Within 24 hours, Spirit Airlines went from being the most hated airline in America to the most mourned. For years, Spirit was the industry’s favorite punching bag, clowned on for “suggested” departure times and a business model that felt like being shot into the sky with nothing but a prayer and a middle seat. However, on May 2nd, the laughter stopped. Spirit Airlines, which had filed for Chapter 11 bankruptcy twice in the last year, finally folded. With no government bailout, the company had begun liquidating its assets, leaving a massive dent in the American traveler’s wallet.
The price of flights was no longer a laughing matter, but the heart of the airline remained intact. Just hours after the announcement, it was the people who managed to salvage a sliver of hope before the day was over.
Here’s what you need to know about the past, present, and future of Spirit Airlines – the next possible people’s princess or just another story of bankruptcy.
From descent to crash landing
What started off as a turbulent descent turned into a crash landing for Spirit Airlines. Over the last 18 months, the airline had filed for bankruptcy twice and had attempted restructuring in efforts to cut its debt from $7.4 billion to $2.1 billion. Of the $7.4 billion, $2.5 billion were from COVID-19; however, it wasn’t the pandemic that ended the company. Instead, the final landing was a result of geopolitical chaos and failed lifelines.
For the airline, a large portion of the restructuring attempts were dependent on stabilizing fuel costs. Despite this, timing was not on their side. The recent outbreak of the Iran war sent jet fuel prices sky high. As a result, this presented a direct challenge to Spirit’s pricing structure. Evidently, the company’s “unbundled” fee model couldn’t keep up with the cost of flying. The airline was thus presented with the choice of abandoning its competitive advantage for survival or sticking with what made it famous and risking it all.
In a final attempt to gain a lifeline, Spirit turned toward the nation’s capital. The executives of the company argued that their services were essential for national emergency mobility. By utilizing the Defense Production Act, they had hoped to secure a $500 million federal bailout. The bailout would have given the U.S. government a 90% stake in the airline. However, by the beginning of the following month, the government walked away.
By May 1st, it wasn’t just the planes that had ran out of fuel. The whole company had.
the first domino?
The market’s reaction was immediate. Spirit’s exit resulted in a massive vacuum for the ultra-low-cost carrier market. Referred to as the ULCC market, the responsibility and opportunity for affordable travel fell on Spirit’s primary rival: Frontier. Frontier Airlines rushed to absorb as many customers as possible, especially the ones that were stranded from their previously cancelled flights. However, this rush and strain on the industry showed in a tragic and unexpected way.
On May 8th, almost exactly a week since the shutdown of Spirit, a devastating security breach at Denver International Airport served as a bleak reminder of the current chaos. A pedestrian had managed to scale a perimeter fence and run into the runway just as a Frontier Airlines plane was taking off for LAX. The plane struck the individual at high speed, ending in a fatal collision and massive engine fire.
Although this incident was a security failure and not a technical one, the fallout was felt across the airport. The pilots aborted takeoff and evacuated all 231 people onboard the aircraft.
It has already been a tough year for the flight industry. With the recent chaos of TSA employees going on strike, the firing of several hundred FAA employees, and the recent surge of jet fuel costs, the industry’s nervous systems are fried. The Denver tragedy highlighted the furthered frantic, chaotic environment of a post-Spirit world. With the company gone, there have already been documented airfare jumps from 23% to 70% in airports located in places like Fort Lauderdale and Las Vegas. Without Spirit’s pressure on prices, carriers like Delta and United no longer have to compete for Americans’ wallets. In combination with the already elevated gas prices, travelers can expect to face a summer of record-high fares.
a lifeline
While the assets were being liquidated, the citizens of the internet were busy trying to buy them. Despite the airline being a punching bag online for years, it was the people’s punching bag. And the public wasn’t willing to say goodbye to it so easily.
Immediately after the carrier announced it was ceasing operations, Hunter Peterson, a content creator on TikTok, launched a campaign that initially started as a joke. His idea was simple: if the government wouldn’t support affordable travel, then the people would for themselves. Peterson proposed turning Spirit into a non-profit carrier, owned entirely by its passengers.
The response from the public was clear. Within 24 hours, the movement’s website crashed under the load of hundreds of thousands of visitors. By May 9th, 371,000 “founding patrons” had already pledged a grand total of $337 million to buy back the airline. Peterson wasn’t just met with the voices of the public but also the voices of aviation lawyers, developers, and former airline executives looking to see if the passenger-led airline could actually take flight.
Although the current number raised is only a portion of the billions needed for the operation to actually fly, the movement represents something deeper – deeper than the pockets of billionaires. It is a profound response of the American public willing to fight for the sky. We spent years laughing at Spirit, but as the first summer of record-high temperatures and fares approaches, turns out the joke was on us all along.