Spirit Airlines

We can only imagine what must have taken place at Spirit Airlines.

Mr. Lacky from the CEO’s office must have called Mr. Spindoctor from the marketing department and the conversation went something like this:

Mr. Lacky: “Hey ‘Spin’, the boss is complaining that revenue is down this quarter and wants you to do something about it.”

Mr. Spindoctor: “Sure Lacky, I think there are two dumb economists on the Ft. Lauderdale beach I can contact to see what’s going on.”

Mr. Lacky: “Do it now and get a campaign going ASAP!”

The marketing department does indeed call the dumb economists. That conversation went something like this:

Ms. Anonyme: “Hello, who is it?”

Mr. Spindoctor: “I am looking for one of the two dumb economists.”

Ms. Anonyme: “Mike is out on the water trying to master the longboard what can I do for you?”

Mr. Spindoctor: “It's Spin calling from Spirit Airlines. I wonder if you can tell me why our revenues are down this quarter so that I can develop a marketing campaign.”

Ms. Anonyme: “Well, besides the fact that your pilots have been on strike, there is this little issue about reports of oil floating up on the beaches in and around the Gulf states. This would probably reduce demand for your services in Florida.”

Mr. Spindoctor: “Oh, so if we reduce our prices then demand will go back up. Have I got that right?”

Ms. Anonyme: “Not quite, but close. One of our first year students can explain the error in your statement. The number of tickets you sell will depend on the price elasticity and on the oil elasticity of demand. You may be able to reduce the price enough to offset the reduced demand because of the oil. You may also be able to increase the demand if you can give people a good enough reason to visit Florida in spite of the oil spill.”

Mr. Spindoctor: “Okay great. I got it now. Thanks.”

Spirit Airlines advertising campaign?

“Check out the oil on our beaches. You won’t be disappointed.”

Apparently, not very many people saw the humour. Given our fondness for Florida, we did, but you might have to read the CBS story for insight. (Click here)

Click here to find out more about Spirit Airlines.