And here's the conclusion of that anti-trust ruling blocking the JetBlue acquisition, a dead company whose assets may get bought up by JetBlue anyway. People seemed pretty happy about that ruling...
And here's the conclusion of that anti-trust ruling blocking the JetBlue acquisition, a dead company whose assets may get bought up by JetBlue anyway. People seemed pretty happy about that ruling at the time, and I still don't really get it -- but I am biased as I did buy some Spirit stock expecting the deal to go through, so that's my cards on the table.
I suspect people were just excited to see anti-trust enforced at all. In this particularly instance, maybe it was the wrong move, I don't know. But I get why people might have been basically...
I suspect people were just excited to see anti-trust enforced at all. In this particularly instance, maybe it was the wrong move, I don't know. But I get why people might have been basically relieved to see any enforcement at all, given how much havoc has been imposed on the economy (for ordinary folks, not the "financial" economy) by consolidation.
I think Spirit Halloween would get first crack at it, and now that they have air transportation, a lot of abandoned buildings are going to turn real quick, it’s going to be a mess out there. /j...
a dead company whose assets may get bought up by JetBlue anyway.
I think Spirit Halloween would get first crack at it, and now that they have air transportation, a lot of abandoned buildings are going to turn real quick, it’s going to be a mess out there. /j
And until this shutdown, people enjoyed more competition and downward price pressure. Antitrust is a good thing. The fact Spirit was mismanaged into insolvency shouldn't be the reason to decide to...
And until this shutdown, people enjoyed more competition and downward price pressure.
Antitrust is a good thing. The fact Spirit was mismanaged into insolvency shouldn't be the reason to decide to fuck it and approve all M&A anyway. In another world they turned it around and kept competing with Jet Blue.
It'd be one thing if like Delta was trying to buy Spirit. Delta is one of the largest airlines in the world, by multiple metrics. So, sure, that'd be a problem. But this was JetBlue, who's also...
It'd be one thing if like Delta was trying to buy Spirit. Delta is one of the largest airlines in the world, by multiple metrics. So, sure, that'd be a problem.
But this was JetBlue, who's also having financial problems. These are two smaller, weaker airlines, compared to the US legacies. If any merger makes sense, it's this one.
My preferred approach is breaking up larger parties rather than creating another behemoth, but perhaps you might be right in this case. The issue is that we don't know if it would've been...
My preferred approach is breaking up larger parties rather than creating another behemoth, but perhaps you might be right in this case. The issue is that we don't know if it would've been effective or not.
At any rate, the goal of antitrust isn't to keep companies alive, it's to create a healthy consumer market and keep competition thriving. In this case it may have saved both and also ruined the market because there are fewer competitors. Admittedly, that's speculation at best.. but not without precedent.
@GoatOnPony posted a similar thought process. Companies going under is a sign of (or at least one of the signs of) the market working.
Edit to add: this merger was blocked by the DOJ rather than the FTC so it potentially has other market workings that I'm not entirely clear on. I don't know if aviation follows the same anti trust competition logic. So consider this a caveat I suppose.
But we know that this future resulted in a certainty of less competition. The counterfactual where Spirit and JetBlue merged would have, at worst, matched this reality. At best, it would have been...
But we know that this future resulted in a certainty of less competition. The counterfactual where Spirit and JetBlue merged would have, at worst, matched this reality. At best, it would have been better for the consumer. That it's only been 2 years means that Spirit was close enough to the brink in 2024, people working to block the merger could have foreseen this reality.
Companies going under is a sign of (or at least one of the signs of) the market working.
In general, I agree with this sentiment, but it seems wrong to use Spirit going under as an example of the market working when it's a direct consequence of government intervention in the market.
But not as good as two companies competing, is my point mainly. There is no such thing as a free market with competition. Clearly, because that's the default mode and too big to fail companies are...
At best, it would have been better for the consumer.
But not as good as two companies competing, is my point mainly.
In general, I agree with this sentiment, but it seems wrong to use Spirit going under as an example of the market working when it's a direct consequence of government intervention in the market.
There is no such thing as a free market with competition. Clearly, because that's the default mode and too big to fail companies are buying up the competition right now. See your Googles and Amazons and Metas stifling any and all competition within their ballpark. A healthy market isn't a one and done. Regulating the market through government intervention is a method to keep it healthy and is a necessary step. Antitrust is one of these regulatory sticks and will cause some companies to fail. Spirit collapsing is not antitrust or governmental failure, only being able to stay alive by being bought is mismanagement.
It’s not necessarily as simple as that. There can be less competition with more companies. For example, let’s say there’s a market where company A has 95% of the marketshare, with the other 5%...
But not as good as two companies competing, is my point mainly.
It’s not necessarily as simple as that. There can be less competition with more companies.
For example, let’s say there’s a market where company A has 95% of the marketshare, with the other 5% distributed between 10 different small companies. Because of economics of scale, none of the small companies can seriously compete with A. It’s actually more competitive if some or all of these small companies merge to become B.
Sure, it never is that simple but we're a bit limited by online posts to work out all the nuances but yeah you're right. You see this with RAM. Micron yoinks their business from the consumer...
Sure, it never is that simple but we're a bit limited by online posts to work out all the nuances but yeah you're right. You see this with RAM. Micron yoinks their business from the consumer market and a third of the market collapses. Ironically this example provides a gap for new competitors on that market but that's not what you or I mean.
RAM had the issue only three companies had a serious share of the pie, but I'd argue this is because it's specialty equipment. I don't think this applies to most markets and less so when not everyone is vertically integrated from A to Z.
Good examples in the other direction are Chinese EVs or even their food delivery services. Consumer glut, low prices, plenty of options. Some delivery services or car manufacturers will fail but the consumer profits.
The reality is that the low cost airline market in the US has been declining for years now, being beaten back by the larger legacy carriers. Letting JetBlue merge with Spirit reduces the numbers...
The reality is that the low cost airline market in the US has been declining for years now, being beaten back by the larger legacy carriers. Letting JetBlue merge with Spirit reduces the numbers of LCC, but the actual big dogs in the US flight industry are AA, Delta, United, etc.
If Spirit dies, all carriers increase their relative marketshare proportionally. If JetBlue eats Spirit to become the mega LCC, they gain while the legacy carriers stay in place.
For consumers, it’s more important that the legacy carriers are kept in check by stiff competition than anything else right now.
I can accept this explanation. I don't have the appropriate knowledge about US airlines to speak about it one way or the other. The response I made at the start was prompted at the somewhat...
For consumers, it’s more important that the legacy carriers are kept in check by stiff competition than anything else right now.
I can accept this explanation. I don't have the appropriate knowledge about US airlines to speak about it one way or the other. The response I made at the start was prompted at the somewhat confounding general antitrust sentiment.
Just a brief comment on the market, competition, and the number of airlines - it's tough to use "econ 101" type stuff with airlines, I think - the financial and regulatory hurtles associated with...
Just a brief comment on the market, competition, and the number of airlines - it's tough to use "econ 101" type stuff with airlines, I think - the financial and regulatory hurtles associated with starting an airline are just massive - it's not as simple as a few friends noticing the current airline offerings/prices are lacking and seeing an opportunity to start up a competing business. These aren't coffee shops - buying a single airplane for this type of airline will run you something like $50-$100 million dollars, not to mention the money/knowledge needed to actually run an airline that's compliant with FAA regulations after you've bought your airplane.
A working antitrust ecosystem will have more, smaller companies. That will be a more volatile ecosystem with new entrants coming and various ones failing as the margins for companies will be...
A working antitrust ecosystem will have more, smaller companies. That will be a more volatile ecosystem with new entrants coming and various ones failing as the margins for companies will be thinner and their ability to absorb significant shocks reduced. If nothing else, more companies existing in a market just means a higher number of companies going under if every company has some chance of failure. In theory, this volatility is good (at least for markets which aren't necessary goods) as new ideas enter and weaker companies fall out. Whether or not the airlines market is working in that theoretical mode I'm not knowledgeable enough to say, so this is more just a comment that more companies failing kinda should be expected under an antitrust regime.
Even if you never took spirit, you would still benefit from it existing. People whine about spirit all the time, but in the end you never have to take spirit, and all the people who willingly take...
Exemplary
Even if you never took spirit, you would still benefit from it existing. People whine about spirit all the time, but in the end you never have to take spirit, and all the people who willingly take spirit put downward price pressure on the bigger carriers.
A combination of increasing spending on the higher ends of travel, decreasing spending for low cost, jet fuel costs, and the big carriers expanding their low cost options (which is a direct result of spirit’s competition in the 2010s) led to this.
It seems that overall travelers are richer and not particularly tolerant of the low cost travel lifestyle anymore. But it served its market when it existed. And while the economy is doing well currently, it can always dip.
17k jobs or something lost, and another option for flying is lost too. Feels kinda elitist to celebrate that. I never flew spirit but I'm thankful that people were able to get around on a lower...
17k jobs or something lost, and another option for flying is lost too. Feels kinda elitist to celebrate that. I never flew spirit but I'm thankful that people were able to get around on a lower cost airline to see loved ones and all
For a segment of the flying public? It is. I took Spirit a lot in my 20s, because it was basically all I could afford if I wanted to get somewhere quick. I once flew MCI-LAS RT for like $47. Even...
For a segment of the flying public? It is.
I took Spirit a lot in my 20s, because it was basically all I could afford if I wanted to get somewhere quick. I once flew MCI-LAS RT for like $47. Even back then in the early/mid 2010s, no other airline had prices like that.
Was it the most luxurious? No. They had the cardboard-thin seats before everyone else did. It was no frills, but you paid very little for that. Unlike today, where you pay tons of money on Southwest, Delta, whichever, and yet it's still relatively no frills, unless you pay more for higher tier tickets.
As long as you knew the rules, what to expect, you were not going to get extra fees tacked on last minute. It's not the airline's fault if they say a passenger can have one free small personal item like a purse or a small backpack, with specific dimensions listed, blasted all over their site and during the purchase process, yet they pax brings a massive duffle bag or a rollerbag. That's the pax's fault. I have never had an issue with last minute fees because I actually took the time to make sure I was in compliance.
I had other issues with them, which is why I stopped flying Spirit. I also started making more money, so I could afford flying Southwest and other legacy carriers. But in retrospect, the issues I had with Spirit, I ended up having worse with with both Southwest and Delta later!
Saying good riddance to Spirit is like saying good riddance to Greyhound or any of the intercity bus services. It may not appeal to some segments of consumer. And that's fine. But it serves a real purpose for those who can't afford or don't want to afford anything else.
Adding to this, I only flew Spirit a few times but I thought the value for money was surprisingly good. That might sound like a “well, duh” kind of statement for a budget carrier, but I find a lot...
Adding to this, I only flew Spirit a few times but I thought the value for money was surprisingly good. That might sound like a “well, duh” kind of statement for a budget carrier, but I find a lot of really cheap services are actually terrible value because they’ve got that captive audience of people who can’t afford to go up to the next pricing tier - I’d say Greyhound is in that bucket, for example.
Maybe it’s because long distance buses did act as an alternative for the most price conscious customers that Spirit had to stay above some (admittedly fairly low) bar for quality. Compare that to, say, American or BA and you’re back into terrible value again at the other end of the cost spectrum because they’ll still put you through 85% of the bad parts of the budget carrier experience nowadays but they’re an order of magnitude more than 15% more expensive.
Thanks Donald. I think the longer he drags on this pointless war with Iran, the more it's going to economically hurt all of us. At this rate Spirit will be the first of many casualties.
Thanks Donald.
I think the longer he drags on this pointless war with Iran, the more it's going to economically hurt all of us.
At this rate Spirit will be the first of many casualties.
Even the article says it was a bad idea for the government to take the deal. I don't like Trump as much as the next guy, but I think the blame is fully on Spirit in this situation.
But its ability to survive the year was in question even before the Iran war, Syth added.
"If it wasn't for the fuel scenario, they would have been okay through the summer, beyond the summer I would have said it was still precarious."
Even the article says it was a bad idea for the government to take the deal. I don't like Trump as much as the next guy, but I think the blame is fully on Spirit in this situation.
Certainly Trump has his role to play. This Iran war debacle hasn't helped and likely accelerated the timeline. But Spirit has been having issues, even before all of this madness around the Strait...
Certainly Trump has his role to play. This Iran war debacle hasn't helped and likely accelerated the timeline. But Spirit has been having issues, even before all of this madness around the Strait of Hormuz.
JetBlue proposed to buy Spirit during the Biden administration, but it was Biden's DOJ that sued to stop it, and did so successfully. The rationale being that this would reduce competition in the ULCC segment.
Fingers crossed the rest of the other airlines will be left to die when they inevitability come crawling for another bailout. Air travel is just another thing used to justify not building out...
Fingers crossed the rest of the other airlines will be left to die when they inevitability come crawling for another bailout.
Air travel is just another thing used to justify not building out quality rail.
And here's the conclusion of that anti-trust ruling blocking the JetBlue acquisition, a dead company whose assets may get bought up by JetBlue anyway. People seemed pretty happy about that ruling at the time, and I still don't really get it -- but I am biased as I did buy some Spirit stock expecting the deal to go through, so that's my cards on the table.
I suspect people were just excited to see anti-trust enforced at all. In this particularly instance, maybe it was the wrong move, I don't know. But I get why people might have been basically relieved to see any enforcement at all, given how much havoc has been imposed on the economy (for ordinary folks, not the "financial" economy) by consolidation.
I think Spirit Halloween would get first crack at it, and now that they have air transportation, a lot of abandoned buildings are going to turn real quick, it’s going to be a mess out there. /j
Also, consolidation bad, I guess.
And until this shutdown, people enjoyed more competition and downward price pressure.
Antitrust is a good thing. The fact Spirit was mismanaged into insolvency shouldn't be the reason to decide to fuck it and approve all M&A anyway. In another world they turned it around and kept competing with Jet Blue.
It'd be one thing if like Delta was trying to buy Spirit. Delta is one of the largest airlines in the world, by multiple metrics. So, sure, that'd be a problem.
But this was JetBlue, who's also having financial problems. These are two smaller, weaker airlines, compared to the US legacies. If any merger makes sense, it's this one.
My preferred approach is breaking up larger parties rather than creating another behemoth, but perhaps you might be right in this case. The issue is that we don't know if it would've been effective or not.
At any rate, the goal of antitrust isn't to keep companies alive, it's to create a healthy consumer market and keep competition thriving. In this case it may have saved both and also ruined the market because there are fewer competitors. Admittedly, that's speculation at best.. but not without precedent.
@GoatOnPony posted a similar thought process. Companies going under is a sign of (or at least one of the signs of) the market working.
Edit to add: this merger was blocked by the DOJ rather than the FTC so it potentially has other market workings that I'm not entirely clear on. I don't know if aviation follows the same anti trust competition logic. So consider this a caveat I suppose.
But we know that this future resulted in a certainty of less competition. The counterfactual where Spirit and JetBlue merged would have, at worst, matched this reality. At best, it would have been better for the consumer. That it's only been 2 years means that Spirit was close enough to the brink in 2024, people working to block the merger could have foreseen this reality.
In general, I agree with this sentiment, but it seems wrong to use Spirit going under as an example of the market working when it's a direct consequence of government intervention in the market.
But not as good as two companies competing, is my point mainly.
There is no such thing as a free market with competition. Clearly, because that's the default mode and too big to fail companies are buying up the competition right now. See your Googles and Amazons and Metas stifling any and all competition within their ballpark. A healthy market isn't a one and done. Regulating the market through government intervention is a method to keep it healthy and is a necessary step. Antitrust is one of these regulatory sticks and will cause some companies to fail. Spirit collapsing is not antitrust or governmental failure, only being able to stay alive by being bought is mismanagement.
It’s not necessarily as simple as that. There can be less competition with more companies.
For example, let’s say there’s a market where company A has 95% of the marketshare, with the other 5% distributed between 10 different small companies. Because of economics of scale, none of the small companies can seriously compete with A. It’s actually more competitive if some or all of these small companies merge to become B.
Sure, it never is that simple but we're a bit limited by online posts to work out all the nuances but yeah you're right. You see this with RAM. Micron yoinks their business from the consumer market and a third of the market collapses. Ironically this example provides a gap for new competitors on that market but that's not what you or I mean.
RAM had the issue only three companies had a serious share of the pie, but I'd argue this is because it's specialty equipment. I don't think this applies to most markets and less so when not everyone is vertically integrated from A to Z.
Good examples in the other direction are Chinese EVs or even their food delivery services. Consumer glut, low prices, plenty of options. Some delivery services or car manufacturers will fail but the consumer profits.
The reality is that the low cost airline market in the US has been declining for years now, being beaten back by the larger legacy carriers. Letting JetBlue merge with Spirit reduces the numbers of LCC, but the actual big dogs in the US flight industry are AA, Delta, United, etc.
If Spirit dies, all carriers increase their relative marketshare proportionally. If JetBlue eats Spirit to become the mega LCC, they gain while the legacy carriers stay in place.
For consumers, it’s more important that the legacy carriers are kept in check by stiff competition than anything else right now.
I can accept this explanation. I don't have the appropriate knowledge about US airlines to speak about it one way or the other. The response I made at the start was prompted at the somewhat confounding general antitrust sentiment.
Just a brief comment on the market, competition, and the number of airlines - it's tough to use "econ 101" type stuff with airlines, I think - the financial and regulatory hurtles associated with starting an airline are just massive - it's not as simple as a few friends noticing the current airline offerings/prices are lacking and seeing an opportunity to start up a competing business. These aren't coffee shops - buying a single airplane for this type of airline will run you something like $50-$100 million dollars, not to mention the money/knowledge needed to actually run an airline that's compliant with FAA regulations after you've bought your airplane.
A working antitrust ecosystem will have more, smaller companies. That will be a more volatile ecosystem with new entrants coming and various ones failing as the margins for companies will be thinner and their ability to absorb significant shocks reduced. If nothing else, more companies existing in a market just means a higher number of companies going under if every company has some chance of failure. In theory, this volatility is good (at least for markets which aren't necessary goods) as new ideas enter and weaker companies fall out. Whether or not the airlines market is working in that theoretical mode I'm not knowledgeable enough to say, so this is more just a comment that more companies failing kinda should be expected under an antitrust regime.
Oh no. What a loss.
Even if you never took spirit, you would still benefit from it existing. People whine about spirit all the time, but in the end you never have to take spirit, and all the people who willingly take spirit put downward price pressure on the bigger carriers.
A combination of increasing spending on the higher ends of travel, decreasing spending for low cost, jet fuel costs, and the big carriers expanding their low cost options (which is a direct result of spirit’s competition in the 2010s) led to this.
It seems that overall travelers are richer and not particularly tolerant of the low cost travel lifestyle anymore. But it served its market when it existed. And while the economy is doing well currently, it can always dip.
17k jobs or something lost, and another option for flying is lost too. Feels kinda elitist to celebrate that. I never flew spirit but I'm thankful that people were able to get around on a lower cost airline to see loved ones and all
For a segment of the flying public? It is.
I took Spirit a lot in my 20s, because it was basically all I could afford if I wanted to get somewhere quick. I once flew MCI-LAS RT for like $47. Even back then in the early/mid 2010s, no other airline had prices like that.
Was it the most luxurious? No. They had the cardboard-thin seats before everyone else did. It was no frills, but you paid very little for that. Unlike today, where you pay tons of money on Southwest, Delta, whichever, and yet it's still relatively no frills, unless you pay more for higher tier tickets.
As long as you knew the rules, what to expect, you were not going to get extra fees tacked on last minute. It's not the airline's fault if they say a passenger can have one free small personal item like a purse or a small backpack, with specific dimensions listed, blasted all over their site and during the purchase process, yet they pax brings a massive duffle bag or a rollerbag. That's the pax's fault. I have never had an issue with last minute fees because I actually took the time to make sure I was in compliance.
I had other issues with them, which is why I stopped flying Spirit. I also started making more money, so I could afford flying Southwest and other legacy carriers. But in retrospect, the issues I had with Spirit, I ended up having worse with with both Southwest and Delta later!
Saying good riddance to Spirit is like saying good riddance to Greyhound or any of the intercity bus services. It may not appeal to some segments of consumer. And that's fine. But it serves a real purpose for those who can't afford or don't want to afford anything else.
Adding to this, I only flew Spirit a few times but I thought the value for money was surprisingly good. That might sound like a “well, duh” kind of statement for a budget carrier, but I find a lot of really cheap services are actually terrible value because they’ve got that captive audience of people who can’t afford to go up to the next pricing tier - I’d say Greyhound is in that bucket, for example.
Maybe it’s because long distance buses did act as an alternative for the most price conscious customers that Spirit had to stay above some (admittedly fairly low) bar for quality. Compare that to, say, American or BA and you’re back into terrible value again at the other end of the cost spectrum because they’ll still put you through 85% of the bad parts of the budget carrier experience nowadays but they’re an order of magnitude more than 15% more expensive.
Thanks Donald.
I think the longer he drags on this pointless war with Iran, the more it's going to economically hurt all of us.
At this rate Spirit will be the first of many casualties.
Even the article says it was a bad idea for the government to take the deal. I don't like Trump as much as the next guy, but I think the blame is fully on Spirit in this situation.
Certainly Trump has his role to play. This Iran war debacle hasn't helped and likely accelerated the timeline. But Spirit has been having issues, even before all of this madness around the Strait of Hormuz.
JetBlue proposed to buy Spirit during the Biden administration, but it was Biden's DOJ that sued to stop it, and did so successfully. The rationale being that this would reduce competition in the ULCC segment.
Well, seems competition was reduced anyway.
Fingers crossed the rest of the other airlines will be left to die when they inevitability come crawling for another bailout.
Air travel is just another thing used to justify not building out quality rail.