airport consulting firm Campbell-Hill Aviation Group, says of Spirit.

"And," he says, "even though they charge all those (extra) fees, there's no question if you're the kind of passenger that just wants a flight from A to B, can put your belongings under the seat in front of you, and sit anywhere on the plane, you will no doubt get the cheapest ticket on Spirit."

200 flights a day

Florida-based Spirit has announced or begun service this year on more than three dozen new routes, offering its rock-bottom fares on flights between Denver and Phoenix, where a one-way ticket late this month will cost $38.79, or Houston and Las Vegas, among other destinations.

By the end of this year, Spirit will have a fleet of 44 jets flying on average more than 200 flights a day to more than 50 destinations. And Baldanza says the airline plans to add roughly seven more planes a year through the end of 2015, increasing its number of seats or flights by at least 15% annually.

While bigger carriers, such as United and Delta, compete for fliers with their cabin perks, loyalty clubs and vast international service, Baldanza says Spirit's main selling point remains the fares it brings to a market. And though Spirit is planting a bigger flag on the turf of the larger airlines, Baldanza says it's not trying to directly challenge them.

"We're not trying to take share from any other airline or convince a customer you're better off flying us than JetBlue or Delta," he says. "We're just saying we want to offer a lower-priced product to people who want to pay less."

Baldanza likened Spirit to McDonald's or Wal-Mart. "Neither of their goals is to dominate the restaurant or retail worlds," he says, "but to serve their niche really well."

Southwest has long been the nation's low-fare kingpin, which has forced down competitors' prices just by entering a market.

But Southwest no longer can be counted on to always have the cheapest flights. And Southwest, which carries more passengers domestically than any other U.S. airline, is looking more like a traditional carrier with its large route network and entrance into international service.

Some analysts say Spirit, along with Allegiant Air and Frontier, now has a truer claim to the industry's low-cost mantle.

"At the end of the day, our goal is to be the low-fare leader in the market we serve," says Spirit spokeswoman Misty Pinson, adding that the airline aims to have a total fare that is at least 25% lower than the currently available average ticket price.

Airline and travel industry analyst Henry Harteveldt says that because Spirit tends "to operate just one flight a day on most routes, they're never going to challenge the major airlines for the corporate business traveler."

But, Harteveldt says, "There's always somebody out there who would like to pay less for an airline ticket than they're paying now. Airlines like Spirit and Allegiant and Frontier, I think, could pose a credible challenge, not only to larger network airlines but to even some of the low-cost carriers like Southwest and JetBlue."

As recently as May 2011, Spirit flew to just three destinations from Dallas/Fort Worth International Airport, a hub for American Airlines. Now, Spirit provides service to 17 cities from Dallas. It will add nine more destinations by next summer.

"It's a very different segment of the market that they target," says Luis Perez, Dallas/Fort Worth airport's vice president for air service development. Spirit is "a la carte," he says. "They have services you use as you need them. And, basically, that opens up a whole new possibility for people who normally would not travel if Spirit wasn't around."

Spirit's niche has proved profitable. For the second quarter of this year, its net income, excluding special items, increased 35.4%, to $35.3 million, compared with the same period last year, Pinson says.

Roughly 40% of the airline's revenue is currently coming from its myriad fees, Baldanza says.

On Spirit, not even a glass of water is free. The airline was a pioneer among U.S. carriers on fees, becoming the first to charge passengers to check a bag. And it sparked the ire of Congress when it began last year to charge for carry-on bags that need to be stowed overhead. That fee will shoot up to $100 starting Nov. 6 if a flier waits until the boarding gate to pay it.

A roomier "Big Front" seat, bought in advance, can range from $12 to $199. And in February, Spirit began tacking a $2 "unintended consequences fee" onto its one-way fares in response to a new Transportation Department rule that allows travelers to change their minds within 24 hours of booking a flight without penalty — a rule Baldanza says can ultimately lead to empty seats on flights and higher costs for all passengers.

Baldanza defends this à la carte strategy as a democratic way to help keep fares low. He says it "allows customers to not have to subsidize anyone else — to say I'm going to pay for what I use but not carrying the burden of other people's choices."

Spirit says even the fee for carry-on bags has been successful. It has sped boarding and deplaning, it says, and has allowed the airline to save almost 6 million gallons of fuel in the last year because of the lighter load.

Other airlines have taken notice. Most carriers now charge passengers to check a bag. And in April, Allegiant Air began to charge for carry-on bags that need to go in overhead bins.

Cheap tickets with no frills are also popping up at other airlines. In March, Delta introduced "basic economy" on a handful of routes where it competes with Spirit. Passengers flying non-stop between Detroit and four cities in Florida, including Orlando and Fort Lauderdale, can grab an ultra-low fare but can't reserve their seat prior to checking in at the airport. And with a few exceptions, the fare is non-refundable.

More seats, less room

But flying Spirit has its critics.

Jim Zipursky, managing director of an investment banking firm who lives in Omaha, says that he flew Spirit a couple of years ago when he had to travel to Santo Domingo on business.

He says it "was reminiscent of riding Greyhound back in the day."

"The experience was less than pleasant," Zipursky said. "I had only my single bag, so the extra fees were minimal, but I would avoid flying Spirit at all costs."

Jami Counter, senior director of SeatGuru, which informs travelers about airline cabin features, says Spirit is "as bare-bones as bare-bones can be, basically stripping everything form the flight experience ... charging for anything they view as an add-on. And part of that is cramming as many seats in the plane as possible."

Spirit acknowledges packing passengers in, putting 178 seats on its A320s. Those jets usually have 150 seats. Spirit's A320s also feature "pre-reclined" seats that can't be adjusted. And there's a 28-inch pitch, or the distance from the back of a seat to the front of another. Most U.S. airlines offer at least 3 more inches.

"That's a difference between having your knee crammed in the seat back or 3 inches for your knee to breathe," Counter says.

"The flight experience is probably the worst in the U.S.," Counter says. In his site's ongoing airline survey, only 21% of those who'd flown Spirit say they'd recommend it to others. That's the lowest rating of any U.S. carrier, he says.

Ads all over

Spirit also pushes the envelope when it comes to advertising.

It has ads throughout its jets, from the tray tables to the uniforms of its flight attendants. Its promotions have ranged from tacky to topical.

Most recently, it made light of American Airlines' woes when the carrier had to ground more than 40 Boeing 757s because some seats had become loose in flight. Spirit offered a 7.57% fare discount in a promotion that declared "we let low fares loose, not seats."

Despite its edgy ads and lack of customer service, it's unabashed about what type of service it offers: an inexpensive, no-frills ride from one place to the next.

"What I respect about Spirit is that they don't try to be something they're not," analyst Harteveldt says. "They don't promise you a flight attendant who'll fuss over you. They don't tell you the gate you'll be in will be a high-end lounge."

And at a time when a trip on most airlines means flying on a packed plane, where only a soft drink is free, some travelers feel Spirit isn't so unique.

"My main complaint is that they charge for carry-on bags," says Al Katz, a comedian who lives in Kissimmee, Fla. "Other than that, they compare with all other airlines."