I guess we’re used to taxpayer dollars just being lit on fire, but this is next level.
In this post:
Trump reportedly plans rescue deal for Spirit Airlines
The Wall Street Journal reports that the Trump administration is nearing a deal to rescue Spirit Airlines, which is on the verge of liquidation. Spirit had proposed this concept, but it’s wild that this is even being considered.
Under the agreement that’s reportedly being discussed, the government would loan the airline as much as $500 million, and in return, it would receive warrants to take a potential significant stake in the airline.
Let me of course emphasize that this is according to people familiar with the matter, and it remains to be seen what comes of this. However, this concept is supported by comments that Trump made just a couple of days ago, where he said “I don’t mind mergers,” and “I think I’d love somebody to buy Spirit, as an example.” Trump even suggested that “maybe the federal government should help that one out.”
This investment would help keep Spirit in business, as the airline is currently in Chapter 11 bankruptcy for the second time in two years. When the airline emerged from bankruptcy the first time, it only addressed its debt situation, though it did nothing to help with the carrier’s horrible operating margins.
Now in the second round of Chapter 11 bankruptcy, the carrier’s turnaround plan is essentially to shrink into profitability. But even without the recent hike in jet fuel prices, it’s highly questionable how successful that strategy would be. Not only has Spirit not turned a profit since before the pandemic, but the airline has the worst margins in the industry.
This is a terrible idea, and sets an awful precedent
It’s really unfortunate to see the tough financial spot Spirit Airlines is in, and the airline industry in the United States has evolved in such a way that it’s really hard for the smaller carriers to compete. Obviously the current jet fuel situation only makes matters worse.
That being said, no matter how you slice it, this simply sets an awful precedent, and makes no sense:
- Why should Spirit get support from the government, but not all the other airlines in the country that are struggling? What about Frontier, JetBlue, etc.?
- If the government takes a stake in one airline, doesn’t that create a conflict of interest, in competing with airlines that the government doesn’t have a stake in?
- We have to be honest, giving Spirit another $500 million just pushes the inevitable down the road by a few months, as the carrier still isn’t turning an operating profit, even before the spike in jet fuel prices
I get that a president might not like the optics of a “value” airline liquidating while they’re in office, but Spirit’s problems go back to long before the current problems. Trump has already been vocal in blaming Spirit’s issues on Biden, given that JetBlue’s takeover of Spirit was ultimately blocked on anti-trust grounds (as I’ve always said, I strongly disagreed with the Biden administration’s stance there).
But folks, this is just a really bad idea. Regardless of political affiliation, I have a hard time imagining that any OMAAT reader will find this to be a good idea? If you do, please sound off in the comments, and let us know what you think the limits of government ownership of airlines should be. Should the government just invest in all airlines?
If you ask me, this signals one other thing — if there is any interest in merger activity that isn’t between airlines of the “big four,” I think this is about as clear of an indication as we could get that something wouldn’t face too much regulatory scrutiny.
Bottom line
The Trump administration is reportedly nearing an up to $500 million lifeline for Spirit Airlines, which matches comments previously made by Trump, about how he’d like to save the airline. This would reportedly come in the form of a loan, and in return, the airline would receive warrants to take a take in the airline. This is such a bad idea on so many levels… let’s see how this plays out.
What do you make of taxpayers funding Spirit’s continued operations?
Socialize the risks but privatize the profits. This has been the way for American capitalism.
What has happened is a critical mass of points and miles collectors. So if you can afford to pay cash for your flight you do. If not, you save points and miles from credit card spending, redeem for flights. Difficult for ULCCs like Spirit and Frontier with weak frequent flyer program to compete with this dynamic. Same dynamic with hotels - look at non-branded in other countries compared to similar major name brands down the street in the same cities.
Boarding Area used to be the place where you could find great stories and editorial opinion on all things "air travel". Now it's just another Leftist shill for TDS. Sad but not surprising.
I'm blocking their links sending this to junk mail.
Just wrong. Let the market decide fate
Incredibily dumb...Spirit adds nothing to the traveling options unless you want to be late, fly in a dirty plane (if it even runs), be treated like cattle, and be nickle and dimed this is the airline for you. People have chosen not to use their hard earned money for Spirit and I don't think people want the government to use their hard earned money for Spirit either.
Let's have a comparison, how is it different than the US government deciding that some banks are worth helping and not others? Car companies? ..... I am not trying to ask the question but I am trying to show it is basically no different than other industries.
Amazon is laying off 16k workers. Meta just announced they are laying off 8k and Disney reported they are terminated 1k of their workers. Workers across the country lose their jobs everyday. Why do the employees at Spirit deserve special treatment just because they work for an airline?
We won't be able to afford to fly like we did with Spirit! The big four can't wait to gouge us more if Spirit goes under! They are already under cutting every route that Spirit has trying to finish them off! This is one bail out I support just because of what I said above! The big four want a pricey monopoly. I'll never pay the prices that the big four want. I'll stay home...
We won't be able to afford to fly like we did with Spirit! The big four can't wait to gouge us more if Spirit goes under! They are already under cutting every route that Spirit has trying to finish them off! This is one bail out I support just because of what I said above! The big four want a pricey monopoly. I'll never pay the prices that the big four want. I'll stay home (and I fly 15+ flights a year) if I can't fly Spirit or another "fair" priced budget airline. Spirit's prices, planes and its employees have been wonderful for the middle class! STOP THE BIG FOUR FROM MONOPOLIZING US AIR TRAVEL PRICING! They will throw Frontier Allegiant and JetBlue under the bus if they get away with finishing off Spirit!
Wake up people!
Any bets of the likely new name, 'The Spirit of Trump' ?
Another failed airline to add to his CV.
Do you remember when the government bailed out all those automobile companies because it was terrible for the country not to go to their rescue?
Please let Spirit die! All this airline does is let the poors get to places they don’t belong and ruin the experience for everybody else.
lol!
Millions for airline bailouts, but nothing for transponders on LaGuardia fire trucks.
Sounds like the government is doing this loan to push Spirit to merge, perhaps as suggested with JetBlue, or perhaps with Frontier, who has been scared off multiple times already on Spirit's current condition.
Very bad idea! Not only does this position Rump to claim ownership of the airline (and he most likely will), but opens the door to government run airlines, not good for the country! Also, this needs to be approved by Congress! Not likely!
How is this different than Amtrak? They have never turned a profit and never will. Yet they are at the table every year...
Amtrak has a monopoly in most USA passenger rail markets, unlike airlines.
I can see at least two "rational" reasons for this bailout:
1. Helping out a friend who owns a lot of current Spirit debt.
2. Postponing the news about business failure, job losses, and disappearance of cheap airfare until after the mid-terms.
And I still don't get all the people who are hating on Spirit. They are very transparent with their pricing model, and they offer great value if you know what you...
I can see at least two "rational" reasons for this bailout:
1. Helping out a friend who owns a lot of current Spirit debt.
2. Postponing the news about business failure, job losses, and disappearance of cheap airfare until after the mid-terms.
And I still don't get all the people who are hating on Spirit. They are very transparent with their pricing model, and they offer great value if you know what you are doing. You could load up an SUV with kids/dogs/stuff for a vacation with extended family in Myrtle Beach, and an adult or two that don't fit in the car could fly Spirit for $60 roundtrip with no luggage. Too bad this didn't work out as a business model.
That’s exactly how we vacation once every other Spring! My wife and I drive our hybrid Lexus SUV loaded with the gear of six people, and drive from CT to somewhere warm in SC or FL. The other four fly down on a new MX 220 empty-handed almost for free.
Funding Spirit, btw, is socialism in its purest form. Might as well re-regulate the entire industry and bring back the CAB.
Trump: *Bails out Spirit*
Dems: What a horrible idea!
Trump: *Doesn’t bail out Spirit*
Dems: BuT 14,000 pEoPle LoSt ThEiR jObS!!!
And now your boy Chump is going to bailout Emirates/UAE! Owned by an autocrat worth over $300B!!!
Ken Griffin, a major Trump/Republican donor, owns a lot of Spirit bonds. Questions?
25th amendment.
I assume this is to have a deportation airline , no?
Don't want Spirit to fail, but seems there are no good options left. Sad. It was a fun run
Ultimately, I doubt is going to happen. First, there's going to be some party(ies) marching into a court and getting a temporary order/stay to stop any bailout, if only to screw Trump. And finding a judge to sign such an order will be a very easy task. Spirit doesn't have the luxury of time to let a court battle play out.
Second, it doesn't seem anyone else in the administration thinks this is a good...
Ultimately, I doubt is going to happen. First, there's going to be some party(ies) marching into a court and getting a temporary order/stay to stop any bailout, if only to screw Trump. And finding a judge to sign such an order will be a very easy task. Spirit doesn't have the luxury of time to let a court battle play out.
Second, it doesn't seem anyone else in the administration thinks this is a good idea.
Third, is the matter of creditors that might believe this is nothing more than throwing good money after bad money and eroding the value of assets that can be liquidated to pay their claims. If they object and the Bankruptcy Judge steps in the bailout is likely out.
PROBABLY NOT WHAT READERS WANT TO HEAR......
The simplest solution is to cap credit card interchange fees, which is the 2% or 3%+ discount that merchants pay for every credit card sale. The Banks pay so much annually to the likes of Delta, United and American for award points given to Bank card users that an operating breakeven or loss becomes a massive annual profit. The airlines are issuing points that cost them nothing...
PROBABLY NOT WHAT READERS WANT TO HEAR......
The simplest solution is to cap credit card interchange fees, which is the 2% or 3%+ discount that merchants pay for every credit card sale. The Banks pay so much annually to the likes of Delta, United and American for award points given to Bank card users that an operating breakeven or loss becomes a massive annual profit. The airlines are issuing points that cost them nothing (therefore simply printing money) and profit 100% when points expire (because they can be so difficult to use). In the meantime the big 3 airlines get a huge interest free loan until the points get redeemed for a “free” flight, usually a seat that would otherwise go empty, or with dynamic pricing, are effectively sold at their going rate.
The low cost carriers are excluded from that game as they don’t have frequent flyer programs that the Banks want to support. If the interchange fee was cut to under 1% (just enough to cover fraud and processing) merchants and the average consumer would gain, there would be no subsidy, largely by the general public, of the dominant airlines. Low cost carriers would be able to charge fares that would keep them solvent. The major airlines would have to raise fares to stay in business. Although that would be a concern it would be better than no real competition and a huge subsidy by the public.
Another benefit would be to eliminate what is a massive tax leakage as points that are awarded for business travel often result from a corporate tax deductible expense, but the points are typically used by employees in their personal capacity, which is not reported or declared as a personal taxable benefit. Taxpayers lose revenue for the deduction but there is no offsetting tax receipt from the "benefit".
You are delusional.
Best solution, already legalized/mandated in all but 2 states, is for merchants to have the choice to charge those credit card interchange fees to the customer in addition to the price of their purchase. Already do this anyway for sales tax, tips, "destination/resort" fees, etc. Then, those who value our points that much will pay those merchants with our rewards cards, and those who dont will pay cash or debit (or spend with rewards cards...
Best solution, already legalized/mandated in all but 2 states, is for merchants to have the choice to charge those credit card interchange fees to the customer in addition to the price of their purchase. Already do this anyway for sales tax, tips, "destination/resort" fees, etc. Then, those who value our points that much will pay those merchants with our rewards cards, and those who dont will pay cash or debit (or spend with rewards cards at merchants that dont surcharge). Walmart and Kroger trying to bring in more upscale business so they will surcharge before they will refuse the "premium" cards they claim to want the right to refuse. Please, PTO, leave our points and miles alone!
Agree this is a terrible idea and sets an awful precedent. While I'm no fan of POTUS, I reckon he's loathe to see the loss of 14k+ jobs in an election year. Regrettable as the loss of those jobs is, that's the way it works. This just isn't a viable business any longer.
it's cute that you think POTUS is thinking about lost jobs.
The more I learn about the U.S. Airline industry and the passengers who revere it, the more I realise just how sick the whole business is.
"It worked out well for me. I ran an airline for a couple of years and made a couple of bucks [Trump Shuttle lost ~ $128MM]. The airline business is a tough business, but I did great with it."
~ $325MM loss in today's dollar...
If this happens, then Spirit becomes the “Air Koryo” of USA
so I can finally ha e a koryo burger?
Spirit won't survive regardless of the amount given.
Size of company does matter but I would encourage everyone to look at the list of airlines that received bailout money in 2020. Spirit's portion was 750 mil while the big 3 got about 4 billion each. And that doesn't count the re-negotiated contracts with their respective credit card companies.
Oh yeah, and Spirit has the nicest FA's.
And finally, you should have bought...
Spirit won't survive regardless of the amount given.
Size of company does matter but I would encourage everyone to look at the list of airlines that received bailout money in 2020. Spirit's portion was 750 mil while the big 3 got about 4 billion each. And that doesn't count the re-negotiated contracts with their respective credit card companies.
Oh yeah, and Spirit has the nicest FA's.
And finally, you should have bought Spirit's stock as soon as Trump mentioned them by name.
Trump off his meds again on Truth Social last night, but he does mention "Spirit" in his Daily Vomit:
"A RIGGED ELECTION TOOK PLACE LAST NIGHT IN THE GREAT COMMONWEALTH OF VIRGINIA! All day long Republicans were winning, the Spirit was unbelievable, until the very end when, of course, there was a massive “Mail In Ballot Drop!”
Bahaha… impeach and remove that mad-man loser and his entire corrupt cabinet, ASAP.
How is he a loser and how is his cabinet corrupt? Is deporting illegals a loser move? Is having DOGE uncovering the billions in wasted fraud a loser move? You liberals have destroyed the country and he is fixing this mess that you really dumb liberals have created.
The above was obviously written by AI. It was not written by a human. Well, OK, maybe by a maggot
You act as if insanity and stupidity are bad.
What other decision could he have reached with him being theprson who personally filed bankruptcy six times?
A stable genius indeed.
$500M is just the beginning. It's going to take a lot more cash than that to keep them running. They've already received more than that in the past year. Trying to put out a fire with gasoline.
The northern neighbors gave Air Canada 6 billion dollars during Covid and were praised. Trump does far less and is attacked by partisan commentators.
Completely different circumstances. Air Canada is the largest, flagship carrier of the country and COVID was not their fault and impacted every airline worldwide. Spirit is nowhere near a flagship carrier and not even in the top 5 and their financial situation is 100% their fault.
Explain how it's Spirit's fault when they had the highest margins in the industry pre 2020....
Spirit couldn't cope with the changing airline business landscape. It's their fault.
False equivalence, and a cheap shot at our good, decent neighbors who have been so badly mistreated by our pedophile, convicted criminal president.
It's interesting that you're all discussing about an ostensibly unviable carrier whose main competitors have lower RASM than CASM- but somehow are perceived to be perfectly viable.
There won't be any free market while governments and central banks are printing money at will, and there certainly isn't anything free market about merchant services providers enjoying unreal profit margins on the back of forming a cartel, charging absurd amounts for their services, and cross-subsidising another...
It's interesting that you're all discussing about an ostensibly unviable carrier whose main competitors have lower RASM than CASM- but somehow are perceived to be perfectly viable.
There won't be any free market while governments and central banks are printing money at will, and there certainly isn't anything free market about merchant services providers enjoying unreal profit margins on the back of forming a cartel, charging absurd amounts for their services, and cross-subsidising another industry.
I don't know much about Spirit's business model, but any claims that it's failing to compete on a level playing field are naive if they aren't disingenuous.
RASM/CASM? Are you Tim Dunn in-disguise? Might as well get into ‘load factor’ while we’re at it… bud, cost (and shortages) of jet fuel (worldwide) is gonna wreck more than just NK in the coming months. But, you do you, please pretend everything is ‘normal’ here.
Read my comment again. I'm not pretending anything is 'normal'- quite the contrary.
…. an outsider looking into this situation might use the popular phrase “I’m gobsmacked” by this situation and the posts herein …. I, of course couldn’t possibly comment!
Whatever is this world coming to?
Terrible idea. Of course. What else can yuu expect from the world’s newest Christian nationalist dictatorship.
Christian nationals are good.
No, they're terrible. Nobody wants to live in a place like that, except the Christian Nationalists at the top of the hierrachy. Think pre-war Iran, except the Ayatollahs talk about Jesus rather than Allah.
Anyone who puts their faith in the supernatural has to be suspected of irrational beliefs …. :-)
Woah, anti-DEI bigot, AndyS is back! It’s been a while… you, along with @Walter Barry, @NotScott, @David R. Miller, and a few others on the various blogs, are truly are some of the worst.
Tell me that Christian nationalists are good when they want to kill me based on which gender I choose to have "knowledge" with and for no other reason than that (well, being Catholic might be a rationale as well). What harm am I doing to them, other than confirming that they're too ugly to be gay?
Still better than spending billions of dollars on benefits for worthless illegals in just four years 2020 - 2024...hmmmmm now I wonder who did that?
Lay off the Fox News John.
@John: please cite your sources - ones that have used means-tested, methodologically sound research - that contend "worthless illegals" (your words, not mine, and likely not words you'll find in any sound economic and social science research) have cost US taxpayers anything close to $500 billion.
This is what we get when we elect an idiot.
*circus theme* Elect a clown…
Insanity is the right word. Spirit got a raw deal with the blocked merger and this stupid world-destabilizing war that only Israel and some weapons manufacturers wanted, but gifting Spirit a government backstop while other struggling airlines with better reputations and products are left to twist in the wind from the exact same Trump--induced economic conditions is extremely unfair and unwise. The Biden administrations ill-advised antitrust zealotry cost JetBlue over 500 million with the failed...
Insanity is the right word. Spirit got a raw deal with the blocked merger and this stupid world-destabilizing war that only Israel and some weapons manufacturers wanted, but gifting Spirit a government backstop while other struggling airlines with better reputations and products are left to twist in the wind from the exact same Trump--induced economic conditions is extremely unfair and unwise. The Biden administrations ill-advised antitrust zealotry cost JetBlue over 500 million with the failed Spirit acquisition alone. That money flowed straight to Spirit and Spirit shareholders blowing a further hole in JetBlue's balance sheet. Just this past week JetBlue was forced to refinance a 0.5% five hundred million loan to an unfavorable 6.5% rate using 22 aircraft as collateral. Where are the loans on favorable terms for other small airlines hurt by Trump's Iran misadventure? JetBlue has bet big on Spirit liquidating soon by adding flight capacity in FLL. If Spirit is purchased by the US government JetBlue will yet again be unfairly punished. Much of the same dynamic is in play over at Frontier too. EVERYONE should get an Iran war fuel spike bailout or NO ONE should. Spirit's brand is toxic and the flying experience is one gotcha charge after another. If their product and reputation precludes them from selling tickets at or slightly above their operating cost they need to go away and stop bleeding more financially responsible consumer-friendly airlines. Keeping a hated, twice bankrupt, money-losing ULCC in business indefinitely isn't preserving competition, it's a slow-motion government death sentence for remaining LCC and ULCC airlines. Thirty-five dollar tickets to Las Vegas for broke Johnny is not a Constitutional right and is not a national economic imperative like healthcare or microchips. Government subsidies for Spirit at this point is just bleeding the remaining little guys from below while they get crushed from above by the likes of UA & DL. Moral hazard out the wazoo and unfair all the way around. I really hope this deal does not materialize.
That’s a lot. Yeah, moral hazard, but… jobs, consumers, and more importantly to the administration is probably the deep pockets who are the actual creditors here. (Well, at least you recognize that healthcare is important, sorta. Progress… psh.)
This is a desperate political play by Trump who can’t have 14,000 jobs vanish in an election year. That’s all this is about.
The USA has already lost tens of thousands of jobs this year. While your point is generally valid, what’s 14,000 more job losses under the fat orange Nazi?
He doesn’t give a shit about the people of the USA. He just cares about enriching himself. Nobody is fooled.
Since when do we blame presidents for private companies laying off staff? AI and over hiring during covid were bound to catch up at some point. Silly Willy.
We always blame presidents. Trump, himself, said to blame him on the economy.
"Since when do we blame presidents for private companies laying off staff?"
Since that "president" PROMISED the opposite, and his thick camp followers believed it. The fat orange Nazi baboon PROMISED more jobs, reductions in costs, no more wars, lower inflation, and the list goes on and on.
Instead the country is shedding jobs, engaging in vanity wars to distract from his other millions of scandals, and is experiencing inflation heretofore unknown in the...
"Since when do we blame presidents for private companies laying off staff?"
Since that "president" PROMISED the opposite, and his thick camp followers believed it. The fat orange Nazi baboon PROMISED more jobs, reductions in costs, no more wars, lower inflation, and the list goes on and on.
Instead the country is shedding jobs, engaging in vanity wars to distract from his other millions of scandals, and is experiencing inflation heretofore unknown in the USA. Dumb moron Alonzo. Pull your pea brain out of your lard ass.
If you believed anything that he said, you really need to be walking around with a helmet. No president is stopping private companies from laying people off lmao.
I realize my prior comment was a bit long, so let me summarize it here. It is a bad idea for the government to be owning airlines in this manner. But many (from all political parties and all walks of life) think it is a worse idea to cede the US airline industry to Delta and Untied under current conditions, which would abandon the idea of cheap domestic airline tickets (in nominal terms) forever.
@ Anthony -- It's not just Delta and United. There's American, Southwest, Alaska, and several other players.
Bigger picture, though, what are you proposing with Spirit? The airline hasn't turned a profit in seven years, and is still running operating losses. The airline is burning through cash. So should the government fund Spirit on an ongoing basis to no end, or...?
If you can't afford a plane ticket, there's Amtrak and Greyhound. Leave the planes for those of us that make a good income.
Umm, there's stil Allegiant and a handful of other options. Spirit isn't unique with its business model.
You have to look at the bigger picture. First off - let's disregard the Trump angle here or even the specifics of what is being done. I'm no fan of Trump and the cronyism at all, but I think you would see something similar out of Biden, Obama, Bush - hell, bring back Reagan or JFK, Abraham Lincoln or Andrew Jackson at this point. You'd see a similar result.
The US is a huge country...
You have to look at the bigger picture. First off - let's disregard the Trump angle here or even the specifics of what is being done. I'm no fan of Trump and the cronyism at all, but I think you would see something similar out of Biden, Obama, Bush - hell, bring back Reagan or JFK, Abraham Lincoln or Andrew Jackson at this point. You'd see a similar result.
The US is a huge country geographically, and Americans have experienced and enjoyed relatively inexpensive air travel for many years. Delta, United and increasingly Southwest have been out there publicly saying they are less and less interested in selling air tickets that the general public sees as affordable (think a couple hundred bucks) to travel by air across the country (I leave American out if this as I have no idea what their strategy is). Given the size of the country and our small rail system, the only alternative to cross country travel is spending days driving. So the government (regardless of the administration in power) is going to have a strong interest in ensuring the average flyer can purchase a ticket for a few hundred bucks and travel the country without holding an airline credit card, being a corporate traveler, buying a premium seat, whatever. You saw this with Biden when the administration and even various judges (nominated by people from both parties) prioritized making sure that airlines like Spirit remained as independent entities.
Biden/Harris lost reelection in large part because people thought stuff was too expensive, and Trump's approval ratings are terrible in large part because people still think stuff is too expensive. In this environment, the government isn't going to let Spirit fail so Delta and United can charge another $200-$300 on a 3 hour domestic flight. You can talk about pilot and flight attendant wages, fuel prices, fortress hubs and pricing power, etc all you want, the consumer wants lower ticket prices, and a lot of local businesses benefit from lower ticket prices.
Even wiith all of this talk of consolidation and such, there are always going to be airline carriers selling low price tickets to the average consumer. If these particular airlines end up essentially being public transportation, so be t, the government has a huge interest in making sure that consumers can simply buy a ticket and fly. I think Spirit and Frontier should have been allowed to merge, but that was blocked by hedge funds, not the government. In the absence of a Spirit and Frontier merger, the capacity that Spirit and Frontier have is going to have to be preserved in some fashion without being absorbed by Delta and United. You can even look at JetBlue in a similar fashion. Even as a Delta flyer, I want to make sure Spirit/Frontier are still there so they can't charge $1,000 for me to fly from NYC to ATL. They already charge $500 to $600.
When looking at this stuff, you are going to have to work backward from affordable ticket prices. What entity is going to be around that is going to sell domestic flights for $150, $200, $250? Whatever that entity is, it is going to end up being protected and preseved by the government, regardless of the president or party in charge.
Well , guess what? Operating an airline in the United States in expensive. Very expensive. Do you know how much pilots and mechanics make alone ? Any idea how much it is to operate and rent facilities at these US airports ? A couple of hundred bucks . Everything has gone up , and that includes everything airlines need to operate .
Not sure if you’ve ever heard the phrase “vote with your wallet” but that definitely applies here. If you like Spirit so much you should buy a ticket from them once in a while instead of your beloved Delta. If you don’t want to spend your money with Spirit so they can stay in business why should the government confiscate my wages to the same ends? The US government is not supposed to be designating...
Not sure if you’ve ever heard the phrase “vote with your wallet” but that definitely applies here. If you like Spirit so much you should buy a ticket from them once in a while instead of your beloved Delta. If you don’t want to spend your money with Spirit so they can stay in business why should the government confiscate my wages to the same ends? The US government is not supposed to be designating certain airlines as money-losing ghetto airlines worthy of arbitrary price fixing and government subsidies. If affordable airfare is a public good that requires price fixing and subsidies then it’s time to smash the monopolies and bring back CAB. Regulate everyone, price fix all fares and subsidize any routes the government deems so important it must be operated at a loss. If you don’t have the stomach for that or worry what it would do to your preferred airline then you have no business calling for that to happen to other airlines.
Agree. If I wanted to support Spirit, I’d buy a ticket. I don’t pay taxes to do that. Flew them once in about 2015. Thanks but no thanks.
There is precedent for government ownership of transportation companies a a means to bail them out Check out Conrail.
...or Amtrak.
Or Intel...
Why would United being try acquire Spirit? They have good fleet comparability and while the product would be very different the assets are all solid. The price would undeniably be much lower than NYC.
United would get asssets and they could choose either Fort Laurderdale or Orlando to do a Florida hub.
Then they could grow and make a focus hub in Detorit, Vegas or somewhere else and Spirit already had a focus city at Newark!
We don’t want to go back to super expensive one-way fare, Saturday-night stay requiring round trip discount, 7-day minimum stay, hefty change fee, award redeposit fee, etc. Any ULCC isn’t sustainable for now but if we lose spirit, we’ll have those things back. Just saying
The U.S. government spends over $300 million annually on the Essential Air Service (EAS) program to subsidize flights to approximately 150–180 underserved rural communities. Beyond direct flight subsidies, the FAA provides billions in grants for rural and smaller airport infrastructure, including $500 million annually for nonprimary airports via the Bipartisan Infrastructure Law.
Since we agree that air service, unlike healthcare, is a right not a privilege, what's wrong with having a government-owned airline? As...
The U.S. government spends over $300 million annually on the Essential Air Service (EAS) program to subsidize flights to approximately 150–180 underserved rural communities. Beyond direct flight subsidies, the FAA provides billions in grants for rural and smaller airport infrastructure, including $500 million annually for nonprimary airports via the Bipartisan Infrastructure Law.
Since we agree that air service, unlike healthcare, is a right not a privilege, what's wrong with having a government-owned airline? As long as its routes and fares are regulated. And, the planes are available for deportation charters.
While the US federal government having a stake in a domestic airline may not be a problem per se, can we be sure the government will be unbiased in dealings with other airlines which could have a negative affect on Spirit? Conversely, would Spirit be favorably considered for any governmental action that would favor them over their competitors?
I'm not as concerned about giving the $500m to Spirit as I am with the government's resultant ownership stake in Spirit.
I assume Trump will get naming rights as part of the deal.
JetBlue got one during COVID for $1.9 billion. Great job on them if they’re in need for another
@ Truth -- *All* major US carriers got that during the early stages of coronavirus. That's different than the government taking a stake in a single airline.
They’re in Ch. 11 for a second time in as many years and were burning through money even before the fuel shocks from the war. There is no near term path for them to be a viable business. This loan barely covers what they owe their bankruptcy creditors, much less their projected -20% margin.
So saving jobs and helping an airline is somehow a bad thing?
This liberal blogger is obviously wanting America to fail.
Sad
This loan barely covers what they owe their creditors in bankruptcy, much less their continued losses. This does nothing to make them a viable business and ensure those jobs long terms, it’s just throwing more coal onto a fire.
SeaTac-I bet you liberals had no problem with the 11 billion dollar bailout for Chrysler that Obama did. Democrats are a bunch of hypocrites.
The Chrysler bailout started with $4 billion from the Bush Administration.
@ Mel -- This wouldn't be "saving jobs," it's just pushing the issues down the road by a few months...
Are we saving all jobs now? And all airlines?
Since we know nothing will be done to increase government revenue to fund this, then what currently available government programs are we going to cancel to pay for this?
No, Mel, I want you to fail, like I want every MAGAt to fail on every level: economically, socially, and sexually. Fortunately, the size of your unit gives you a head-start on that last one.
Ben, while this doesn't apply to you, some of us use Spirt quite often on certain routes where the competition airfare is over 1,000 % higher. In that case, we want spirit to stick around as long as possible.
to be fair, your low fares are subsidized by people that have lost a lot of money believing Spirit's failed turnaround promises
@ Jackson -- 100% we want Spirit to stick around, in the sense that ultra low cost carriers add a lot of value competitively. The issue is if the airline can't make money, there's only so much you can do to artificially keep the airline in business. The business model doesn't work.
cmon ben, you're either too lazy to google the precedent that was already set with airline bailouts like this, or you hate trump so much that you're just taking cheap shots.
Exactly!
@9C
...I'll bite. What precedent? Are you insinuating that the Covid bailouts, something that impacted all airlines during a global pandemic, are similar in nature to rescuing a carrier like Spirit that hasn't turned any kind of profit in years? Not to mention that they emerged from their first Chapter 11 bankruptcy under complete incompetency where they lost even more insane amounts of money under false pretenses to investors and a bankruptcy judge.
@9C
I'll bite. What precedent? Are you insinuating that the Covid bailouts, something that impacted all airlines during a global pandemic, are similar in nature to rescuing a carrier like Spirit that hasn't turned any kind of profit in years? Not to mention that they emerged from their first Chapter 11 bankruptcy under complete incompetency where they lost even more insane amounts of money under false pretenses to investors and a bankruptcy judge.
Scott Kirby was right about Spirit -- it wasn't much of a business plan to plan on consumers being dumb enough to buy your tickets then get penalized by mandatory add-ons over and over again. Eventually the smoke and mirrors game of "cheap fare but you'll end up paying 4x that by the time you land"
@ 9C -- Which precedent?
What precedent? People are waiting. When has the US government (at any level) owned an airline?
Of all the crappy things Trump can do/has done, at least this one has an obvious (crappy) precident. But I truly am in awe that 20+ years after the last bailout, which I thought we all pretty much had concluded as a country was a bunch of BS, they can still get away with this.
Oh we liberals are the socialists? PLLLEEEEAASSSEEEE.....
Chump change compared to the war and corruption of this administration.
Expect United, WN, Delta to slash fares in every market they compete with Spirit so they can burn through that $500 million.
Iran, Russia and China are laughing at us.
…. and the rest of the world NTT, don’t forget those who matter …. :-)
Without Spirit, my $30 airfare from TPA-FLL becomes $300 on Southwest. I’m all for keeping them around, if it keeps our airfares low and competitive.
If you can’t pay the $300 then you have made bad choices in life. It’s that simple. My grandchildren will be subsidizing the Pentagon for the next 20 years. Enough is enough.
Your $30 TPA-MIA fare is one of the reasons why Spirit is in the shape it is. The fare is not sustainable. Flooding them with tax payer money, or anyone else’s money, will only further delay the inevitable. Any way you slice and dice it, the Spirit business model is not sustainable. And Spirit is either unwilling or unable to come up with something better.
Sorry, I meant TPA-FLL.
@ Alex -- I don't think that's quite accurate. If airfare between TPA and FLL becomes $300 and if the demand is there, other airlines will enter the market, since there's obvious money to be made there.
Donald Trump is going to own a piece of this airline now. You don't get the $30 airfare anymore. You might get gold-colored seatbelt buckles, though.
Alex -
It is not the US taxpayers job to subsided your airline tickets.
What the hell is wrong with you?
I can’t disagree with Lucky’s take on the topic. But for perspective, saving this company and its jobs etc, sounds like it will cost about the same as 12 hours of the war itself. If subsidizing this failed carrier is lightning money on fire, the war has been a money inferno.
That's a fair way to look at it
Maybe they wooed him with an offer to rename the airline Spirit of Trump.
Alow the self promoting deal maker to find private funding.
If Spirit had a viable business model that was upended by the fuel price spike that would be one thing.
But they really appear to have a non viable business model.
This is a bad idea for the government, consumers, taxpayers and the I.
industry.