Cherokee_Cruiser
Bronteroc
But a Trump president DOJ would not have prioritized stopping this airline merger.
Lawsuit filed against B6/NK
- Thread starter Box hauler
- Start date
But a Trump president DOJ would not have prioritized stopping this airline merger.
Cherokee_Cruiser
Bronteroc
I’m honestly shocked to hear Chapter 7 even mentioned. I had no idea things were that dire at NK.
Maurus
The Great Gazoo
How exactly can you make this claim? Sounds like speculation rather than fact.
BobDDuck
Island Bus Driver
It's not so much about the shape that Spirit is in but rather where things are right now, and that they are a ULCC. A leasing company is going to have no problem finding other homes for the planes so renegotiating leases won't work. All the operation costs are cut to the minimum by the nature of it being an ULCC so there isn't much to do there. You can't raise fares because the entire point of the company is to have low fares. You can't cut pilot pay too much (really the big "variable" expense) because the market is pretty good still so they will just leave, and then you don't have anybody to fly your airplanes anyway.
I really hope there is a way out of the corner for them, but the options are limited.
ASpilot2be
Qbicle seat warmer
I don't think the ULCC model is dead. It just needs adjustment. The Basic Economy fares have kind of hurt the dedicated ULCC airlines. The customer service has really hurt the ULCC carriers. I saw some pretty bad customer service. Word spreads and people don't want to deal with it.
Box hauler
Well-Known Member
Personally I don’t see Spirit folding but some sort of major changes are on the horizon one way or the other.
Cherokee_Cruiser
Bronteroc
I hope so!
We have status, credit card, FC, the whole works for NK. We use them exclusively for LAX-DTW/PIT for the past 5 yrs now since moving to California.
I know people give crap to Spirit, but so far it’s been decent for us. I hope they stick around!
We have status, credit card, FC, the whole works for NK. We use them exclusively for LAX-DTW/PIT for the past 5 yrs now since moving to California.
I know people give crap to Spirit, but so far it’s been decent for us. I hope they stick around!
CoffeeIcePapers
Well-Hung Member
Spirit’s last 10-Q was damning. Their YOY revenue took a huge hit. Bookings are down, while their prices remain low. There’s really not much of a market for their product anymore.
“Softer demand for our product and discounted fares in our markets led to a disappointing outcome for the third quarter 2023. We continue to see discounted fares for travel booked through the pre-Thanksgiving period. And, unfortunately, we have not seen the anticipated return to a normal demand and pricing environment for the peak holiday periods. Given these continued trends, we are evaluating our growth profile and our competitive position. We have already taken the first steps by modifying the cadence of our aircraft deliveries through the end of the decade and slowing our capacity growth in the near term. We continue to believe merging with JetBlue and creating a viable competitor to the Big Four US airlines is in the best interest of consumers, Team Members, and shareholders. We are prepared to make the necessary strategic shifts to enable Spirit to compete effectively in this new demand backdrop,” said Ted Christie, Spirit’s President and Chief Executive Officer. “Our Team Members are among the best and most innovative in the industry. I am confident that whether the Spirit of tomorrow is different from today or whether the aircraft tail says JetBlue or Spirit, their dedication to take care of our Guests and each other will not change.”
The executives realized they were sunk and tried to sell it off, but at this point, it might be too late.
CFI A&P
Exploring the world one toilet at a time.
Are you going to blame the P&W engines on Biden too? How many bankruptcies has Trump had? Sure there was opposition, but who appointed the judge?
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Murdoughnut
Well sized member
Scott Kirby kinda nailed it when he spoke of cost convergence. This is a good primer, but basically the argument is that ULCCs grew during the decade prior to the pandemic because their costs grew at a much slower rate than the legacies. Due to and coincidental to the Pandemic, this changed, with ULCC costs increasing at a greater rate. Theoretically, this led ULCC fares to increase, while the margin between legacy and ULCC fares grew closer. Spirit was particularly vulnerable to this change because their network strategy was to up against legacies in large and medium sized metros (versus say an Allegiant which focused on secondary airports in large markets, or secondary markets in general).
ULCC isn't dead, but there's been a surplus of ULCC seats in the market. It's why when Breeze came into the market with the goal of pinching traffic in unserved city pairs, it wasn't anticipating the fact that there wouldn't be many left when they launched service. Avelo has done comparatively better by utilizing an Allegiant model (their CEO is former Allegiant).
FWIW - my prediction for a year from now is Breeze is gone altogether, and DL picks up their 220s (this is a pretty common prediction among those who follow the business), and Spirit is at least a smaller carrier. It's the reason Frontier's stock saw an uptick yesterday.
The demand for ULCC capacity has likely reached a baseline level of growth (2-3%) which means that several carriers planning 10% annual capacity growth indefinitely were eventually going to run into this wall.
Roger Roger
Bottom of the list
It’s almost like planning your entire business model (or an entire economy for that matter) around perpetual growth greater than the rate of population growth and magically pretending that market saturation isn’t a thing is dumb and leads to these boom bust cycles that always seem to screw the workers and never the dudes in suits
Richman
JC’s Resident Curmudgeon
Assuming perpetual growth and the associated compounding in some variable(s) is a pretty classic newb mistake.
killbilly
Vocals, Lyrics, Triangle, Washboard, Kittens
I've heard a number of people speculate that Breeze will be gone altogether, but that Neeleman will sell those 220s to B6.
Constellation
Well-Known Member
This. I'm at B6 and we've definitely taken a goodwill hit over the last couple of years with OTP and the associated issues it brings. Not all is within our control of course, but a lot of it is. Free Wi-Fi and snacks are great, but ultimately people just want to get from A to B relatively on time before they start losing faith and looking elsewhere.
I had sort of relegated to the idea of 5-10 years of unprofitability and integration woes, but at the end it would be worth it with the combined network growth and QOL improvements more bases would provide. I have friends at Spirit and we were certainly looking forward to being under the same umbrella. Not sure what the future holds, but I don't think it's quite the doom and gloom scenario for Spirit that the analysts are predicting.
Regarding the DOJ - not sure an administration change would've had much an effect either, as the takeover attempt by B6 was reactive and hastily planned from the get-go. Spending months publicly stating the merger would be denied for anti-trust reasons probably didn't help their case, too.
"You don't need to be an antitrust attorney to see the issues here," Christie stated in several media interviews after JetBlue unveiled its bid in April, gatecrashing a deal he had clinched in February to sell Spirit to Frontier Group Holdings Inc"
Antitrust Challenge Stops United Merger With US Airways
"The government's opposition to the deal did not come as a surprise, and analysts said it seemed to indicate antitrust enforcement in the Bush administration would not differ much from the approach taken by the Justice Department under President Bill Clinton"
ClearedForOption
Psychiatric Help 5¢
The failed merger was going to wreak havoc on my retirement seniority and seniority during the time leading up to it, but for those that don't believe there was politics behind applying the Clayton act of 1914 to the proposed merger of 2 smaller air carriers wanting to compete against the biggest 5... seriously, I'm going to leave this right here:
I really didn't have 'the reality of living in the first 50% of Atlas Shrugged IRL' on my Bingo card for this one.
I really didn't have 'the reality of living in the first 50% of Atlas Shrugged IRL' on my Bingo card for this one.
BobDDuck
Island Bus Driver
Hawaiian sitting over there on an island with a 1 next to their name (while they still have a name anyways).
Cherokee_Cruiser
Bronteroc
I honestly think as a 2011 hire at JetBlue, you would have been just fine in the final SLI with Spirit, within a point of where you currently are.
roundout
VNAV monitor
Pray tell, what tool did you utilize to come up with this WAG?