# Airline Loyalty Programs Didn't Kill Spirit Airlines. Here's Why That Argument Falls Apart.
A recent New York Times essay attempts to pin Spirit Airlines' 2024 collapse on frequent flyer miles, claiming loyalty programs gave larger carriers an unfair advantage that squeezed the ultra-low-cost carrier out of business. The theory sounds plausible on the surface. In reality, it misdiagnoses what actually happened to Spirit and misunderstands how the airline industry operates.
Mark Kahan, a former Spirit Airlines executive, authored the piece arguing that airline miles allowed legacy carriers like American Airlines, Delta Air Lines, and United Airlines to undercut competitors on pricing while offsetting revenue through loyalty redemptions. The logic follows that Spirit, which lacked a robust loyalty program comparable to major carriers, couldn't compete on the same financial footing.
This oversimplifies Spirit's actual problems. Spirit filed for bankruptcy in November 2024 after years of operational struggles, mounting debt, and relentless competition from better-capitalized rivals. The airline lost market share to ultra-low-cost carriers like Frontier Airlines and Southwest Airlines, which offered either comparable fares or better service. Spirit faced higher fuel costs, aging aircraft, and repeated operational disruptions that damaged its reputation. Loyalty programs played a minimal role in any of this.
The loyalty program argument also misunderstands basic economics. Frequent flyer miles represent revenue airlines already earned from customers. Airlines sell miles to credit card companies, transfer partners, and other sources. When someone redeems miles for a ticket, the airline doesn't lose money. It captures revenue upfront, typically months or years before the ticket gets used. This doesn't create an unfair financial advantage in pricing wars. It's simply a different revenue stream.
Larger carriers do benefit from scale and loyalty programs, but not because miles are some hidden subsidy. Scale matters because major airlines operate hub-and-spoke networks that generate network effects. A passenger can reach far more destinations through American, Delta, or United than through Spirit. That network value drives loyalty, not the other way around. The loyalty programs reflect existing competitive advantages they already possessed.
Spirit's real problems were operational and strategic. The airline consistently ranked at the bottom for customer satisfaction across the industry. Its routes competed directly with better-funded rivals that could absorb losses during price wars. Spirit carried more debt than peers and lacked the financial cushion to weather economic downturns or invest in necessary fleet upgrades. These are the actual culprits.
The essay also ignores that loyalty programs exist across the entire ultra-low-cost carrier space. Frontier operates a loyalty program called Frontier Miles. Southwest has Rapid Rewards. Neither program proved powerful enough to prevent their own financial struggles at various points. The difference in outcomes between these carriers comes down to operational efficiency, route selection, and cost management, not loyalty program sophistication.
For travelers, this debate matters because it shapes policy discussions around airline competition. If regulators wrongly believe loyalty programs killed Spirit, they might pursue misguided restrictions on frequent flyer offerings. That would harm consumers who actually benefit from award programs and elite status benefits. The real regulatory focus should remain on pricing transparency, operational standards, and preventing actual anticompetitive behavior among large carriers.
Spirit's failure represents the natural outcome of an ultra-low-cost carrier that couldn't compete on fundamentals. Blaming frequent flyer miles obscures this reality and distracts from genuine airline industry issues that deserve scrutiny.