Spirit Airlines, working its way through its second bankruptcy in less than a year, is rapidly shrinking its size and reach in an attempt to cut back to operating only the services where it has its best chance of a profit—but will cutting its size by half be enough?
The airline has gotten court approval to return 114 of its 214 planes to the leasing companies that own them, including all but a few of its newest, most efficient planes. A third of its flight attendants—about 1800—have been furloughed, and hundreds of pilots dropped, while cutting dozens of routes and leaving 13 airports altogether.
But while those moves will obviously slow or stop the outflow of cash or new losses, the question remains whether there is a path to profit for an airline that almost invented the ‘ultra low cost carrier’ segment of the market, once the major mainline carriers invented basic economy? That’s particularly true on the many routes Spirit has flown in competition with them; the legacy airlines have advantages when the fare is the same—more frequent flights, more connections and a perception (whether justified or not) of better service and less nickel-and-diming.
Spirit’s moves after the first bankruptcy seemed to indicate that the airline itself doubted the ULCC model, and talked up plans to add premium classes, more services, and to expand its loyalty and credit-card programs, but that talk isn’t showing on Spirit’s website now; what’s there is still the emphasis on low prices and—perhaps in desperation—an offer of enough loyalty points for three free flights if you’ll only, please, book one flight this month.
A cogent question is: As the important holiday flying season approaches, will even enticing offers induce families to trust their holiday flying to an airline that could abruptly shut down, as Play did last month?
Several other low-cost carriers are doing better, in part because they have carved out niches that compete less directly with the mainline majors, and are able to make profits, although not as great as in the past in some cases. Allegiant has chosen to cut costs by moving from LAX in Los Angeles to Burbank; Sun Country, all of whose flights are to or from Minneapolis, relies on charter business and operating Amazon freight flights.
Finding spaces of their own has been key for some; Allegiant says 75% of its flights have no mainline competition, and Breeze, which calls itself a ‘premium low-cost carrier’ has no direct competitor on over 80% of its routes. Both focus on serving cities that have little to no service from the majors, and in Breeze’s case have focused on flying a mid-size plane, the A220, that can be more easily filled in those markets.
Image Courtesy Spirit Airlines Media
