Spirit Airlines Is Winding Down All Operations

It’s strange to see so many commenters celebrating the death of a company and the loss of so many jobs.

I flew Spirit a few times. The first time sucked because it was an emergency and I had no other option. The last few flights were great. We got the large seats up front for $75 extra. That plus parking at SJC was still cheaper than flying Southwest out of OAK.

The staff were friendly, and the gate was conveniently across from a lounge, so we had a truly great experience for those couple flights to Dallas.

Just a few hours ago, Spirit execs were saying everything is just fine. At noon yesterday, Trump was saying that a bailout was still likely. (The first time I read about Trump saying that "we" were going to buy Spirit, I thought he meant him personally, or The Trump Organization. Spirit only needed about $500 million, and Trump could afford that.) That nobody wanted to buy a major airline for $500M means it was a really bad deal and not worth saving. They were already in Chapter 11 bankruptcy, the "debtor in possession" reorganization mode. Not yet clear if they just went to Chapter 7, liquidation, but that's probably happening within days.

Still, a zero-notice shutdown is a bit much. Some people who have tickets for tomorrow probably went to bed already.

There's still the mechanics of winding down. All the planes have to be flown to suitable storage locations. With such an abrupt shutdown, they'll have mis-positioned aircraft all over their route system. Many planes are probably leased, so the lessor may have to arrange to take custody of the aircraft. It's probably better if the aircraft are leased - there's some lessor with funds to take care of the job and the knowledge of how to arrange it, since a handover and move happens at the end of each aircraft lease. Aircraft Spirit actually owns will have to be moved by a bankruptcy receiver, which is a lawyer trying to run what's left of an airline. Most major airports charge very high parking fees. LAX charges $1000 for the first day, and that goes up to $5000 a day on day four. They're not in the storage business.

There are probably a lot of middle of the night phone calls and meetings going on right now.

Because companies that are run poorly should go out of business. Otherwise, what incentive is there for management to do a good job?

The immediate cause was rising fuel prices. The other issue sounds like it was poorly ran.

More generally, it is also a low cost carrier at a time when, after years of competing on price, airlines are seeing people willing to pay more for a better experience. All other carriers are expanding their premium options, catering to the affluent part of the K economy (for the first time ever the majority of Delta revenue came from premium cabins over main). Meanwhile, Spirit was dealing on the other side of the K who is also most impacted by increasing inflation, etc... giving Spirit zero ability to raise prices.

That’s my experience of every single US airline though…