Spirit Airlines faces liquidation as fuel costs bite. But Its death took cooperation.
Spirt Airlines Faces Liquidation
Bloomberg reports Spirit Airlines at Risk of Liquidation as Fuel Costs Bite
Spirit Aviation Holdings Inc. is at risk of being liquidated as rising jet fuel prices spurred by the US war with Iran further squeeze the bankrupt budget carrier’s finances, according to people familiar with the matter.
Any decision by the company to potentially liquidate could come as soon as this week, said the people, who asked not to be named because the discussions are private. The situation is fluid as Spirit engages in ongoing talks with its creditors, and its plans could still change, they added.
Spirit’s past attempts to merge with other carriers haven’t panned out. Before filing its first bankruptcy, the carrier agreed to be acquired by JetBlue Airways Corp., but a federal judge blocked the tie-up in 2024 on antitrust grounds.
Airlines broadly are grappling with higher jet fuel prices due to the US-Iran war and the effective closure of the Strait of Hormuz, a key passageway for oil. The conflict has brought the possibility of major shakeups in the aviation industry to the fore. United Airlines Holdings Inc. Chief Executive Officer Scott Kirby has even pitched a possible tie-up with American Airlines Group Inc. to President Donald Trump, though the considerations predate the start of the war.
A Dual Effort
Flashback January 16, 2024 Federal Judge Blocks JetBlue’s $3.8 Billion Acquisition of Spirit Airlines
A federal judge on Tuesday blocked JetBlue Airways’ JBLU $3.8 billion deal to buy Spirit Airlines, rejecting a merger that he said would hamper competition and lead to higher fares.
The ruling thwarts what would have been the biggest U.S. airline merger in over a decade. It marks a victory for the U.S. Department of Justice, which sued last year to prevent JetBlue and Spirit from going ahead with their tie-up.
Young agreed with the Justice Department, which had argued that the acquisition would remove an ultra-low-cost carrier that puts pressure on other airlines to keep down fares.
“The elimination of Spirit would harm cost-conscious travelers who rely on Spirit’s low fares,” he wrote.
The Justice Department under the Biden administration has taken a tougher stand on consolidation, and airlines have been a particular flashpoint, as officials have grown more concerned that a series of mergers in the past two decades has diminished competition.
That’s the Spirit!
Since this is a DOJ victory it’s time to celebrate.
Biden landed the first punch and then Trump then delivered the knockout blow.
Biden’s move was done in the name of preserving competition.
That brilliant idea means there’s one less airline now.
Everyone involved can take a bow.
Meanwhile the strait that Trump proclaimed open, sure isn’t.
For discussion, please see Iran Denies the Strait is Open. No Surprise, Trump Lied About a Deal
Trump is much better at manipulating futures than negotiating deals.
Expect more stress over diesel, gasoline, jet fuel, fertilizer, and aluminum as long as the strait remains closed.
Perhaps Trump should stop those ignorant and stupid judges from blocking business mergers? It seems to me that that would do a great deal to rescue American industry. Fools from the universities always think they can play around with the rules of free enterprise in order to get more out of it for their own evil purposes.
Did Trump set a world record for fastest repudiation of a lie?
Friday: “Iran promised to never close the Strait of Hormuz again”
Saturday: Oops
The CEO of Spirit lied in court when asked if Spirit was in danger of bankruptcy ( something the judge can take into consideration to approve the merger ). Spirit filled bankruptcy a few months later.
The best part of flying Spirit Airlines (once in 2013-14) was the flight attendant who cracked numerous jokes about Spirit. This was high comedy at 35,000 feet. We were so grateful when he brought our young children 4 oz cups of water without the usual credit card charges.
His jokes were superb about credit card readers on bathroom doors, which Spirit allegedly was about to add. It would have been a painful flight except for such comedic talent.
Spirit’s safety record is terrible. They liberate spirits from bodies.
Good riddance to this ultralow budget experience.
Well not sure about this one. Seems in general a few parent corporations own pretty much every business. Just look in the food industry / phone etc.
I’ve never flown Spirit, but by all accounts and from talking to people that have, it was a terrible experience – the Dollar Tree of budget airlines, no wonder it’s going under.
I flew Spirit once. Once.
So the Justice Department blocked their 2024 proposed merger with JetBlue on anti-trust grounds.
How does them going out of business make any difference, competition-wise?
Maybe Jet Blue will also be on the precipice without the Spirit assets and economies of scale they would have acquired.
TRUMP sending his MOSSAD duo back to the negotiating table….give me a break…how about some negotiators that aren’t NY slumlords?
ALL airlines should have gone bankrupt during COVID but the government stepped in and bailed them out. I think Southwest was the only one that didn’t take government handouts.
But if Spirit had merged with JetBlue, there would have been one less airline anyway?
Anyone planning on flying anywhere this summer better be careful with their flight purchases, you don’t know which airline will go bankrupt again and leave you stranded. The larger the airline the less likely you get stranded since big air will likely get bailouts again but small ones will be thrown to the wolves.
Europe and Asia will run out of fuel in a few weeks if Iran situation not resolved.
C’mon Mish. How about we blame the senior executives and controlling shareholders of Spirit for running the company into the ground. They took out too much debt and priced flights too low to be long-term profitable. I also doubt Biden was sitting around, studying the webs of corporate ownership and made a conscious decision to go after the JetBlue merger. His mental faculties weren’t capable of that. In fact, the DOJ was simply enforcing law passed by Congress. Which is what it is supposed to do. If you want to take the onus off corporate leadership and put it on the government (the right thing to do for an avowed libertarian) we should probably blame Congressional Republicans for not focusing on getting rid of anti-monopoly laws. Remember, price competition is anti-capitalism. Just look at the massive competition and deflation in socialist China! Is that what we want here?
my take: It was a Biden thing and Donny was/is too busy to deal with everything
Perhaps now JetBlue will take parts of them over, without the overhang
Maybe Their creditors will get the haircut they should have gotten a while back
good morning Mischy baby
Spirit Airlines should have been shut down long ago….you ever see the animals that fly on that airline.
Hundreds of videos:
https://www.youtube.com/results?search_query=spirit+airlines+fight+at+counter
Yeah but now that there isn’t an airline for animals, the animals will come to your favorite airline. I’m getting close to just flying private jets because even business class is full of Karens now.
What a vaguely racist and at a minimum dick thing to say
define “racist” for me
Nope, they’re too stupid to get ID’s for voting so too stupid to figure out how to use another airline
I’ve taken Spirit exactly once – on an emergency basis. The joy their employees seemed to take at enforcing Spirit’s vindictive policies was shocking. It’s one thing to have a low fare and charge for every add-on. It’s another to make it painful for first time Spirit flyers to know how their system works and to laugh at and mock their own customers. People don’t want to patronize a company that treats them like suckers.
Airlines normally hedge against rising jet fuel price. It is considered as safe policy accross the industry. 50% hedge would be appropriate.
Spirit was likely viewed as terrible credit risk and no commodity trader wanted to deal with it unless Spirit puts down some collateral. There was likely no collateral available.
I dunno Mish. Literally the only airline merger the govt stopped in the last… 50 years? And at the time the govts message seemed to work, prices were down, though I suppose that could be due to plenty of other factors. Prices were high post pandemic.
Price fixing is illegal. Did you know Spirits board at the time actively encouraged shareholders to reject the deal because they (rightly) thought it wouldn’t get through regulation?
Plus they had bad financials to start with didn’t they have two bankruptcy filings last year?
It’s weird to me how media and telecommunications company mergers all seem to be allowed but a couple small airlines couldn’t merge.
Although I think the DOJ/FTC has been asleep at the switch for oh so long on antitrust grounds, given i can think of precisely 2 players that hold 95% market share in a dozen industries (inflationary in most cases), how they decided that JetBlue+Spirit was an issue after allowing, in the SAME industry, the tie ups of United+Continental+, Delta+Northwest, American+(USAir+AmericaWest), defied all precedent and common sense. Alaska+Hawaiian, no problem.
But JetBlue+Spirit…now hold on right there!
Everyone here hates on Biden, for good reason… But Lina Khan was the only FTC head worth a damn in my lifetime!
Spirit has been dying for a while.
It’s a very poor flying experience unless you are just doing short hops to nearby cities with no luggage. Otherwise you are nickle and dimed to death for everything.
Those planes were like a flying zoo
Who doesn’t like the zoo?
How about: “How Biden accidentally got Trump elected by being a worse president than Trump in his first term, going senile and incoherent, and then offering the pathetic Kamala as the only other choice.”
And then now Trump is destroying the country. The end.
The difference between Vietnam and Iran is Trump knew how to get out of Vietnam.
Amazing how he knew how to pull out when it really counted….Too bad his old man didn’t learn that lesson.
Oldie but a goodie…