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.