Originally Posted by
CatPilot1
United is offering some type of reduction in force program. Delta has similarly reduced block hours and has offered more generous time-off programs; the same thing goes at American, FedEx - you name it.
The 260 "Furloughs" will likely be met through attrition. 130 Captains will downgrade to F/O on 01 September; the additional 130 furloughs, *if they do* occur will be balanced through through 2025. Much ado about nothing - ALPA negotiations are ongoing and few, if any furloughs will occur. The Company expects much of the overage in staffing in the pilot group to be attained through retirements, attrition and voluntary leave programs. Much ado about nothing.
No furloughs in the Flight Attendant workgroup; all staffing levels are attained through voluntary leaves.
Where can you direct me to Spirit filing bankruptcy via Chapter 11 of the US Federal Code? It was never a reality - yet - every airline and every company could declare bankruptcy at any time for any reason. This isn't Sears, and, this isn't the 70's anymore. You need to rethink what "bankruptcy" means. Every airline has declared bankruptcy, continues to operate and reduce its cost structure. Your statements underscore your limited knowledge base.
It is 2024, not 1985. The days of Braniff, Pan Am, et al are gone as is the old Bankruptcy code. Get with the times, beat it stupid.
Spirit has 6 main problems, any number of which could bring it down.
1. The Debt- Spirit is the MOST Leveraged airline in the entire industry when adjusted for size. They have 630X EBITDA to Debt due next year. Anything over 7x has historcially required bankruptcy. Spirit is at 630X in 2025.
2. The NEO Problem- By the end of the year Spirit will have 46 airplanes parked, that’s about 25% of the current fleet. By the end of next year, they will have over 90 NEOs of the fleet parked, almost half. And The 300 day turn around time from Pratt just became a 400 day turn around. This NEO problem will also be a huge show stopper for any other airlines interested in merging with Spirit.
3. The ULCC Business model- It’s dead in the United States. No one wants to be nickeled and dimed in our culture. The morons that run Frontier and Spirit have raced to the bottom of the section 8 barrel, trying to find the lowest hanging fruit in every ghetto of America. That business model fails because it does NOTHING to drive a Premium Product and high revenues. The Legacies make all their money from Credit Cards and their Premium First Class Services. Spirit is hemorigin money! Frontier is in trouble, Avelo is in trouble, Breeze hasn’t had the financial success everyone thought it would, they all will end up failing because the RASM is far to low to win in the end. The Legacies are printing money and have absolutely mopped the floor with the ULCCs post Covid.
4. The reputation- Spirits reputation is atrocious! Spirit is one of the ****tiest airlines in the world as far as customer experience goes. They also have become one of the most hated companies in America. They are the laughing stock of light night television and the bunt of every airline joke in comedy clubs across the country. This Management team took Ned’s great airline and drove it into the fu*king pavement. There won’t be any customer tears shed when Spirit finally goes away.
5. The Blocked Merger- When Judge Young killed the deal with JetBlue, he just created a legal precedent that sealed Spirits demise. This antitrust win for the DOJ will still stand even after a bankruptcy is filed. This likely means the only players on the table left to actually be a potential merger candidate would be Frontier or Allegiant. Have fun with Uncle Franke and Indigo, they are a true model of labor relations.
6. Attrition- It’s about to skyrocket. Spirit has 20 year captains, 15 year Check Airman, and 10 year Chief Pilots pulling the rip cord. This Fall I believe attrition could hit north of 100-150 a month. They will get behind and they will not be able to catch back up. Especially when half the check airman all quit in a 6 month Span
As for bankruptcy, Chapter 11 worked for the Legacies because they either used it to merge, or they used it to shed debt, and they were too big to fail. They also owned a lot of assets that helped them survive by having collateral to back the new financing. Spirit owns next to nothing. They are down to 23 Unencumbered Airplanes and a Hangar in Detroit. There is nothing left to leverage.
In Bankrrupcy, the company also has to prove to a judge that there is a viable path forward. Spirit has been hemoraging money for 4 years in a row. They had 1 profitable quarter in the past 17 quarters. When the Judge sees there is no path forward, he will liquidate, because that will by far produce the highest level of compensation to the debt holders.
In the past 5 years, there have been 14 air carriers that went under. This has put more pilots on the street than Spirit has in its ranks by 3 fold. To say America won’t let Spirit fail in this day and era is dillusional thinking. I hope it doesn’t happen, but I’d give it at least an honest 50/50 chance at this point. Any one who actively isn’t trying to jump into a life boat is like the people that stayed on the Titanic so they could cheer on the ship.
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