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Spirit Airlines Is Winding Down All Operations

spiritrestructuring.com

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Re: Spirit Airlines Is Winding Down All Operations

#71

Post by Wurdan »

gib444 wrote: post #50
Ekaros wrote: post #42

Earlier quoted context omitted.

Airlines are not great business. Margins are not great. Fuel is significant part of their operating costs. And if it goes up too much in too short time the whole model breaks. Less margins you have the more you will be impacted. So if you are operating at edge by default fast move in costs will destroy you.

IAG in 2025 had a record operating margin of 15.1%. Ryanair's gross profit margin for fiscal years ending March 2021 to 2025 averaged 19.1%. Some are (were?) doing just fine - in Europe at least. Sure, it's no Big Tech or banking, but it's not like the single low digit percentage of eg retail. Perhaps some USA airlines need some advice from across the pond?

The business model works fundamentally differently in the US and Europe due to geography. The US is big, meaning that flights are often longer, meaning that fuel is a bigger portion of the operating cost. And fuel is essentially something airlines can’t reduce the cost of compared to other operating costs where it might be possible to optimize for greater efficiency.

Re: Spirit Airlines Is Winding Down All Operations

#72

Post by avazhi »

gblargg wrote: post #70
avazhi wrote: post #41

Earlier quoted context omitted.

[flagged]

Some of us don't consume the mainstream news and don't fly.

If you didn't know about the war in Iran and the effects it has had on oil and thus jet fuel prices, I'm not sure what you're doing on HN.

Re: Spirit Airlines Is Winding Down All Operations

#73

Post by gblargg »

avazhi wrote: post #72
gblargg wrote: post #70

Earlier quoted context omitted.

Some of us don't consume the mainstream news and don't fly.

If you didn't know about the war in Iran and the effects it has had on oil and thus jet fuel prices, I'm not sure what you're doing on HN.

This story is about a particular airline failing (out of all the others that aren't). Do you think Spirit airline's situation is something serious I should have been keeping up with? I do drive a car and get gas, and the price increase has been modest but not alarming, in the context of the last decade.

Re: Spirit Airlines Is Winding Down All Operations

#74

Post by Kwpolska »

avazhi wrote: post #72
gblargg wrote: post #70

Earlier quoted context omitted.

Some of us don't consume the mainstream news and don't fly.

If you didn't know about the war in Iran and the effects it has had on oil and thus jet fuel prices, I'm not sure what you're doing on HN.

The war in Iran was the final nail in the coffin. But they were running out of cash for the past few years. If the Iran situation was so bad by itself, we would surely see other airlines failing now.

Re: Spirit Airlines Is Winding Down All Operations

#75

Post by Kwpolska »

ozgrakkurt wrote: post #32
epistasis wrote: post #4

This process may seem ugly, but just like biological death is necessary for an ecosystem, this sort of death/restructuring is essential for capitalist economies. Assets and capital get reallocated to better uses. It's all part of the circle of life.

Ideally, they should have stopped selling tickets and then stopped the flights when the sold flights were done. At least within some time frame like 1 month

I doubt many people would buy tickets for a flight with a failing airline. That said, shutting down with effectively zero notice is pretty terrible, and they will probably need to do a bunch of repositioning flights, so they could have kept the lights on for one or two more days.

Re: Spirit Airlines Is Winding Down All Operations

#76

Post by spacedcowboy »

clintonb wrote: post #61

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…

It's probably the association with Trump, at least to those outside the US. Anything even remotely connected to that arsehole is, almost by definition, to be reviled. If he wanted to save it, there's probably a really good reason not to, without reading any further into the topic.

Re: Spirit Airlines Is Winding Down All Operations

#77

Post by ozgrakkurt »

Kwpolska wrote: post #75
ozgrakkurt wrote: post #32

Earlier quoted context omitted.

Ideally, they should have stopped selling tickets and then stopped the flights when the sold flights were done. At least within some time frame like 1 month

I doubt many people would buy tickets for a flight with a failing airline. That said, shutting down with effectively zero notice is pretty terrible, and they will probably need to do a bunch of repositioning flights, so they could have kept the lights on for one or two more days.

I agree with this.

I initially meant that they should have finished the flights they already sold tickets for, in some timeframe like one month.

Changed the phrasing so it is more clear.

Re: Spirit Airlines Is Winding Down All Operations

#78

Post by gib444 »

Wurdan wrote: post #71
gib444 wrote: post #50

Earlier quoted context omitted.

IAG in 2025 had a record operating margin of 15.1%. Ryanair's gross profit margin for fiscal years ending March 2021 to 2025 averaged 19.1%. Some are (were?) doing just fine - in Europe at least. Sure, it's no Big Tech or banking, but it's not like the single low digit percentage of eg retail. Perhaps some USA airlines need some advice from across the pond?

The business model works fundamentally differently in the US and Europe due to geography. The US is big , meaning that flights are often longer, meaning that fuel is a bigger portion of the operating cost. And fuel is essentially something airlines can’t reduce the cost of compared to other operating costs where it might be possible to optimize for greater efficiency.

> meaning that flights are often longer

Got any sources?

I found:

Europe average flight length (2024): 1,157km [0]

USA average flight length (I could only find old data, 2005): 1,110km [1] (even if we index this up based on upward trends, maybe another 150km, that doesn't seem a huge difference to me?)

> The US is big

And Europe is big too. It's actually a bit bigger than the USA by land size.

Btw, IAG is a global airline group. Only ~32% of IAGs revenue is intra-Europe and domestic. Another data point: Turkish Airlines (very long-haul focused airline) 2025 net income margin was 12.1% in 2025.

I'm not sure your explanation is sufficient. I don't see the exception in the USA? I am certainly willing to accept there are other differences and challenges in the USA, but I don't think it's been presented yet in this discussion.

And remember the original claim was "Airlines are not great business. Margins are not great"

--

EDIT: I found https://www.airportroutes.com/airlines/NKS/ which does highlight that Spirit flew lengths longer compared to Europe's average, at 1,577 km - but then using the same source for Ryanair https://www.airportroutes.com/airlines/RYR/ it's 1,456km, so again, not a huge difference. So comparing 2 seemingly very similar airlines, the European one has both managed to be profitable and not go bankrupt...

--

[0] https://www.eurocontrol.int/publication/eurocontrol-data-sna...

[1] https://www.hsdl.org/c/view?docid=25985

Re: Spirit Airlines Is Winding Down All Operations

#79

Post by gib444 »

matwood wrote: post #67
aliljet wrote: post #33

Why did Spirit die? Was there any last of this that had to do with their abysmal customer service?

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 ca…

> 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.

Ryanair (Europe's biggest and most profitable airline) is managing it OK [0]

What's difference about that side of the K in the USA vs Europe?

[0] https://www.bbc.co.uk/news/articles/c620506dvmjo

Re: Spirit Airlines Is Winding Down All Operations

#80

Post by Wurdan »

gib444 wrote: post #78
Wurdan wrote: post #71

Earlier quoted context omitted.

The business model works fundamentally differently in the US and Europe due to geography. The US is big , meaning that flights are often longer, meaning that fuel is a bigger portion of the operating cost. And fuel is essentially something airlines can’t reduce the cost of compared to other operating costs where it might be possible to optimize for greater efficiency.

> meaning that flights are often longer Got any sources? I found: Europe average flight length (2024): 1,157km [0] USA average flight length (I could only find old data, 2005): 1,110km [1] (even if we index this up based on upward trends, maybe another 150km, that doesn't seem a huge difference to me?) > The US is big And Europe is big too. It's actually a bit bigger than the USA by land size. Btw, IAG is a global ai…

How are you counting average distances? Simply as the distance between two points in the carrier’s network, or are you looking at the lengths of each individual flight?

The source for the point I made is a Wendover video - Why Budget Airlines are Suddenly Failing

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