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”.