This one was likely allowed to fail because the big carriers wanted them to fail and likely put pressure on the administration to not bail them out. Now those larger carriers can up their prices because they don't have to compete with Spirit. And, if it comes to it, they will get bailed out.
RIP Spirit Airlines
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338win
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Spirit merger was a sacrificial lamb. It gave the dems a way to say they were against consolidation of businesses. It cost them almost nothing and they could point to it as a win. No way the legacies didn’t have a hand in the merger failure. That combined with poor management and the engine fiasco made it impossible to stay solvent. It sucks for the employees but airlines are a volatile business.
don’t need an airline when the kiddos are tradwifeLarping for big bucks.
David58
Well-known member
Failing businesses should be allowed to fail. Spirit did not have a sustainable model. But what they did do was carry on what Southwest started - not no frills, negative frills. And notice how SW finally turned loose of their no frills operation - you can still go with no frills, but they realized that some of us will pay a few dollars more to have a slightly more tolerable travel experience.
David
ID
Agreed that businesses should be allowed to fail. If that was the case we probably wouldn't have an airline industry right now after COVID. What irks me is that the cheaper option doesn't get a bailout, but the big carriers do, which will ultimately be bad for consumers because the big airlines don't have to compete with cheaper options, so now they can raise their prices (which they're doing because of rising fuel prices) and make record profits. Air travel sucks.
Bonasababy
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Far from accurate as to the final death blow.
And the partisan finger pointing is not going to play when people realize that Spirit put downward pressure on most other airlines in the country--prices will rise from the increase in cost of fuel AND due to less competition and pressure to lower prices. Double whammy for US air travelers
Nameless Range
Well-known member
Saw this a couple days ago. Big plane for long flights and a lot of passengers, but that seems like a lot of dough.
noharleyyet
Well-known member
Spirit Airlines execs get millions in bonuses after agreeing to stay through its 2nd bankruptcy in a year
Spirit Airlines CEO Dave Davis was paid $2.9 million for agreeing to stay through the restructuring. Some flight attendants earn less than $30,000.
finance.yahoo.com
Nameless Range
Well-known member
Spirit Airlines execs get millions in bonuses after agreeing to stay through its 2nd bankruptcy in a year
Spirit Airlines CEO Dave Davis was paid $2.9 million for agreeing to stay through the restructuring. Some flight attendants earn less than $30,000.
Tale as old as time.
"Why's the rich man busy dancin', while the poor man pays the band?"
SAJ-99
Well-known member
The other way to look at it is Spirit saved money in one way by not hedging fuel costs and passed that savings along to customers. It was unable to make it because they didn’t have the cash flow to make it when fuel costs doubled in 45 days. I tend to think Spirit understood the risk it was taking but customers didn’t. They do now. Don’t worry, there will be more discount airlines created eventually.
SAJ-99
Well-known member
Also, i find it hard to feel sorry for Spirit customers or US travelers in general. With the latest news, Spirit filed for bankruptcy THRICE in 18 months. So customers literally booked a flight on a bankrupt airline. Also, the American traveler used Spirit because it was cheap. Demanding the lowest cost for everything has a downside.
Mallardsx2
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They sucked anyhow. Probably why they went under.
Bonasababy
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Missing one of my points. I have never flown Spirit. But the fact that they flew out of a major airport we usually use when flying helped keep prices of the airlines we did fly cheaper. Perhaps LA/NY/ATL etc. have a full force of just about every airline flying out of their airports--we don't. The cost of starting a new budget airline is incredible--and in this economy who would even want to try?
We are losing Sun Country in a merger too, a good airline with reasonable service. Experts saying the merger will cost in increased flight costs as well.
Spirit has been on my Do Not Fly list for a few years.
SAJ-99
Well-known member
Maybe it did. Maybe MSP as a Delta hub allowed it to reduce prices on competing routes with Spirit, but I can't say. I know that scale matters in that industry, particularly when your largest costs are labor (current and retirement) and fuel. Bigger is better. Kind of that way for every industry. Airlines are a single-digit margin business and Spirit was fairly large so I just write it off to bad management (before and with the current CEO). Warren Buffett exited airlines stocks in COVID and said it's a terrible business.
Tale as old as time. There is no shortage of over-confident businessmen who think they can do it. Kind of like banking.
