Spirit Airlines Ch.11
#331
But exact timing aside, it's pretty clear that legacy basic economy has been hard on the ULCC's (and maybe SWA too?). Not the only problem, but a problem.
Also there was a big industry shake-up with business travel, which got replaced with a lot of domestic leisure, and hybrid "Bleisure" travel. That significantly altered who was travelling and when. Although traditional business travel is now coming back.
#332
Ok but how?, lol. I mean how do you make a profit with cheap seats if your Labor is already costing you less than everyone else? If your Gates are already costing you less etc. I remember years ago on this very website a bunch of Legacy Guys saying how eventually the ULCC model will fail because you can't pay peanuts for labor forever and eventually Legacy airlines will figure how to offer basic economy etc and we all laughed and mentioned "song, Ted, CAL light" etc. Well......here we are. I think people have figured out how to travel with a backpack and don't want, can't qualify or don't use our credit cards. How else are we as an airline going to generate revenue?
#333
We're not. This place is going to die a slow death. It probably won't be an overnight shutdown, but more like ATA. They'll file Chapter 11 with a new business plan that will still fail because they still won't be able to compete with the legacies as a premium product.
#334
Gets Weekends Off
Joined APC: Aug 2020
Posts: 2,319
I think it’s too late for Spirit to compete with the Legacy’s. They’re going to have to be even better than a legacy as far as product goes if they go that route. They’re already trying the bundle prices but people still know it’s Spirit and maybe they’re still thinking about the last time they were delayed or canceled on them. But I talk to young people in my family and they’re always looking at Frontier or Spirit first before the legacy’s to try to get a cheap flight. They just need to figure out again how to make a profit selling cheap seats.
#335
Gets Weekends Off
Joined APC: Aug 2020
Posts: 2,319
Aquired by who? Other LCC operators are struggling as well and facing the same problems and therefore not in a position to acquire another. Legacies aren't remotely interested in dealing with a merger, and even if they did, those assets would be used to generate revenue for full priced operation. In any situation a LCC operator is either eliminated or slashed in size.
#336
Almost there
Joined APC: Apr 2021
Posts: 1,283
Cheap is a relative thing. You can't charge $50 for a product that cost $100 to produce and stay in business. I'd agree about it being too late to compete with the legacies. The problem is that in the post covid world, the legacies have decided that ULCC's are the competition and they are aggressively going after every potential dollar of revenue. The big 3 management teams smell blood in the water. They know that the ULCC's are at the crossroads where they have to either transform their product into something more resembling the legacies, or shrink to fit a small niche in the consumer base. If ULCC's try to go head to head with the legacies, the legacies will match their prices, provide a much bigger network, and crush them. I think that there is a demand for cost above all else travel, but it is a much smaller segment of the market. In order to survive, I suspect that Spirit will have to shrink to the size of Allegiant or Sun Country and focus on the price focused consumer. The same thing goes for Frontier. The airline industry is going through a transition just like we did post 9/11 and we're all just along for the ride.
#337
There is also an idea of merging the ULCCs so we stop fighting with each other so much. Larger fleet size and more frequency could help to recover the problems of cancellations which are generally the main problem at Frontier. I agree the ULCC in its current form is dying quickly but a ULCC with better service is still in high demand. Get rid of half of the cancellations at my shop and we suddenly become quite profitable. The cost it takes to get there? Probably a couple CEOs. IMO a merger is still coming. With who is all a guess. The merging and buying within the Dollar General/ Dollar tree/ 99 Cent stores kind of mirrors what’s happening in our low cost segment of the industry.
Last edited by Chimpy; 08-11-2024 at 09:55 AM.
#338
Gets Weekends Off
Joined APC: Aug 2020
Posts: 2,319
There is also an idea of merging the ULCCs so we stop fighting with each other so much. Larger fleet size and more frequency could help to recover the problems of cancellations which are generally the main problem at Frontier. I agree the ULCC in its current form is dying quickly but a ULCC with better service is still in high demand. Get rid of half of the cancellations at my shop and we suddenly become quite profitable. The cost it takes to get there? Probably a couple CEOs. IMO a merger is still coming. With who is all a guess. The merging and buying within the Dollar General/ Dollar tree/ 99 Cent stores kind of mirrors what’s happening in our low cost segment of the industry.
#339
Gets Weekends Off
Joined APC: Jul 2022
Position: 787 FO
Posts: 634
The other huge change was getting rid of change fees. United was the first network carrier and the other two quickly matched it. That took away Southwest's biggest advantage with small business road warriors.
You can only add more frequency profitably with a hub and spoke network.
Last edited by jerryleber; 08-11-2024 at 09:53 AM.
#340
Almost there
Joined APC: Apr 2021
Posts: 1,283
New leadership is needed because Both current Nk & F9 have the wrong mindest. They are accountants, not operations people. (Bobby two Scoops was an operations guy) I forget what analyst it was but on the reason eanrings call they asked if they were looking to add people to mgmt that didnt have a low cost mindset, lol (something along those lines). The thought of spending money to make money here on improving the operation seems like it's just not part of our airlines DNA. I think Gorden Bethune talked about lowering the cost of the pizza to the point of it no longer being edible or something like that.
Ive commuted on Frontier several times to DEN and my only complaint (granted I was jumpseating and not a paying passenger) was the lack of frequency. 2-3 flights per week isn't going to cut it. I still think that even with a merger of ULCC's, they will have to raise their prices enough to be profitable. The total number seats in that market will probably shrink as well to meet demand. If the frequency and customer service complaints are addressed, I could see it working provided that they stay in their market and don't try to go head to head with the legacies. All that needs to happen is to find a competent management team (seems to be absent among ULCC's) and a set of investors willing to take a chance on putting it together. It sucks for the employees in that situation though. Management will point out that your competition is the ULCC market and the odds of being compensated on par with the legacies will be slim to none.
Thread
Thread Starter
Forum
Replies
Last Post