Spirit Airlines announced a significant change in its policies by eliminating both change and cancellation fees effective immediately, just days after Frontier Airlines made a similar announcement. This move marks a notable shift in the pricing strategies of the country's major discount carriers, aiming to enhance customer satisfaction and stay competitive in a rapidly evolving market.

Previously, Spirit Airlines charged between $69 and $119 for ticket changes and cancellations, depending on how close to the departure date the customer made the change. "This new policy is among the best in the industry because it applies to each and every guest," Spirit said in a statement to CNBC. "We have many other enhancements in the works and look forward to sharing more soon."

This change represents a substantial shift from the traditional pricing models of budget airlines, which have historically relied on low base fares to attract customers while supplementing revenue with additional fees for services such as advanced seating assignments, bottled water, and cabin baggage. Ancillary revenue from these add-ons often exceeds the airlines' ticket prices, making it a crucial component of their business models.

"As we continue to see the demand and competitive environments develop, we know that we must also change with the times," said Spirit’s Chief Commercial Officer Matt Klein during an earnings call earlier this month. "We will continue to test out new merchandising strategies, which we anticipate will change how we think about the components of total revenue generation."

Both Spirit and Frontier are striving to return to profitability following the downturn caused by the Covid-19 pandemic. Larger airlines, which offer both basic fares to domestic destinations and expansive international networks, have already reported profits. During the pandemic, major airlines such as Delta, American, Alaska, and United eliminated change fees for all but their most restrictive tickets. Southwest Airlines has never charged customers a flight-change fee, setting a standard in the industry.

In addition to eliminating change fees, Frontier also announced it will begin offering bundled packages that include add-on options such as early boarding and checked baggage, which were previously only available a la carte. Spirit is following a similar path, offering bundled packages with various perks, including checked bags.

President Joe Biden and the Department of Transportation (DOT) have been actively targeting what they term "junk fees." As part of this initiative, the DOT issued a new rule requiring airlines to be transparent about add-on fees such as those for checked or carry-on baggage. This rule has faced challenges from several airlines, but it signifies a push towards greater transparency and fairness in the industry.

Spirit Airlines clarified that the elimination of cancellation fees is not directly tied to the new DOT rules. The Biden administration recently issued another rule mandating that airlines offer automatic cash refunds for cancellations rather than responding only to customer requests.

The elimination of change and cancellation fees by Spirit Airlines represents a customer-friendly shift in the industry, aligning with broader trends among airlines to improve transparency and reduce additional costs for travelers. By adopting these changes, Spirit aims to enhance its competitive edge, attract more customers, and increase overall customer satisfaction. The move is expected to not only boost customer loyalty but also encourage more travelers to choose Spirit Airlines for their travel needs, ultimately contributing to the airline's long-term profitability and market position.