He said straight up that Spirit Airlines is aiming to be the Dollar General of the skies. If you want something luxurious, go elsewhere. But he called out the other airlines who pretend like they are the Nordstrom of the skies, but don’t actually live up to that.
At least in my anecdotal experience.
That lends more credence to the comparison against Dollar General and similar discount stores. Dollar stores generally charge a higher price relative to quantity, but they offer smaller quantities than big box stores which allows their customers to spend less (but also get a lot less). Wendover on YouTube did a video on this recently [0].
The last time I did they canceled my flight overnight at 2:30am and forced me to rebook my ~$300 flight at twice the cost -- and it was leaving the same airport at the same time to the same destination.
And it was a miracle that I woke up to the email alert and was able to rebook my flight before it sold out anyway.
Of course, I wouldn’t fly spirit if I had a complex flight itinerary or needed to be 100% sure I would arrive when expected. Then again, I’ve had more issues with other airlines (looking at you Alaska) as well, so go figure.
All that being said, the invisible variable most of us miss is plane maintenance. I don’t know what spirit’s record is in particular on this axis, but some airlines really skimp on maintenance costs, sometimes leading to entirely preventable disasters ([0] to name one of many)
[0] https://en.wikipedia.org/wiki/Alaska_Airlines_Flight_261
As a lite traveler Spirit fits my needs and I have more money in my pocket for my trip(s). As well I'm off the plane with my book bag and out of the airport quickly! I always get an aisle seat up front.
The problem with aerospace is that it has a very high barrier to entry, so consolidation ends up hurting the consumer more often than not. Same as other infra related industries like telcos and civil engineering work that require fairly massive upfront capital and regulatory investments to operate.
Better to leave a hole in the market to encourage new entrants, even if it means consumers suffer in the short term.
Nobody is clear about the right move on how to deal with this problem. There's no sure fire conclusion.
[1] Once you account for the padding, the angle you have to sit at, etc. Even if you aren't unusually tall, it is noticeably awkward and cramped.
Another important item from the trial - only 1/3 of Spirit customers pay the low fee without add-ons. The rest go for something more Jet Blue like anyways.
The precedence that the judge set here is more important than the actual merger. If any tiny subset of customers are harmed the deal cannot go through. I was really surprised to see this from a judge appointed by President Reagan. This could really crush M&As in America.
The same cannot be said for JetBlue
> “If JetBlue were permitted to gobble up Spirit — at least as proposed — it would eliminate one of the airline industry’s few primary competitors that provides unique innovation and price discipline,” Young wrote. “… Worse yet, the merger would likely incentivize JetBlue further to abandon its roots as a maverick, low-cost carrier.”[2]
> This could really crush M&As in America.
That's a bit hyperbolic. If it does crush anti-competitive / anti-trust mergers, that's a win in any capitalist's book
[1] https://money.usnews.com/investing/news/articles/2024-01-16/... [2] https://www.washingtonpost.com/transportation/2024/01/16/jet...
The best argument I see for allowing the merger is that Spirit has been consistently losing money since the pandemic and may no longer have a viable business model. If they're destined for shutting down in the long run anyway, then you may as well let them attempt to merge, that'll probably lead to less of their market share winding up with the 4 biggest than them simply closing up shop will.
In the new era, practices, perceptions and mission statements have to also be up to a standard, not just statistics. I wonder how long this could go on for.
Really? How old is he, 80? Why do Americans insist in having such geriatric leaders, they're starting to make Iran look normal...
It's an utterly feckless uneven application of the rules to everyone's detriment. You couldn't have designed a worse airline industry if you tried.
Why not view it as, this is a good start and hoping it continues to prevent even more consolidation and monopoly in airlines and other industries? The notion that there has to be more consolidation to compete is only good for the companies monopolizing - not the consumer. Why should we be helping them make more profit by abusing market power versus delivering better products and competing?
Yeah, exactly. Spirit competes with JetBlue on multiple routes which would otherwise be monopolized by the big three (American, United, Delta). This merger would have given JetBlue an almost total monopoly on the east cost low fare market. An unconditional win for the consumer.
https://www.courtlistener.com/docket/66962142/united-states-...
[1] https://www.ign.com/articles/ps5-has-outsold-xbox-series-x-a...
That suggests that there are other reasons to block a merger other than preventing a monopoly from from growing.
Microsoft & Activision merging only moved them to the 3rd largest studio. Also it has plenty of pro competition factors allowing them to compete against Sony & Nintendo. They also made deals with many other distributors about expanding their game reach via cloud services. Lastly it allowed them to acquire King. Microsoft would like to break into mobile gaming more & there is a very monopolistic walled garden ala Google & Apple.
Go after Microsoft for their monopolist tactics but this wasn't one.
https://www.wsj.com/articles/unfortunately-big-is-bad-is-bac...
We have seen this with of the merger challenges that have happened since Biden took office. Trump also tried to block a few, mainly out of his own ego from what I could see. (AT&T-Time Warner Deal specifically).
JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines.
I don't understand how this is bad for competition when we desperately need more competition that can actually compete.
However you should be sad in general because this is a terrible judgement that dooms a business from taking the only way out that would have been a reasonable outcome for its employees, shareholders and users.
I'm not familiar with how the process works, would JetBlue now have to compete with larger airlines for these assets if Spirit goes under?
"JetBlue's biggest problem remains their access to airports, if they were able to get more access to that they would likely be a serious threat to the bigger airlines."
That is like 'Their political party is cheating, we need to cheat bigger to win". That is leaning in to making the situation more and more rigged, more and more of a failed market / system.
I will leave it as an exercise to the reader to go read about how less players in a market bad for competition. Matt Stoller is a good place to start.
JetBlue can bid for slots at an airport, like anyone else. If bigger airlines are blocking them, lets fix that market to be competitive, NOT "let's help the market degrade into Oligopoly faster".
This seems to be a common theme in politics. A bad decision was made by the previous generation. Now the current generation, seeing that the decision was bad, makes decisions that should have been made in the first place. The problem now is that the bad decisions have already been made, and what at one point would've been a good decision is now either exacerbating the problems caused by the bad decisions or is at best failing to remedy them.
It comes up a lot in healthcare and immigration for example. What constitutes good policy is highly conditional on the current state of the world.
Considering the talk around Spirit being on the verge of bankruptcy it seems like it may be a mix of the 2 and the first one being an important part of this conversation.
just saying lets fix the market while ignoring that there is a problem with the market with a potential thing to address part of it right in front of us is just passing on the problem until we have the perfect solution.
That perfect solution may not be viable or may be many years away for a variety of problems (not the least of which being just a space problem at airports).
We have a bad tendency to try to get the perfect solution to a problem which stops us from having anything.
Some more discussion: https://news.ycombinator.com/item?id=39019876
