Spirit Airlines abolishes change and cancellation fees, aligning with Frontier.

• Spirit Airlines will do away with change and cancellation fees effective immediately.
• Frontier has announced that it will eliminate change fees and offer bundles for previously a la carte options.
• The Biden administration's crackdown on junk fees has prompted a shift in budget airlines' traditional pricing strategy.

Frontier is abolishing both change and cancellation fees, effective immediately, following in the footsteps of its competitor, as part of a major overhaul of its longstanding strategy.

Under the new rule, Spirit now charges a flat fee of $75 for ticket changes and cancellations, regardless of how close to departure the customer makes the change.

"Spirit stated to CNBC that the new policy is one of the best in the industry because it applies to all guests. The company has other enhancements planned and will share more details soon."

Budget airlines are shifting their pricing approach by offering low base fares to attract customers, but generating more revenue through add-on fees for advanced seating, bottled water, and cabin baggage. In fact, ancillary revenue often exceeds the price of their tickets.

"Matt Klein, Spirit's chief commercial officer, stated on an earnings call that as the demand and competitive environments evolve, the company must adapt to remain competitive. He added that they will continue to experiment with new merchandising strategies that will alter their approach to total revenue generation."

While larger airlines have posted profits, both Spirit and Frontier are striving to regain profitability following the pandemic.

During the Covid-19 pandemic, most larger airlines, including Delta, United, and American Airlines, eliminated change fees for their flights, except for the cheapest, most restrictive tickets. However, Southwest Airlines does not charge customers a flight-change fee.

In addition to eliminating change fees, the airline announced on Friday that it would begin offering bundles that include additional options such as early boarding and checked baggage, which were previously available a la carte.

Spirit is also providing bundled packages with different prices that come with additional benefits, such as checked bags.

The Department of Transportation, under President Joe Biden, has been intensifying its efforts to eliminate "junk fees" and has recently issued a new rule mandating airlines to disclose add-on fees such as those for checked or carry-on baggage. However, this rule has been contested by several airlines.

The cancellation fees' termination was not linked to the new rules, as stated by Spirit.

The Biden administration recently introduced a new rule that mandates airlines to provide automatic cash refunds for cancellations instead of upon a customer's request.