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Summary: Not since the Doolittle raid on Tokyo has a fleet of so few airplanes generated so much media attention. And so much focus on fluff and misinformation instead of the real story. This airline was obviously going down, but the coverage was mostly all about trivia instead, and based on ignorance of the air transportation dynamics that were unfolding over months and indeed, years.
We be talkin’ about Spirit Airlines.
Based on reports, they had been planning on a fleet that pointed to as few as 62 A320/321ceos, after the rest of the neos were taken by creditors. Like, shedding over 100 airplanes. Not even a 2% player going forward - if it had gone forward.
That's the number of Airbus ceos in operation. The neos were going to the lenders. The ceos already parked are (were) not likely to be taken out of storage because of the expense.
The folks who are lamenting the loss of Spirit have been asleep. The cutbacks and changes over the last three years pretty much already accomplished much of the supposedly disastrous loss of all this low fare service.
Chicken Little As Copy Editor. According to a lot of the media coverage, the future of the air transportation system in America will now be materially changed. Fares will spike. Millions will be stranded now, and unable to fly for months. Pain and suffering across travel-land. The going story is that this will be one whale of a hit to the air transportation system.
All because several dozen ten-year old A320/321s are going to be grounded. Oh, Puhleeze.
In some cases, this drivel is from sources who are shooting from the factual hip, or just repeating what they’re hearing in the Fourth Estate echo chamber. Or, the typical academics who are proving that home schooling needs to go beyond the 12th grade.
The Facts Are Clear & Simple. Let’s get some facts on the table. Sit back, relax, smoke ‘em if you got ‘em, and follow the bouncing ball of facts. These facts cannot be ignored or dodged.
Fact One: No, Spirit was not materially keeping fares down for USA consumers. In a few markets, they have been a factor, but not a universal driver of lower ticket prices.
And these stories are sometimes accessorized by latter-day Jimmy Olsen-esque reporters (Google it, if you must) who give us fare data, right from the DOT, “proving” that NK has been a consumer benefit.
Gov’met numbers, don’t ya know, spewed out as hard truth.
These types of reporters are ignorant of the fact that what Spirit reports as fare revenue is only a portion of what passengers sitting in the seats are paying. Like, think about ancillary fees that consumers feel necessary to add on. These are a part of the cost.
(Remember, DOT data, whether O&D or Traffic or Form-41, should only be consulted under adult supervision.)
Fact Two: The Sacrificial Lamb Airlines. Where Spirit might have had an effect on fares – very few markets – it’s because they made it happen by selling seats at red ink levels. Not sustainable – as we can easily see in their stellar financial results.
Fact Three: This is was not a fuel-cost federal bailout. It Would Have Been A Reward For Bad Management. The media who are veneer-claiming that fuel spikes caused Spirit’s business to go to room temperature can only be described as unprofessional.
Sloppy. Uninformed. The facts are not hidden.
For years, Spirit has been living on borrowed money and cashing in on short-term financial benefits from airplane lease deals. These were running dry long before the Iran war.
The situation has not been in doubt for months: Spirit was a lost cause. Fuel issues have only accelerated the inevitable collapse.
Fact Four: Spirit Has No Real Market Assets. No Real Brand Loyalty. No mystery here. It has jumped in and out of markets. It has a dismal reputation for customer service. They have a product that is not as competitive as what major airlines are offering. The consumer was not thrilled.
Fact Five: Spirit Was Trying To Place Airliners. Not Meet Consumer Needs. Spirit filed “chapter” in 2024. It emerged from administration by immediately and grandly promising a future profit of a quarter million bucks.
They promptly lost almost that exact amount.
Holy Deficit, Batman! That’s the definition of questionable management. And so would be the Trump administration tossing $500 million into this financial bonfire. It's chump change when anybody awake and sober looks at how much cash this airline has burned over the last six years.
Let's cut to the chasse: Spirit represents a fleet of a few dozen yellow airliners all dressed up with no profitable places to go.
Fact Six: The Latest Chapter 11 Had The Same Plot & Same Dialog. Then came the sequel: Return To Chapter 11. Let’s recount the exciting announcement, which would have the traveling public believe that a second foray up the courthouse steps was a brilliant management strategy:
“… Spirit intends to use the Chapter 11 process to implement the broad changes necessary to transition the Company for a sustainable future and position it to deliver the best value in the sky for years to come…”
Earth to aviation media: this was exactly what they promised a year earlier in the first wallow into the bankruptcy swamp. Second time in, it was just a re-run.
Anybody notice that now, eight months since this pablum came out, Spirit was still burning through cash like weed at Woodstock. And it was just as dysfunctional.
Fact Seven: The Damages Affect More Than Big Lenders. Another thing. For anybody in the airline business who's been up close and personal with a bankruptcy filing, there is a lot of financial pain - and it is not just immediate employees and their families. It's the creditors - and that goes well beyond the fat cat financial firms that probably have factored in these costs and still make millions.
It's the small airport that has to eat the landing and facility bills that were due. It is the vendors that cleaned and serviced the airplanes. It's the entire universe of small businesses that get zapped. There is economic impact - in reverse.
Fact Eight: No Airport Will See Material Reductions In Air Access. Remember, NK was not an airline chasing core air service demand. As a result, the gaps - if any - in air service due to NK leaving will be very short term.
In last week's Touch & Go, we did an analysis of NK's position at FLL, and why a shutdown would minimally affect the market due to the customer segments involved.
However, do plan on heart-wrenching stories of how Latrobe, Pennsylvania is now "losing its only scheduled flights." Which it is. NK operated low frequency weekly flights to one, sometimes two, leisure destinations such as Orlando or Myrtle Beach. Nowhere else.
But that is not "air service." For consumers not interested in a leisure trip to Florida or a tee time at Myrtle Beach, Latrobe's air access has been at Pittsburgh, and will continue to be. The Spirit flights were a nice option for discretionary spend, but it was never "air access."
A Closed Chapter. Not A New Industry. The reality should not be missed: this is the fallout from management that has run Spirit for the past two years. Can't put it any other way. Facts are facts. Whether it offends anybody or not, a lot of people have been financially injured by Spirit.
There are thousands of unpaid "bar tabs." And a lot of bartenders out of a job.
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