Spirit Airlines is known for its terrible service and has had the lowest rank, for all six consumer surveys, conducted of airlines. However, their profitable financials say otherwise. It is a conundrum as to why people continue to fly on an airline that provides poor customer service, at least until prices are compared to other companies. Spirit Airlines has significantly cheaper prices than that of its competitors; this comes to surface with the poor service many travellers receive. Although, the price difference is enough that many travellers continue to choose Spirit because of the savings. Cutbacks in all areas of the business model allows Spirit Airlines to offer cheaper than average prices.

This company has effectively used Porter’s Generic Strategies to place themselves in the optimal target scope. Spirit Airlines is situated in the cost differentiation category, a wise decision that is shown in its financials and growth. This point of difference is proving to be the main reason why customers will continue to choose Spirit Airlines despite bad service. For the travellers of Spirit, lack of service is almost expected and is a consequence many are willing to accept, if it comes with savings. It will be interesting to see if Sprit will be able to expand and over take a larger but similar company, such as South West Airlines, in the future.

Read the full article here: http://www.economist.com/blogs/gulliver/2014/11/spirit-airlines