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!"
The core part of air travel doesn’t really feel any different to a bus or metro or train. Off the tarmac then yes it absolutely feels like a Verizon store, as does some of the in-flight service, but there’s always been this weird feeling as a traveler that every carrier is basically the same thing but with different decals on it. Airline alliances are surely the ultimate example of this.
Try flying Delta. It isn’t the cheapest option, but you really do get better service.
If you want to feel special, do Aeromexico first class. The checked bags are waiting for you before you can even walk there on a domestic flight.
Spirit was cheap. And if you’re poor, you need cheap. If you aren’t, buy better service and don’t complain that it’s just Greyhound on a plane.
I'm not sure it's great to have important infrastructure operated this way. Other than regulation do you see a way out?
This is absolutely not true. If all the airlines were prohibited from making money with anything else (miles, credit cards) then airfares would rise across the board and there would still be plenty of demand. Not as much, but still plenty.
That's.... like a pretty shocking erasure of the idea of a demand curve given the forum here.
To be glib: no, that's not how it works. Increase the price and fewer people will fly, but the demand won't drop to zero. Decrease it and you make less money per ticket but the size of the market is bigger. At some point there is a local maximum, to which the market seeks.
But conditions change occasionally and the equivalent supply curve is moving rapidly because of the oil shock (i.e. it's more expensive to put planes in the air to service tickets you already sold). And things like the mess with Spirit are what happens when the market readjusts: the rest of the industry will (probably) backfill some of the lost capacity, but not all of it, and prices will (probably) rise a bit to a new equilibrium.
It sounds like there’s a problem with having too many flights that are barely full and hence unprofitable. AFAIK the federal gov spends significant money subsidising many “small airport” routes even if they’re barely used.
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.
I wonder if this will be the next "market" to exploit if ad revenue ever dies down too much, or if it's one that's always been there, and I've simply never been a part of.
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.
Air France, British Airways, Finnair, Turkish Airlines, just to name a few, all have miles programs.
They just aren't tied to credit cards because the EU caps interchange fees to 0.3%, so there simply isn't enough money to have a meaningful credit card point system.
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!)
Tickets used to cost 4-8x what they cost now, depending on route. It wasn't a couple percent extra. A lot of what made flying seem like such a glamorous activity was that everyone but the upper classes was excluded.
An economy class round trip from the US to Japan in the 1970s with Pan-Am was $8,900 in 2026 dollars. About $15,000 if you flew first class.
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.
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 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.
They used to be. Read up on "Civil Aeronautics Board".
"If you want to be a millionaire, start with a billion dollars and launch a new airline."
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)
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...
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.
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.
https://www.yahoo.com/news/articles/american-airlines-worst-...
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.
> *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?
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.
How could it do anything but fail?
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.
totalMembers: 4954
totalPledged: 5678872
averagePledge: 1146.320549
However the numbers on the website appear to be hardcoded in with very dramatically different numbers.
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.
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.
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.
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.)
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.
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?
If it would be TWA or PanAm my reaction would be positive.
- 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".
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.
Plus, it's a carbon-polluting business that props up dirty, corrupt petrochem industries and regimes.
Let it die.
One of the creditors that piloted their exit from the first bankruptcy also provided on $80M out of a $270M line of credit secured by assets Spirit needed to survive (an RCF was backed by their right to take-off and land at LGA amoungst other thinfs)
1 week before the 2nd bankruptcy, Spirit drew against the entirety of that line of credit.
During the 2nd bankruptcy, besides rolling large amounts the debt owed to them from the 1st bankruptcy (so Spirit would need to pay it back before other creditors), they had the proceeds of plane sales go towards... interest payments on their RCF and paying back additional financing from the 2nd bankruptcy.
The creditors leading the 2nd bankruptcy also sold the lease to Spirit's largest hangar on April 2nd, but did a similar thing again: instead of the cash going towards operations, it went to the creditors who'd led both bankruptcies.
-
Seeing as they refused the government's bailout, I'm guessing this is doomed as well, but interesting stuff for a non-finance person
Great idea in theory but…
*and fail to
When the Packers upgrade their stadium and charge higher prices for tickets, I can promise you that they won't use the profits to buy back your shares or pay you a dividend.
1) Pledges being non-binding means there is no proof of funds. This means they can't actually make an offer, presumably they will have to email everyone who pledged to put in cash and hope it resembles a solid offer.
2) How much is Spirit worth? Their market cap was ~50M a few days before they shut down. Where are we getting 1.75B$ 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.
Warren and Sanders are just reflexively against big businesses.
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...
