Spirit Airlines is preparing to sell its fleet of bright-yellow airplanes and shut its doors, The Wall Street Journal reported today. The low-cost carrier is running out of cash and a government bailout has failed to materialize.
Spirit has been beleaguered by high fuel costs, like other airlines, and other problems going back more than a decade.
Some of Spirit’s issues are unique to the airline, but there are also structural issues with ultra low-cost carriers, said Robert Mann, an independent airline industry analyst.
Over the past 15 years, major airlines have rolled out cheap travel options to compete with them.
In 2012, Delta became the first U.S. airline to introduce basic economy, which allowed customers to buy cheaper tickets with the caveat that there’d be restrictions on refunds and seat selection. Other major airlines eventually followed suit by establishing their version of basic economy, Mann said.
United had software that would allocate enough basic economy seats to attract budget-conscious consumers without displacing the people willing to pay higher fares, said Henry Harteveldt, airline industry analyst at Atmosphere Research Group.
Major airlines have also expanded their fleets, increasing the amount of economy and basic economy seating. That’s prevented ultra low-cost carriers like Spirit and Frontier from picking up customers who couldn’t find seats on those airlines, Mann explained. |
