Unless this initiative will turn into a credit card company (which nobody likes or wants to do) it won't go anywhere
Private equity will likely sell the company for parts. There is no operational improvements for cash flow that they can do.
Useful watch (skip to 2:20): https://youtu.be/ggUduBmvQ_4?si=cyysP7aH_CIEDZRq
Company makes too little money: "there's no money in this industry! They need to be a regulated utility!"
I'm not saying that this a better outcome (power companies have their problems too). I was just commenting that this issue parallels the historical solution that was applied to utility companies.
Honestly, with the looming climate crisis, we should probably just let them fail one by one and let alternatives (who can actually be profitable) take off.
I'd also feel similar I'd my primary water, electricity, or internet provider was on the brink of failing due to "free market pressures".
Because the majority of the HN crowd defaults to "a massive government bureaucracy would do this better" unless it's even tangentially related to their industry in which case it's "regulations bad" and "move fast break things."
For a much deeper dive on this, see https://www.complexsystemspodcast.com/episodes/gary-leff-fre...
(there's a well-formatted text transcript)
This sort of thing all the time when (for example) a movie lover opens a movie theater. Running a profitable movie theater is a lot less about movies and a lot more about maximizing concession revenue.
Best not to generalize.
The RyanAir CEO was even quoted that he expected some tickets to be come "zero-fare" Link: https://www.theguardian.com/business/2016/nov/22/ryanair-fli...
The point stands, airlines don't make money on flights. Flights are loss leaders.
Spirit was designed to be ultra low cost, which attracts flyers that are much more price sensitive. Higher Jet A costs means higher ticket prices, which means lost customers, which means lost revenue. Pulling a JetBlue and adding higher tier product offerings to attract the business travelers that _actually_ makes money for airlines would've required an overhaul of their entire business, which they couldn't afford to do.
I agree that Spirit will be chopped up by whoever buys them. It happened to Braniff, PanAm, and a whole bunch of other airlines that weren't thrown a lifeline.
(JetBlue tried to acquire Spirit to prevent this outcome, but the acquisition didn't pass antitrust. Everyone knew that that acquisiton failing was a death sentence to Spirit, but it was what it was.)
But that's not necessarily a bad thing. If the company is worth more to the market and society when sold as pieces, so be it.
Before them Alaska Air was similar, and is now similarly bad.
Having the customers actually own the airline seems like a reasonable approach. The trick is kicking all the assholes off the board, so they can’t fire leadership for treating customers decently while turning a sustainable profit.
American Airlines has the largest loyalty program.
In last week’s report to shareholders they project it will grow to $1.5B in pre tax revenue, against a total 2025 pre tax revenue of $54bn (50bn passenger revenue).
The core business of airlines is still airlines. Optimizing TRASM & CASM, with tremendous effort on upsell and cross sell of premium services (seats, bags, food), at every point in the passenger flow.
This is true for American Airlines: https://viewfromthewing.com/new-report-says-aadvantage-is-wo...
If that's the case then how RyanAir survived and is thriving?
Some flights make money.
Some flights lose money.
Some finance structures make money while looking like losses to acrue tax benefits for other activities.
Sometimes the money is being made by holding companies not operating companies. Sometimes the assets are worth more as spares than operating.
All companies are complex. I do not think "flights don't make money" is true for all airlines, all flights.
Case in point: Old Perry Mason shows where characters regularly drive to the airport, pay for a ticket and get on a plane. Flying was actually faster than driving back then, even when measured by time between deciding to leave and arriving at destination!
(Yes, tickets used to cost a bit more. Whatever. Figure in the price for camping in the airport for 4-5 hours, and then tell me the current system is cheaper!)
But you have to follow the same model: use cheaper airports, a single modern aircraft type to simplify operations, high turnaround speed, charge a lot for extras.
Southwest has 30B in assets and makes $441M in profit. Like most airlines it’s a miracle of modern economics and should practically be considered a charity or a nonprofit. You would make more in treasuries or corporate bonds.
https://en.wikipedia.org/wiki/Largest_airlines_in_the_world
Obviously their model is different to the big American carriers. Perhaps there’s something about the homogeneity of the US domestic market compared to the EU market that favors loyalty based airlines versus budget airlines.
Member-owned co-ops don't need to make money. Structuring an airline as a member-owned co-op is not a fundamentally-stupid idea.
Even in this "airlines as point program companies" view of the world, flights don't make money in the same way that electricity going into data centers don't make money. It's a place where you have major costs and you want to try and gamify it, but at the end of the day it's pretty necessary for successful operations!
Consider why airline points even work as a model in the first place! Airlines have blackout dates and don't offer every seat in a plane for points because _they can make money selling a seat for more than what the points are worth to them_.
I don't get it. Why should they have been turned into utilities? Just because the current iteration loses money?
Please be aware that airline pricing is endogenous. That means, it's not set from the outside, but a reaction to market conditions and feeds back into market conditions. Eg airlines might be on the edge of profitability at time X, but when at time Y fuel prices drop a bit (or rise a bit) that doesn't mean that airline will suddenly all make lots of money (or all go bankrupt): the pricing of their product will adjust.
That doesn't only go for fuel prices, but also for loyalty programme revenue. If such revenue is available and competition is fierce, then prices will go down until airline can just about stay afloat after taking that extra revenue into account.
> Private equity will likely sell the company for parts.
You say that like it's a bad thing.
There's another more fundamental problem with airlines like Spirit, which is they can't effectively make this change. Loyalty programs / credit card tiers require differentiated service. This is one of the drivers for why Southwest changed their entire seating model to match the other big players in the industry even though their Ops data showed faster boarding times using unassigned seating.
When you're on the lower tier of the market like Southwest and other budget airlines, creating differentiated service mostly means making things worse for most passengers, not better, in order to have loyalty programs provide a pathway to avoid the suck.
Traditional airlines are very much like Starbucks nowadays in that they are essentially banks, but low cost carriers are closer to movie theaters where they essentially make nothing selling the actual seat so the more people they get in the door, the more they can make on ancillaries.
I heavily doubt PE firms are interested here as there is no potential for growth or a multiple. Spirit's assets are mainly their fleet, there are like 4 maybe 5 people who could buy, of these 2-3 are facing similar financial crises.
In the US I think nobody except United can afford to make a move, more likely some Asian airlines will move; many have grown and have route demand they can't service due to lack of aircraft. If you fly to Asia often you'll note that much of the time Asian airlines have to operate an aircraft from a US airline.
Spirit has been doing this since it's inception. The collapse of their business can't be through lack of this alone.
They used to be. Read up on "Civil Aeronautics Board".
Regulation won't magically save low margin businesses.
Nationalizing might, but then you make it difficult to compete for others. And of course, there's plenty of precedence of nationalized airlines failing catastrophically and having to be sold off to private or foreign entities to keep functioning.
Enough money for who? One person has a pay package north of $30 million.
"If you want to be a millionaire, start with a billion dollars and launch a new airline."
https://philip.greenspun.com/flying/unions-and-airlines.html
If they can build a model similar to REI, count me in.
https://youtu.be/ggUduBmvQ_4?t=2m20s
Bonus: auto-jumps to 2:20
yeah in the US airlines are fintechs.
Unions are one of the more effective ways for workers to fight back against "divide and conquer". Unions work to slightly adress the massive power imbalance between employer and employee; that's why the wealthy hate them and spread negative propaganda about them.
Other airlines also have cramped sits, what little they did better than Spirit isn't worth the price, and the experience was inconsistent: some times you'll get nice flight attendants, a comfy plane, and a good check-in/check-out, other times you didn't. can't plan around them. With Spirit I could plan around exactly how bad my experience would be reliably. Just about any inconvenience was some fee away to address it.
Frontier was the cheap airline that just wasn't worth it. On the flip side, AA was overpriced with snobbish (just my experience, very limited) staff. Because it's a "cheap" airline, Spirit came with low expectations, and it only exceeded them to the most part.
I shop at walmart compared to whole foods and other "better" chains for similar reasons. "great value" as walmart's motto goes, it isn't about the price, it's about the value you get for what you pay for. Spirit was the "great value" airline.
I don't think this effort to buy it will prevail, I only wish the GME betters were in on this action. The airline's value hasn't gone away, similar to Gamestop. The people like it, the demand for it there, the airlines assets and staff haven't lost their value. I don't see how it isn't a good investment. This attempt to buy it is to little, too late. but if it came in actual stock purchase agreements, I'm down for it. But donating random cash to some site as a pledge, I don't know about that.
- People using devices without headphones
- People having loud phone calls on speakerphone with vulgar language
- People with bad body odor
- People looking to optimize their outcomes, even at the expense of others and net deleterious. (Speaking in numbers, willing to take +1 point of selfish outcome at the cost of several others' -1 leaving a net negative for the group)
So much this. I regret that I have but one upvote to give.
I had much worse experiences with Frontier and promised myself never to fly them again. On one occasion we had to wait for 2h on the plane on tarmac after landing at MacArthur airport because... the airport staff was not responding to pilots' calls. Somehow they didn't know the plane was landing. It was 1 AM or so and while it might not have been Frontier's fault, to not be able to sort it out for 2 hours was telling. Had other issues, too, this one was most ridiculous.
I liked Spirit, though, great cost savings, and I didn't mind the minor inconveniences that came with it.
Aside from being known for being a cheap airline, the brand itself was pretty solid... I think it had everything working to its advantage. The bright yellow exteriors of the planes, a catchy name. I think people knew exactly what Spirit was and what they offered, which is the sign of a good brand.
wait a minute... what if?
Talk about damning with faint praise
The only people surprised by Spirit were people who don't read warning labels and then you should only be surprised once. Heck, I paid 3$ for coffee on spirit but they would gladly bring refills and were proactive about almost like a restaurant. On AA and United, you usually had to go up and ask.
On top of that, you could get the big front seat (tm) which wasn't first class but pretty good about 150$ if you waited until your flight to bid. I got it a bunch and it came with free snacks and drinks and it was much cheaper than buying business
I'm gonna miss it.
This is exactly why I would never be caught dead on Spirit. Sartre got it right, "Hell is other people." My issue with Spirit and other budget airlines as a frequent traveler was never about the planes, the staff, or the operations, it was always the other passengers. It's bad enough dealing with people in general in the circumstances we all find ourselves in stuffed into an airplane, but budget airline travelers are generally exactly the sort of folks who ride the bus, which is why nobody wants to ride the bus in the US.
I say all this as someone who enjoys public transport when I'm in Europe and has no problem flying budget airlines in Europe like KLM Cityhopper or EuroWings, because everyone across society uses public transport and budget point airlines in Europe. In the US though, public transport and budget airlines are nearly only used by people who you'd rather not be stuck near for hours at a time for fear of being attacked, coughed on, or otherwise somehow harmed even if minimally which is entirely avoidable by just not.
I would rather deal with someone putting up their nasty leg on the chair next to me, or listen to a movie with speaker on for the whole flight, than deal with rude flight attendants that won't respond to my needs, or dirty looks from other passengers because I'm wearing something comfortable.
Aside from what I see on social media posts though, I've never seen anything extreme like that flying on spirit in all the years.
https://www.yahoo.com/news/articles/american-airlines-worst-...
Yeah it's not a secret that you can get by in life on the cheap if you have cheap, trashy tastes.
And you sort of made another point I had: people like you, and companies who cater to people like you come with all that haughty snobbishness that's just unpleasant and degrades the experience. Good taste has to do with appreciation of value and quality, not polishing of one's ego, or pretending you're superior to others.
Noble, but this will fail. Why would anyone do this? No incentive.
These sorts of initiatives forget the toil of actually operating a business. You might as well get more pledges given that you'd have more control and the same profit share. It will regress to the same as the status quo.
> These sorts of initiatives forget the toil of actually operating a business.
For most businesses the size of Spirit Airlines, the owners typically do not operate the business. They pay people to do that. I don’t operate REI, even though I’m one of its many owners.
I've no idea if the proponents of this plan are reputable, but the concept reminds me of the early years of WestJet, when they made a big fuss about being employee owned and had (back then) a markedly better customer experience. For US residents reading this, I'm told they were a bit like Southwest Airlines.
Even if the naysayers are correct and the probability of this panning out is low, you'll never hit the pitches you don't swing at, right?
https://en.wikipedia.org/wiki/List_of_government-owned_airli...
Like, all people in the world?
Customers? Employees?
What does this mean?
EDIT: It’s shareholders, but each person has one vote regardless of share count.
MEC was the only co-op I have ever been part of. I'm pretty sure they stopped being a co-op and sold it to private equity.
It sounds more like a credit union. (first $5 goes to your ownership share / vote, and the rest of your money goes to your account).
I'll lay out the specifics here from what I learned. I'm not convinced either way, yet, that it could work for an airline.
So here's the ownership structure:
- Co-op Refinery Complex (CRC) - produces fuel
- Federated Co-operatives (FCL) - owns the refinery, also owns food and agriculture distribution warehouses, negotiates bulk pricing
- 200-ish independent regional Co-ops jointly own FCL
The CRC is highly profitable. FCL is profitable. The independent regional co-ops are not, on their own, all individually profitable. Some of these exist in small rural centres, some of them exist in larger cities. The urban ones are generally profitable, the smaller ones not so much. The rural ones, though, are largely the lifebloods of their communities; it's not unusual for the Co-op Grocery Store and Co-op Gas Station to be the only sources of food and fuel for miles and miles. While these do sometimes run at a loss, they make up for it with their annual Patronage cheques from FCL: when the CRC makes a profit and when FCL makes a profit (from the CRC and from their distribution network), those profits get returned back to the member co-ops on a pro rata basis: buy more from FCL, get more at the end of the year.
At the far tail end, each of these independent co-ops is a member-owned co-op. At the end of the year I end up getting a patronage cheque based on how much fuel, food, and building supplies I bought that year. It's not large, but getting a $100 cheque in the mail is always nice :).
In this situation, though, it all works because the not-so-profitable pieces own both their upstream wholesalers and a crazy-profitable refinery. (The refinery sells to other customers outside of FCL as well).
One of the other critical pieces that the strike/lockout/overall "labour dispute" really made clear to everyone: the independent Co-ops, FCL, and the upstream CRC are all member-owned co-ops, not worker-owned co-ops.
---
So let's look at how an airline co-op might be structured. The first parallel that I could see would be flipping the regional airline model on its head; currently the big players like Delta and United run a bunch of their smaller routes through regionals (SkyWest, Republic, etc). If a bunch of them got together, they could in theory jointly one one of the majors. The wrinkle there, as others have pointed out, the majors aren't profitable as airlines, but rather through their credit cards and loyalty programs. Alternative, then? Do a bunch of regionals get together and buy a bank? Let the bank be profitable, let the major airline handle traffic between the regional hubs?
I know quite a bit less about worker-owned co-ops, but generally speaking aviation is incredibly capital intensive. Starting a worker-owned co-op airline is probably not possible. A single, say, 737 Max 8 costs $121M. That capital's gotta come from somewhere.
Spirit as an asset is worth less than $0. Buying it would be a commitment to set money on fire for a decade.
I primarily use my favorite's airlines credit card because it gives me perks such as priority seating, and free checked bags. I am pretty certain that the credit card fees (that is passed on to the merchant) does not come close to the value that I gain for my credit card loyalty. It is a stupid game that I am forced to play, because the credit cards also provide other benefits, such as fraud protection.
I am wondering right now if "Spirit Air 2.0" even has a fighting chance if they are not able to subsidize operating costs by also being a credit card company.
[1] https://www.thestreet.com/personal-finance/delta-air-lines-m...
Just to be clear, that isn't what the article says. It says more than what "most" airlines generate in ticket sales. Not Delta, or any major US carrier. As interesting as that sounds, it couldn't logically make sense and it only represents about 15% of Delta's revenue. It's not even a straightforward revenue stream, it works for profitability because they are able to book most of the revenue immediately and able to mark down the future expense because of how loyalty rewards are obligated.
It's really just a surprising morph of their economic model in the post regulation era.
You are not forced to play it. That is a just story you tell yourself. You can make a different choice.
That's a reason to have an airline credit card, it's not a reason to use it (other than for purchasing that airline's tickets)
Anyway, point is they failed and went under and my recollection is that just selling gasoline alone was not profitable. The extra coin comes from selling snacks, beer, smokes, etc.
And it was Swifty - definitely a no frills experiences!
Here is a decent video explaining it https://www.youtube.com/watch?v=ggUduBmvQ_4
The $8.2billion from American express pays basically is buying tickets and ticket extra, it buys them some points, lets ignore multiples for now, it buys them 8.2billion points, which they give to customers which then buys tickets.
If Spirit accepts USDC instead it wouldn't be that much different.
Generally it's the interchange fees that fund reward programs (charged between banks), not the merchant fee.
https://stripe.com/au/resources/more/interchange-fees-101-wh...
It generally depends on the contract the merchant has with payment provider:
- some have relatively high merchant fees to cover for interchange fees
- others (generally called IC+) have the merchant pay the IC fee plus some other (generally much smaller) fee to the payment provider
In both cases it's the merchant that ends up paying them. It's not a concidence that in Europe (where there are caps to IC fees) the fees that merchants pay are generally lower.
this isn't unique to airlines. this applies to all exceptionally mature companies/industries who believe there is no more room for growth. any significant profit they make gets paid out as dividends to investors who then put the money elsewhere instead of reinvesting into the company
I was doing a two hour flight monthly for business, 2 hours each way. Frontier was about half the cost of more premium airlines. The times were good and predictable. I never checked anything and maybe rarely I’d buy a snack. Now I won’t claim that it was “comfortable” but it was predictable, inexpensive and kind of efficient all of which sort of creates a ‘comfort.’ It was a flying bus and it was ok at that.
Somewhere, I think when there became competition for the ultra discount airlines, the staff culture changed and it seemed not uncommon to encounter an employee that resented the customers. Spirit had multiple reported incidents of crew filming customers and just being generally antagonistic. Basically they hire service people that generally don’t have to provide much service and it becomes ”extra work” when they do;worse they often see a price tag associated with the “extra work” and it’s not reflected in their compensation
And it was cheap, so you could book a next day flight without paying multiples in premium.
It was fun and affordable to fly out of state in the morning, spend a day exploring another place and get back at night.
> *0* hedge fund owners. Zero
or including the date Spirit collapsed (despite already mentioning it earlier on the page!). Why not also include “*6* letters in ‘Spirit’” while you’re at it?
whether it's an llm, a template or bespoke made from bytecode doesn't really matter does it?
But I'm just not sure the demand would be there for longer distances unless it's so cheap that it's worth the extra time.
Like what's China to Kunmung, a 6 hour flight vs a 12 hour train, at a comparable cost?
Even with Japanese level high speed rail NYC to LA still takes much much longer than flying.
You need to buy land. Disrupt wildlife, and various ecosystems.
The government should of bailed out Spirit instead. They served a public good.
Allowing lower to middle income people to travel helps everyone.
totalMembers: 4954
totalPledged: 5678872
averagePledge: 1146.320549
However the numbers on the website appear to be hardcoded in with very dramatically different numbers.
The argument I have seen is that blocking it resulted in Spirit dying and people losing their jobs and there being less competition.
Wouldn’t the same exact thing have happened regardless? Am i supposed to believe that Jet Blue would have kept all of those employees? There would be one less competitor anyway, and in the merger case they’re even more powerful now meaning competing is harder.
It seems to me it’s just that creditors want to be paid out by a merger rather than paid our for cents on the dollar when it died on it’s own.
No idea if the extra time "normal" fuel prices would have allowed Spirit to find a way to stay afloat, but the fuel price spike stole any time they had to figure it out.
I'm surprised they don't also include a team page with a bunch of ChatGPT-generated photographs of fresh-faced fake people to really sell it.
A period documentary about the Meridian Triumph motorcycles co op. Sad, thoughtful take on a particular bit of British manufacturing history. That the co op started with a strike, had to trade exclusively with a single customer, and that the senior workers became the managers they hated.
Due to the structure of that co op there was no way for them to access the capital they needed to redevelop their products and it ended up in private hands as a result, leaving the workers with nothing. I don’t think I would wish a co op on anybody.
I like the approach Bob's Red Mill took.
If it would be TWA or PanAm my reaction would be positive.
The employees are all gone and shuttered, even if you go try to rehire them they are all jumping to any other company if they stayed to the end. The pilots and cabin crew lost seniority and you won’t be able to afford ALPA union pay or AFA pay.
So while they somehow raised 26 million, it feels like a hollow gesture so that the creditors get paid but not really be realized into an actual airline with an AOC
At 26 million raised it’s actually better to make a new airline and run it lean. Get a good route or two and it could work, but 26 million is lean but doable. The liquidators want to get spirt planes released asap.
1) Pledges being non-binding means there is no proof of funds. This means they can't actually make an offer, presumably they will have to email everyone who pledged to put in cash and hope it resembles a solid offer.
2) How much is Spirit worth? Their market cap was ~50M a few days before they shut down. Where are we getting 1.75B$ from?
3) Since these are non-binding pledges I'm inclined to believe most of these numbers are bots / fake. Especially as accredited investors skew older and make up less than 1/5th of the population!
4) 666 is a very specific significant number for the average pledge size to consistently stay at. I've watched the number of patrons go up by thousands and yet the average pledge size stay the exact same. The total pledged is certainly fake as a result, although see [3] pretty sure these are all fake numbers.
5) You get nothing in return for your pledge and definitely nothing in return for your money. They go to great lengths to add disclaimers that everything is proposed and subject to change at their discretion.
6) Just like the entire site is AI slop, the disclaimers are too, not worded correctly like regular financial disclaimers, in many places not required and in other places not good enough.
7) They pretend to care a lot about disclaimers and legal verbiage yet there is no mention of the entity or who is working on this bid so missing the most basic mark when it comes to financial disclosure!
8) It says "Spirit didn't fail because people stopped flying. It failed because Wall Street loaded it with debt and extracted every dollar it could." This is just a lie, no matter how Wall Street trades your stock it doesn't affect your treasury. Spirit failed because of horrible financial mismanagement and both an inability to maintain solvency under operating costs (which rose even further recently due to jet fuel shortages) as well as an inability to secure a line of credit. Technically you could also blame their corporate strategy although this was pretty good with the Jet Blue merger, so blame here also lies directly with Elizabeth Warren and Ted Cruz (unlikely duo!) for championing blocking the merger. You can find this from a simple Google search or asking your AI of choice.
9) While we're on the subject of financial mismanagement, whoever wrote this clearly has not much idea of how the finances for something like this would work. _It's not just AI generated — it's AI slop._
10) Whoever made this has no idea whether the assets are actually still there nor do we. Spirit may already be under binding agreements for asset sales.
11) Whoever wrote this also does not understand how companies run. First of all they think they are doing something revolutionary with equity, when almost every company has ESOPs/EIPs. Profit-sharing relative to ownership is also literally how shares work and Spirit already regularly paid these out prior to beginning their financial crisis. Every publicly traded company has open books and openly reports their financials each quarter.
12) "One member, one vote — your voice is equal regardless of pledge size." What incentive would anyone have for pledging more? Also, voice in what? Vote in what?
13) "No golden parachutes — executive pay capped at a fair ratio to median worker pay." First of all, this is not what a golden parachute is. Secondly, either the fair ratio will be ridiculous to allow properly compensating execs, or they will be underpaying by a large margin and find it difficult to get any proper execs in place. Then they can speedrun the last few years of mismanagement at Spirit.
14) "The cooperative model has worked: REI, Ocean Spray, Land O'Lakes, the Packers — all people-owned." These organizations all have well thought out models. This is not the same as AI slop.
15) "Private equity is already circling the wreckage." First of all, Spirit is freely undergoing an asset sale. Their operations etc. are shut down. Not only is this not appetizing to PE, but in general PE firms stay very far away from airlines which are famously low margin difficult to operate businesses with limited potential for growth once established. PE normally focuses on airports and airport services, neither of which Spirit has (their airport assets are limited to slots at LGA which are useless to anyone except airlines). The much more obvious buyer is other airlines looking to expand control and consolidate aircrafts.
16) It is common for a company facing insolvency to shut down, do an asset sale of expensive assets, and then come online in a much smaller form with remaining assets, funding itself with the sold off assets. I don't see why Spirit would not do the same thing, in which case even if a cooperative bid is put together it would be much weaker than disjoint buyers (e.g. Frontier and JetBlue separately buying some aircrafts).
17) Lastly whoever wrote this has absolutely no plan to deal with the high operating costs and failing industry here, which is really much more important than ownership incentive structures. No amount of kumbayah we're all in this together is going to drive jet fuel prices down or change the economics of commercial aviation.
How could it do anything but fail?
https://www.reddit.com/r/charts/comments/1psiwws/us_airlines...
There's no way they could get away with something significantly different, right? Like anything else they'd just be liable for being sued?
Warren and Sanders are just reflexively against big businesses.
Why is this automatically the case?
Here, let me try:
She killed a merger a couple years ago that would have ended up with the shutdown of both companies, now we at least have Jet Blue intact.
Both of our statements are equally speculative.
A more honest prediction: Merging Spirit and JetBlue would have resulted in the combined airline going bankrupt anyway, but it would have been too big to let fail so they would’ve been bailed out. And the taxpayer would be propping up yet more failed companies.
Nobody is buying spirit air... a bunch of gamblers just want to pump the price monday morning.
https://www.thebignewsletter.com/p/who-killed-spirit-airline...
The cooperative was born out of exploitation: farmers in Kheda, Gujarat, were forced to supply milk to Polson Dairy, which held a monopoly and paid farmers unfairly through commission-taking agents.
AMUL returns 85% of every rupee earned back to farmers — far above the global average of 33% — and procures milk at rates 15–20% higher than private dairies.
AMUL's democratic governance ensures farmers elect board members who represent their interests, and the Managing Director of each unit is appointed by this farmer-led board — not the state government — preventing political interference and corruption.
AMUL demonstrates how a business can achieve large-scale commercial success while prioritising social justice and environmental care — through collective ownership, democratic governance, equitable profit-sharing, and community investment — offering a powerful model for cooperatives worldwide.
Spirit was an objectively terrible airline. Their business model failed. They folded. The end. This is why you can't fly Braniff or Southern Airways anymore in 2026. Failed businesses go under, they don't live on in perpetuity.
One of the creditors that piloted their exit from the first bankruptcy also provided on $80M out of a $270M line of credit secured by assets Spirit needed to survive (an RCF was backed by their right to take-off and land at LGA amoungst other thinfs)
1 week before the 2nd bankruptcy, Spirit drew against the entirety of that line of credit.
During the 2nd bankruptcy, besides rolling large amounts the debt owed to them from the 1st bankruptcy (so Spirit would need to pay it back before other creditors), they had the proceeds of plane sales go towards... interest payments on their RCF and paying back additional financing from the 2nd bankruptcy.
The creditors leading the 2nd bankruptcy also sold the lease to Spirit's largest hangar on April 2nd, but did a similar thing again: instead of the cash going towards operations, it went to the creditors who'd led both bankruptcies.
-
Seeing as they refused the government's bailout, I'm guessing this is doomed as well, but interesting stuff for a non-finance person
Bullhockey. Wall Street doesn’t assign debt. Poor management and bad risk-assessment leads to assuming bad debt.
This is like saying it’s the car’s fault that you drove to work today…
To be clear, the proposed Spirit Air 2.0 would also be answerable to shareholders. A structural difference is that each shareholder would have one vote regardless of capital contribution. But the real substantive difference is the spirit of what they’re fighting for: worker ownership, affordable fares, transparent operations, no golden parachutes, etc.
They probably believe they'll get more money back from selling the aircraft. If American or United want a new airplane they place an order and wait 5 or more years for delivery. No airline has excess airplanes available to take new routes. They are so expensive just a handful being idle (outside of expected maintenance winodws) would erase all profit. That means if there is a new opportunity it can take a very long time to go after it.
Airlines from around the world will line up to buy every single one of Spirit's airplanes because it means they can have one _today_. A few might even pay premium prices for them.
Airlines are a cyclical business. Boeing and Airbus gobble up every spare dollar on the back end and customer pressure eats up the front end. Then you're subject to all sorts of random shocks outside your control without much ability to adjust your fixed costs. A difficult business to be in.
1) Revenue/Route management: re-think the routes with a ruthless focus on sustainable routes with defensible margins.
2) Customer experience and Brand: being an LCC can't come at the expense of customers, i.e., the fare is so cheap we get to treat you like shit.
3) Capital-structure & cost base: you need to right-size the debt, fix liquidity, and ensure you have a durable cost structure (fuel-risk management, etc.)
Plus, it's a carbon-polluting business that props up dirty, corrupt petrochem industries and regimes.
Let it die.
Great idea in theory but…
*and fail to
- Warren Buffett (Comedian)
Brilliant.
On Our maiden voyage aboard spirit, they dumped us halfway home, in las vegas. No compensation, no meal voucher, no overnight accomodation - they just DUMPED US (along with 30 other connecting passengers).
Spirit seems incapable of holding a flight even 5 mins for connecting passengers delayed via spirit's incompetence!
We saw them slam the door 50FT away to our connecting plane as we got off our plane. We watched in horror - our faces against the airport glass - as our next-leg pilot looked up at us and sat on the tarmac 30ft away doing NOTHING for 20 minutes as Spirit told us "nothing could be done" and "you missed your connecting flight" and "see the agent to get DUMPED AND NOTHING, later".
When the Packers upgrade their stadium and charge higher prices for tickets, I can promise you that they won't use the profits to buy back your shares or pay you a dividend.
