Spirit Airlines: “Negative publicity” on customer service could hurt business

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Christopher Elliott

Spirit Airlines, as you might have heard, is trying to raise $300 million in a public stock offering. Here’s the Form S-1 it filed last Friday with the Securities and Exchange Commission.

It’s worth a read. Companies are required to disclose any risks to potential investors. And although this one seems obvious, it’s interesting to see how Spirit characterizes its own reputation, when it comes to customer service.

Negative publicity regarding our customer service could have a material adverse effect on our business.

In the past we have experienced a relatively high number of customer complaints related to, among other things, our customer service, reservations and ticketing systems and baggage handling.

In particular, we generally experience a higher volume of complaints when we make changes to our unbundling policies, such as charging for baggage.

In addition, in 2009, we entered into a consent order with the DOT in which we were assessed a civil penalty of $375,000, of which we are required to pay only $215,000 provided there are no further similar violations for one year after the date of the consent order, for our procedures for bumping passengers from oversold flights and our handling of lost or damaged baggage.

Our reputation and business could be materially adversely affected if we fail to meet customers’ expectations with respect to customer service or if we are perceived by our customers to provide poor customer service.

Our business and reputation could have been harmed by the business shut down during the June 2010 pilot strike and any perceived failure to meet customer expectations during the strike and related negative publicity from the strike.

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OK, then. I wonder how other airlines might describe their own risks, when it comes to customer service.

I wonder how passengers would describe it?

(Hat tip to Jared Blank for reminding me about Spirit’s IPO).

(Photo: Phillip c/Flickr Creative Commons)

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Christopher Elliott

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can't. He's the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, Forbes and the Washington Post. He also publishes Elliott Confidential, a critically acclaimed newsletter about customer service. If you have a consumer problem you can't solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter. Read more of Christopher's articles here.

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