Spirit Airlines barely averted bankruptcy (for now) and is talks again to sell itself to Frontier. They’re also selling planes.
The business model isn’t working. They don’t have long haul international service that customers have wanted to buy. They don’t have airline partnerships to sell those products on other carriers, or pick up connecting traffic from other airlines either. And they’ve been the downmarket product that’s very much out of favor, as customers have increasingly been interested in paying more for a better experience. (Spirit has even shifted its business model chasing that business.)
The troubled ultra-low cost carrier, with fewer planes going forward and bleeding money across numerous routes, is trimming its flying significantly. Adrian Waltz pulls the data on schedule changes every weekend, and caught a slew of Spirit routes being abandoned.
The latest Diio update had the following adds (Green), and removals (Red) of domestic routes by major carriers this week. pic.twitter.com/Mflkt0e2aH
— AdrianWaltz (@AdrianWaltz) October 26, 2024
They’re pulling back from Los Angeles (where JetBlue has already retrenched and so has American); Dallas; Fort Lauderdale; and more. They’re pulling back on several Tampa flights. Oddly, there are a few additions that are more than just a one-off adding a bit of Atlanta flying, as Southwest pulls down there. So they aren’t running away entirely from competition.
This all comes after massive cuts to their route network just a month ago. And it points to another problem. While eliminating unprofitable flying makes sense, new routes that you add are tough because if they were so great you’d have been flying them already. And it is difficult to cut yourself to profitability, because it usually means (1) using your resources less effectively, and (2) fewer seats to amortize fixed costs across.
Spirit Airlines has a problem. Of course, it’s the Justice Department’s making because the airline had a solution – a deal to sell itself to JetBlue. And it wouldn’t have mattered that its business model wasn’t a great product-market fit to the current environment, since JetBlue didn’t plan to keep the business model. Of course JetBlue only really needed Spirit (pilots and planes) to grow in ways necessitated by its partnership with American Airlines, which DOJ also beat back.
While the Biden administration won’t like consolidation in the ultra-low cost carrier market if Spirit is able to do a deal (perhaps in bankruptcy) with Frontier, that’s not always a choice you get to make. Alaska-Hawaiian made sense because any of the downsides of that deal are things likely to have happened anyway as a result of Hawaiian’s weakness.
You don’t just get to say you ‘prefer’ two strong ultra-low cost carriers in Spirit and Frontier as separate entities since Spirit presently neither of them is strong, though Spirit is weaker.
Frontier and Spirit had a deal to merger BEFORE JetBlue jumped into the mix and outbid Frontier that wasn’t willing to overpay – which B6 did by spending a huge amount on a merger that never happened.
The DOJ just allowed AS and HA to merge so the notion that the current administration is anti-merger is simply not supported by fact.
The DOJ did not like that B6 was going to eliminate a lower cost competitor – that was the problem.
NK is also selling a couple dozen A320CEO family aircraft so alot of capacity is coming out of its system fairly quickly.
NK is undoubtedly adding ATL flights because WN is exiting some of those routes and WN is giving up gates at ATL. NK would love to be able to gain some of those gates either for itself or for F9; ATL has gate usage requirements so NK could add flights but has to keep them.
So DOJ’s solution to increasing competition in the lost-cost market results in eliminating a major fraction of that market. Sounds like Kamala’s kind of economics.
Good. All these low-cost carriers need to go away. They have destroyed so many parts of the world because they have enabled mass tourism. Good riddance.
@ Gary — What’s not to love about Spirit? They offer drastically cheaper and a nearly equivalent product as Delta J on so many routes to/form ATL. I love saving my money rather than giving it to the crooks on Virginia Ave. Go Spirit!
A note to Mr Adrian Waltz:
Its spelt “Mardi Gras”, not “Marti Gras”….French for Fat Tuesdayas the last day before Lent begins which is marked as “Ash Wednesday”.
Karl John May. A lot of families depend on those jobs. You should be careful what you say.
@Gene, and that my friend, is why Spirit is going bankrupt. All those “drastically cheaper” flights were being financed by shareholder/bondholder value destruction, not by efficiency. Come December, it’s game over.
I saw UA is going to start using gate 69 in LAX for three widebody departures a day.
Part of it is T6 construction that is adding gates, but is the LAX schedule drawdown for B6 and NK also opening more T6 gate options.
The DOJ was mistaken that the ULCC business model is working. They were fixated on consolidation and raising prices are bad. It wouldn’t mattered what the admin did anyways if Spirit is going away.
Why do you seem to be happy about this?
People with money aren’t interested in crappy products with unreliable service. ULCCs serve a niche, but that niche isn’t growth.
My guess is CLT-DFW is going to go up in price.
@ Eduardo — They will drag along longer than December. Of course it is being financed by investor money. Love it!
Thank you Biden/Harris DOJ, for protecting us from a sure monopoly in the airline industry. That evil Spirit, they were sure to go from 5% market share to 80%!
Frontier is 6 billion in debt and would be insane to take on Spirit’s 8 billion. Their turn model seems to be making a dent in their debt ratio.
So many know-it-alls on here. It’s astonishing how many self appointed experts.
Please don’t fold. We don’t want those trash passengers coming over to United
I love Spirit. I save do much money flying them. All the elites on the airline sites are hoping they go away. They are just becoming smaller.
The ULCC business model needs to die if we are ever going to have a healthy, efficient and customer centric airline business. You can’t sell seats for $39 and provide a good service. The math simply does not work.
But too many Americans think they’re owed air travel. There was a time in which most Americans traveled by family car. I don’t expect and certainly do not demand any business to sell me a product or service below the cost to deliver that product or service.
Gary I disagree with your statement that folks want to buy up for a better experience. I see the main problem is that the majors have figured out a way to compete by offering a product similar to Spirit such as basic fares and that has severely impacted spirit and frontier. Also I think the best way to have competition in the airline industry is to eliminate cabotage which would allow foreign carriers to transport passengers with the United States. It is laughable that the justice department is investigating airline competition when the very best way would be to allow foreign carriers to transport passengers within the USA. One study I read predicted that fares were dropped 17% on average if this were the case. Of course we all know that will never happen because the airlines have deep pockets when it comes to political contributions so they would never get the votes in Congress to pass such a law which would be similar to the European Union. Another reason for term limits.
It would be unfortunate if they disappeared. I’ve flown them, when convenient, and never had a problem.
Gary, you stated, “Spirit Airlines has a problem. Of course, it’s the Justice Department’s making…” That’s not true. Spirit’s problems began long before the Justice Department stopped it from eliminating itself. The current shameful product goes back to the Ben Baldanza days and it’s taken years to get rid of that image. They have worked on cleaning that image up, but the product and plethora of fees remained. This was not caused by the Justice Department.
Spirit’s issues, just like jetBlue’s issues are self-inflicted.
The issue with the “DOJ blocked a failing competitor merger” argument is that Spirit/JetBlue..never made that argument! At least not until after the trial. This is based on a personal conversation with someone who worked on the case. The parade of anti Biden/Harris/DOJ comments is just not rooted in reality.
Thank the Biden/Harris Administration for killing Spirit and eliminating a competitor from the aviation market, which is in their twisted view pro-competitive. Insane.