A lot of people forget this HUGE piece to the puzzle. There is a place for a ULCC IF there is no competition for that slice of the market. For a while, Spirit was the only player in that market and they had it all to themselves. When basic economy was rolled out at the legacies and other airlines adopted the model, Spirit got massively diluted and had to cut fares further to retain market share, often at a loss. This is when the margins started compressing pre-COVID. Then Covid hit, and everything went tits up.

 

In line with the rest of his STUPID decisions lately. But it will buy the company another 6 months. Whoptie do

 

It was wildly successful because it was arguably predatory. American consumers were either unfamiliar with the unbundling concept or the market segment was too stupid to pay attention. That's why ancillary fees were a majority percentage of the revenue.

When you add up the cost of traveling with luggage, it was hardly low cost. You might save $20/ticket over the legacies. Which was not worth the hassle in case of delays/cancellations as Spirit didn't have the capacity/frequency/structure to reaccommodate passengers quickly.

People wised up and now either travel with no luggage or they travel with someone else. Or pay an extra $20 flying basic economy with a "more reputable" brand.

Lastly, have you looked at the pay of the likes of Ryan Air in Europe? It's significantly less than than their "national main brand" counterparts and they skirt labor laws with the way their bases are structured. When Spirit's labor cost creeped up, it was the last straw, it was no longer a low cost airline, just a crappy one.

 

Why does Sun Country have such large margins?

 

Not even 6 months. The DIP is due to be repaid by July 14th and its $450M so that money is going to the hedge funds. Yes it will reduce Spirit's debt a bit, but Spirit's issues aren't its debt, although that's the barrier to being acquired. Its the daily cash burn ($2M a day in Feb) that is the issue and this money is going to the creditors very soon.

 

Sun Country is a niche airline with 500 pilots. They're a "hometown" airline in MSP. They're small and know their market and able to quickly pivot in the seasonal vacation market.

Also their labor rate is noticeably less than legacy sized airline.

My family actually flies Allegiant quite a bit even though at times it costs more than a legacy. It allows direct flights to vacation spots out of my non major hub city.

 

Great now the taxpayer has to dump more money on the fire. What a waste.

 

****ed my tax dollars are going to go to this

 

Talk about cart before horse.....

"Nearing deal" and "advanced discussions" mean diddly until they "sign on the line that is dotted."

 

Blue Horseshoe loves Spirit Aviation.