Spirit Airlines is filing for bankruptcy
wsj.com
wsj.com
Khan and pals, as expected, blocked; a judge concurred [4]. Jet Blue pulled its bid [5]. Then Frontier did, too [6].
Nobody was right. But a lot of folks were wrong, some more than others. It's a black eye for direct-democratic shareholder rights: the board made the better call.
[1] https://www.bloomberg.com/opinion/articles/2022-06-28/don-t-...
[2] https://www.reuters.com/markets/commodities/spirit-airlines-...
[3] https://www.bloomberg.com/opinion/articles/2022-07-27/spirit...
[4] https://www.reuters.com/markets/deals/us-judge-blocks-jetblu...
[5] https://news.jetblue.com/latest-news/press-release-details/2...
[6] https://www.wsj.com/business/airlines/spirit-airlines-moves-...
But this particular decision didn’t make sense from the beginning. There are 3 major airlines in the U.S. already (4 if you include Southwest). Those guys are also too big to fail.
Everyone else is competing against them in a highly uneven playing field. You need to let the remaining players act in ways that make sense. Even if they consolidate down to a 4th big player that’s not a bad thing.
That’s because of the additional peculiarities of the airline industry. There’s always investors willing to go into it for some reason. But more importantly, you are completely dependent on airplan manufacturers which is a highly monopolized backlogged industry that rewards bigger players.
Is there actually enough information to conclude that for sure?
Maybe there is, but based solely on the info you mention it could be the case that both options were equally likely to get blocked by the FTC, in which case choosing the option which offered a higher price was the better choice even though it didn't work out. Or maybe it was only 0.1% more likely to be blocked, while being significantly more than 0.1% higher price meaning a better EV even though both options had a chance of failing and a chance of succeeding.
I feel like you may well be right, but equally may well be doing the equivalent of looking at someone who put a roulette bet on black and lost and concluding based on that single spin that the person who bet on red was more intelligent.
Echoes my opinion on Elon Musk's Twitter takeover: we would be better off if the SEC had not done its job and ensured the promised purchase went through.
So I don't think the article title is intended to mislead.
Regardless of the intent, it is a misleading rewording of the original article title.
It's been great for the poor and middle class. Tickets are cheap, before taxes and regulatory charges. Go to Europe and you see what competition can truly bring: <$50 tickets.
And the same for San Francisco: https://www.google.com/travel/explore?tfs=CBwQAxoQKABqDAgDEg...
Based on these I think airfare in the US looks better, especially considering the longer distances. Barcelona-London is the same price as San Francisco-Denver but 75% as far for example.
Your data is, more or less "if you ignore the budget airlines, there are few cheap flights from Barcelona", which is true, but not particularly useful. Dublin<>Barcelona, say, tends to be 25eur each way when there's not much demand, including taxes and charges (though you'll pay extra if you want to take _bags_).
EDIT: Ah, I found the problem (I suspect this is a bug in Google's flight thing). They had carry-on bags set to 1. If you set it to 0 it shows flights (mostly Ryanair) to almost everywhere in Europe. It may be getting tripped up by Ryanair's wonky treatment of carry-on bags (you can add 'priority boarding', which gets you a carry-on, as an extra fairly cheaply, but if you want it as a headline feature it comes bundled with a bunch of other stuff).
Even with this option off, though, it's still not showing easyJet.
"Basic economy" as a category is only about ten years old, and most people don't fly much.
Mine were all great (enjoyed dozens of flights with them)..clothes & travel stuff in a book bag or sometimes in a vacuum seal bag then in book bag and stuff book bag under the seat. Saved hundreds and flew a lot more!
No, it isn't. It's uniformly terrible when you choose the cheapest option which coincidentally is the driving force behind air travel reducing extra comforts.
In that regard, Spirit was refreshingly honest because they didn't even pretend to care.
That depends on how you define "Europe".
Europe-the-continent, Athens to Reykjavik is roughly the same distance as NY to SF.
If you define Europe as "Any territory belonging to a European country", then the longest domestic flight is between Paris and Saint-Denis, Réunion. It's about 9000 Km, which is twice the distance between NY and SF.
Tenerife is quite a popular destination, and is also relatively far from the mainland.
Spirit is no different. They hate you and they make sure you know it.
I can't vouch for frontier I've never flown with them ..not yet at least.
If you try to get the things without paying, eg bringing too much baggage, that's when they fleece you. But just follow the rules and it's fine.
How were your reclining seats? And how long were your flights?
https://www.npr.org/2013/09/03/218625844/spirit-airlines-see...
Pilot salaries and fuel costs both skyrocketed since 2020, and at the same time the US got significantly richer and people got more of a taste for luxury. Expensive, premium things have never been doing so well in the US. All of a sudden, you have a double whammy of low-cost carriers being forced to raise prices and get less competitive, while consumers are more inclined to pay for luxury.
Not to mention - American LCCs were never in that great of a position, structurally, vs the European LCCs. Ryanair thrives on quick turnarounds, cheap airports, cheap pilots, short flights and high population density. The US has none of those. The EU's population density is 112 people/km2 vs 36 in the US, even cheap US pilots are very expensive, turnarounds are slower, and there are few budget airports where the people live. The Port Authority is spending 25 billion dollars on revamping the three NYC area airports. Meanwhile Europe is full of cheap semirural airports like Frankfurt-Hahn, where the most recent renovation cost in the single digit millions. Where do you think you can land a 737 for cheaper?
Arguments that try to compare population density are invariably wrong. Especially so with flights that go to population centers.
[0] https://www.indexmundi.com/united_states/airports_with_paved...
[1] https://www.indexmundi.com/european_union/airports_with_pave...
> Frankfurt-Hahn or Paris Beauvais
Note that they are close to dense population areas Frankfurt and Paris. Not part of average density areas.
I am just saying I have seen the pattern occur repeatedly where "population density" is used to attempt to prop an argument: density is averaging and is often meaningless.
Perhaps a simpler way to convince you of the importance of population density to today's LCC model: Take a look at a map of where Ryanair flies. Under the 58th parallel, on the entire European continent, there is only one place over 250km from a Ryanair airport! Look at all the tiny airports, Limoges or Valladolid or Brive or Osijek or anywhere really. Ryanair flies to 250 airports and they do it with hundreds of 737s operating like clockwork, one short flight to another, not a tiny regional plane to be seen. Meanwhile, Delta flies to a similar number of airports in the US (in the 200s) but the majority of those are with small regional jets which are way less cost-effective than 737s; if you're an LCC, that means that you can forget about flying there. Obviously Delta is flying all those regional jets not for fun, but because they can't fill a 737, because the local population is not large enough to support one. I don't see how population density is not a core part of the issue here.
Define a node as a population center (say NYC) and then edges as cities (Boston, Philly, DC, Pittsburgh) with the weight being the population of the respective city. Average the populations for each mode and then average those averages.
The idea of this number is it would represent the average population of points of interest.
Are they? Genuinely curious. With inflation rates we’ve seen lately it’s been my impression that the opposite is the case.
That begs the question, how much cheaper is a Spirit flight compared to other carriers for a given itinerary? In my experience, it's maybe $50-$150, compared to a trip that might cost $500-$2000 overall. It's not like fliers are choosing between Spirit and first class on Delta. They're deciding whether or not to spend an extra ~$100 to be slightly less miserable on a trip that may be one of their largest single expenses of the year, and maybe their only trip of the year.
I feel like this is true for the entry and value priced offerings in a ton of industries.
> single yearly vacation
This is genuinely sad and unhealthy.
I've been on planes / trains / coaches that are expected to have them, but who had faulty outlets at my seat for that particular journey and I wasn't able to use them. So I just have a small battery pack (little bit bigger than a pack of cards), and a big one for laptop recharging, and I take one or both (plus my slightly bigger than a lipstick one that's light and fits easily in pretty much every clothing pocket I own) depending on the trip I'm going on, meaning no added complexity as it's just like remembering to take my laptop's power cable, and I no longer have to spend any time thinking about whether the transport will or won't have a power source for me.
I appreciate what works for me won't be the preferred solution for everyone, but for me it definitely leads to less overthinking per trip not more. (And personally I don't notice the added weight of these batteries in my bag; and I would want them for travelling even if I could be guaranteed every flight & train had working power outlets, as I've had times when they were useful to have when visiting a client's offices, or when staying in a hotel with a dodgy outlet, or when going hiking an nowhere near power outlets - so in my case it wasn't even an additional cost caused by not trusting planes to provide a good power supply.)
Low-cost companies targeted people with low disposable income at the cost of comfort.
People who used to have low disposable income have now not enough to travel by plane (or at all), and people who had enough to use standard companies have still enough to use them.
A very interesting fact is that median income grew in the US (less than average, but close enough). The standard deviation (from memory, if this isn't the translation of 'écart-type' I'm sorry) grew also, which indicate that the recent economic 'boom' the US experienced since the end of covid took more than 50% of us citizen with it, but clearly not a huge majority. Germany experienced a very similar thing since 2012. To my knowledge, in Germany it was most likely caused by a transfer from progressive taxation to a fixed one, reducing purchasing powers of people with low disposable income. In the US it seems it's a direct income issue.
By contrast the US has the worst airlines out of anywhere I fly. Even the regular non budget ones are bad. Frontier and Spirit are the only airlines on my "never ever again" list, no matter how much cheaper they are. I've never felt as dehumanized, like cattle to the slaughter, as when flying on them...
Examples? I’ve done every mode of transport in Europe. The planes are your buses.
The US airlines are generally tolerable, but they just feel... bad. Like they don't really care about their customers at all and are just trying to milk you for every last cent and would really prefer that you simply not be a customer if you're not satisfied, so that somebody else can take your place, rather than trying to make you comfortable. Everything is cramped and dirty and in a rush and poorly run all the time. By contrast, the processes in Europe and Asia are so streamlined and the staff were much nicer.
However, Frontier and Spirit were especially atrocious. I've never known anyone who was willing to fly them more than once. "Never again" is a common refrain I hear whenever I discuss them with other travelers, or even just walk past one of their lines in the airport. Ugh.
> I’ve done every mode of transport in Europe. The planes are your buses.
Sorry, what do you mean by that? Not sure what "planes are your buses" means?
Over here, some of our airlines are about as bad as our (terrible) Greyhound buses. Some are even worse than that. I never had that kind of experience abroad.
I've never had any problems with American flight attendants, though. Or even the planes. I mostly just want to get there, I bring a book or a programming project, and all I need is a seat. Low expectations, I guess.
I’ve not done it more than a handful of times so don’t want to say it’s universal but Chinese airlines do not compare favorably to American ones in my limited experience.
Which carriers exactly? None of these things are true. Most ULCC have thin plastic seats that don't recline, no IFE, no Wi-Fi, paid food and drinks (good luck getting even a cup of water), charging for selecting seats even at check in, same restrooms (they don't choose the restrooms), policies that include steep fees if you have to interact with any staff, draconian adherence to sizes of bags that will clearly fit just fine but they need to make extra money somehow, super thin fleet that is all but guaranteed to leave you stranded if there is IRROPS, flying out of airports with limited amenities located far from civilization, websites and apps that barely work, the list goes on and on.
There are only two benefits: they are cheap and if shit goes wrong, EU261 will compensate you. That's it.
However the new extra thin seats of ryanair do really feel hard after an hour or two. I don't mind the lack of recline but they need more padding IMO.
TL;DR: several factors.
- Fuel prices are up (for everyone)
- Spirit having so many flights out of Florida has hurt them (climate change with heavy storms more common, and ATC staffing particularly bad in Florida, so operations has been harder)
- Leisure travelers have been willing to spend more for luxury travel in the past couple years and Spirit doesn't have a real offering to that market segment
And what's the difference is cost anyway? Maybe $40.
Spirit has a credit card from Bank of America [2], but it's terrible outside of the introductory bonus miles offer, which for an airline card gives you a lot of miles for a low intro-spend. Other than that, you get priority boarding and that's about it. No real other perks. I got it, and was probably flying on Spirit more in a few months than any other time in my life because I was traveling last minute to see my late father while in hospice and Spirit was far and away the cheapest flights for next-day flights.
As for status, you have to basically fly weekly roundtrips to get any perks (free bags, etc.) [3]
On top of all that, most business travelers won't take Spirit, and it's often not an option in Concur/Biz travel middleware because companies know the hidden fees so it's often not worth listing for budgeting against known airlines.
[1] https://www.theatlantic.com/ideas/archive/2023/09/airlines-b...
[2] https://www.bankofamerica.com/credit-cards/products/spirit-a...
But at least they made air travel more terrible.
Ive always thought that the pricier airlines have spent huge amounts of money on social media marketing to give Spirit a very bad rap using Tiktok, Reels, etc to create negative content about them. If half of such is true (ive seen the CEO of Spirit say something to that extent) their marketing dollars were unfortunately well spent!
Europeans with adult stable jobs fly Ryanair and Easyjet because this is the best that they can afford on European salaries.
Not really. The difference isn't even that big compared to legacy European airlines these days. Ryanair doesn't do bottom barrel (eg €5) pricing anymore and the legacy airlines also charge for extras now like checked luggage and sometimes even carry on.
I just fly Ryanair when it's convenient due to time and routes. I honestly don't care which airline I'm on. In fact I like Ryanair because I can just buy the foods and comforts I want like priority boarding instead of having to get some pompous frequent flyer card from the legacy airlines.
Nonsense. It's because they're sufficiently cheaper on certain routes, and when you're taking multiple trips a year, the price difference accumulates; and also because they have very good point to point service, so if you live in a non-hub for the national airline city - a Bordeaux, Lyon, Birmingham, Manchester, Edinburgh, Hamburg, Köln, Varna, etc, your flight options are a flight with a connection in the hub, or a direct flight with a low cost carrier to a destination.
I've never once seen people fighting or screaming on a cheap flight.
For long haul I have no problem going with better airlines (which still means European or Asian over US carriers every time...).
I'm upper middle class and love taking friends / partners on trips. Always used Soirut without any shame as I do not believe much of what I see on social media tho before I flew Soorut all that negative crap pushed most likely by their competition had me worried about my first flight with them. After it made me realize oh all that crap on the Internet..a lot of it is made up trash like many things u see online and in the media. Don't trash something til u tired it and with Spirit anyone expecting the same service as on u get in pricey airlines isn't using their brain to define what an ultra low cost carrier is.
https://en.wikipedia.org/wiki/Spirit_Airlines#2022_to_2024_a...
Good customer service counts for a lot, it's not just ticket prices, otherwise Spirit would not be having these financial issues.
And even with that, they're losing money and going bankrupt. The big 3 carriers in the US are propped up by their loyalty programmes which are surprisingly profitable; Alaska is the only other carrier doing good and expanding. Everyone else is struggling in some form.
Instead of giving two smaller airlines a chance to work together and compete against the "Big Four", denying the JetBlue merger all but guaranteed that Spirit would have to file for bankruptcy.
The company's assets are worth more than the company itself so I wouldn't be surprised if it simply liquidates with the result being no fares (because no Spirit airlines), no seats (because no Spirit airlines), and millions of customers with less of a choice (because no Spirit airlines).
The judges ruling was uneducated and poorly based, especially considering how the big four got to be so big. It was politically motivated to make the party/gov look good, but the long term results were good for nobody. I lost money betting on the merger, it makes no sense it got blocked.
[0] https://www.investopedia.com/ask/answers/differences-between...