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Newsweek
2 days ago
- Newsweek
How Spirit Airlines' Problems Could Affect Your Flights
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Budget carrier Spirit Airlines has warned that it could soon go out of business unless it successfully implements a number of major changes. Spirit emerged from Chapter 11 bankruptcy in March. However, in a filing this week with the Securities and Exchange Commission, the company said there was "substantial doubt" as to whether it could survive for another 12 months unless it raised more cash. When approached by Newsweek for comment, Spirit declined to provide further information beyond what was included in the filing. However, the company shared an internal email from CEO Dave Davis in which he outlined changes being made at Spirit and promised to "transform and protect this critical business." Why It Matters Spirit Airlines has long been considered a troubled carrier, amid years of mounting losses, rising debt and failed attempts to resurrect the company through a blocked merger with JetBlue. The downfall of Spirit—among the most widely used airlines in the U.S.—could hold major implications for travelers, particularly those who have previously benefited from its low-cost offerings. A contraction in its operations could reduce flight options, boost rivals such as Frontier or Southwest, and even lead to higher prices—as one of the major forces behind fare competition would be removed from the marketplace. A Spirit Airlines Airbus A320-271N takes off from Los Angeles International Airport on January 24. A Spirit Airlines Airbus A320-271N takes off from Los Angeles International Airport on January 24. AaronP/Bauer-Griffin/GC Images What To Know Spirit's current difficulties stem from a combination of weak leisure travel demand and elevated domestic capacity, which the company said on Monday had led to a "challenging pricing environment." The airline reported a net loss of $245.8 million for the second quarter, compared to a loss of $192.9 million during the same quarter last year. Shares of its parent company, Spirit Aviation Holdings, plummeted by about 40 percent on Tuesday following the announcement. The company has already taken mitigating measures to try to shore up its finances amid these mounting challenges. In July, Spirit said it would furlough about 270 pilots later this year, while also demoting another 140 in an effort to conserve cash. Preempting fears this could affect its operations, Spirit told Reuters, "We are taking necessary steps to ensure we operate as efficiently as possible as part of our efforts to return to profitability." How Could This Affect Travelers? Should Spirit fail to emerge from this challenging period, experts believe the effects could extend beyond its own passengers, reshaping flight options and fares across the low-cost travel market. "Spirit may be signaling the beginning of the end of their operations unless they can manage a dramatic turnaround," said Kerry Tan, a professor of economics at Loyola University. "Prospective customers should be wary of the risks when booking flights." Tan, whose research focuses on the U.S. airline industry, told Newsweek that, should Spirit go under, travelers would be able to turn to low-cost alternatives such as Frontier and Allegiant. However, he added that both had been "suffering from below average on-time performance." The presence of a low-cost carrier such as Spirit in the marketplace has also forced other airlines to lower their prices to remain competitive, and Spirit's departure could undo some of these effects. "It would be hurtful for passengers to lose an airline that put downward pressure on airfares," Tan said. Spirit has faced financial difficulties for many years, but Volodymyr Bilotkach, a professor of aviation management at Purdue University, told Newsweek, "This time, I feel that going out of business is a real possibility for the airline." Bilotkach said Spirit would likely attempt to sell off its assets en masse, particularly aircraft, which other carriers would buy to increase their own capacities. On Monday, Spirit said it was planning to take further "liquidity enhancing measures," including the possible sale of aircraft, real estate and excess airport capacity. Economist Clifford Winston told Newsweek that the immediate effects on travel could depend on whether other airlines seek a merger with Spirit—as JetBlue did between 2022 and 2024—or wait until it is liquidated to buy its aircraft at fire-sale prices. He said Spirit's departure would have little effect on highly competitive routes that are already overserved, but "low-density routes" could suffer. "But there are not that many people on those routes," Winston added. "So in terms of the big picture, I don't think you're going to see much [change]." Likewise, Bilotkach anticipated minimal disruption to flight availability on key routes should Spirit shut down, with competitors likely to fill gaps left by the airline. However, given Spirit's broad and varied network, he said some of its less-trafficked routes could be lost. "One set of customers which might be affected are holders of Spirit Airlines' branded credit cards and generally loyal Spirit customers," he added. "They might find any accumulated points worthless, especially if the airline simply goes out of business rather than merging with someone." "Once the possibility of a bankruptcy arises, it effectively becomes a self-fulfilling outcome," said Jonathan Williams, a professor of economics at the University of North Carolina at Chapel Hill. "Passengers don't want to book with a carrier that is canceling flights, removing markets, furloughing pilots, or potentially compromising safety for cost savings (i.e., a short-term time mindset to preserve cash)." "If they do go under, it will not be great for the industry," he added. "They've served an important role in the low-cost carrier space, offering a source of intense price competition for the network carriers that will be hard to replace." Williams told Newsweek that smaller low-cost carriers such as Breeze or Avelo "don't have the assets to step into that role yet." What People Are Saying Spirit CEO Dave Davis wrote in an email to employees shared with Newsweek: "Spirit is a critical part of the U.S. aviation industry. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. We remain hard at work on many initiatives to protect our unique franchise, our valued Team Members, our business partners and our Guests who place their trust in us every day." Ernest Arvai, the president of the aviation consultancy AirInsight Group, told Newsweek: "Spirit just emerged from bankruptcy a few weeks ago, with a plan to become profitable again, but the economic environment—particularly uncertainty over tariffs and inflation, have resulted in consumers rethinking their decisions on vacation spending." He added: "Should Spirit go under, another of the ultra-low-cost carriers would disappear, leaving pricing in the hands of the larger carriers and reducing competition in the market." Ian Savage, a transport safety and economics expert, told Newsweek: "This warning by Spirit Airlines is not unexpected. Spirit's main weakness is that they operated in head-to-head competition on the routes of the major carriers. The major carriers then undermined Spirit's competitive advantage by introducing basic economy fares. "In contrast, other ultra-low-cost airlines such as Allegiant Air, Avelo Airlines and Breeze Airways have chosen routes and airports that do not directly compete with the major carriers. I am skeptical that Spirit can effectively up-brand themselves with premium offerings or change their network sufficiently quickly to avoid eventual liquidation." What Happens Next In its quarterly filing, Spirit said it would "continue to experience challenges and uncertainties in our business operations and expect these trends to continue for at least the remainder of 2025."
Newsweek
2 days ago
- Newsweek
Spirit Airlines CEO Breaks Silence on Company's Struggles
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The CEO of Spirit Airlines has told employees that significant efforts are being made to stabilize the embattled carrier, which this week reported facing critical financial difficulties. In a quarterly filing with the U.S. Securities and Exchange Commission on Monday, Spirit said profitability struggles and weak demand had raised "substantial doubt as to the company's ability to continue as a going concern within 12 months." However, in an internal email obtained by Newsweek, CEO Dave Davis told employees that this wording was "required by our outside auditors to convey that there is risk if we do not make changes. But, we are." Why It Matters Spirit has long been grappling with declining demand and related financial strains, which led to it filing for bankruptcy in November. While the airline emerged from the Chapter 11 process in March, the latest warning has reignited concerns that the U.S. could soon lose one of its major low-cost carriers. As experts told Newsweek, the departure of Spirit could ripple through the entire U.S. airline industry, leading to near-term issues for travelers and higher prices in the future, given that the company's budget offerings have in the past served as a major source of fare competition. A Spirit Airlines Airbus A320 taxis at Harry Reid International Airport behind parked aircraft in Las Vegas on March 15. A Spirit Airlines Airbus A320 taxis at Harry Reid International Airport behind parked aircraft in Las Vegas on March To Know In its quarterly filing, Spirit said "adverse market conditions," including low leisure travel demand and surplus capacity, had resulted in a "challenging pricing environment." The airline reported a net loss of $245.8 million for the quarter, which ended on June 30, significantly widened from the $192.9 million loss over the same period in 2024. In the email to employees, Davis acknowledged that the report had "generated media coverage and, naturally, a lot of questions." Davis, who took the helm at Spirit in April, said that during his tenure, the company's leadership had "developed a plan that leans into Spirit's strengths, while moving away from the elements of the business that no longer work." This, he said, included "strategically growing our network in stronger markets with more opportunities." Davis added that the company had also faced "difficult decisions," such as whether to cancel "unprofitable routes." "By doing so, the team and I are confident that we can build a Spirit that will continue to provide consumers the unmatched value that they have come to expect for many years to come," he added. The company has already taken mitigating measures to try to shore up its finances. In July, Spirit said it would furlough about 270 pilots in November and demote another 140 in October to conserve cash. The airline said at the time, "We are taking necessary steps to ensure we operate as efficiently as possible as part of our efforts to return to profitability." On Monday, Spirit said in its filing that it was considering further "liquidity enhancing measures," including the sale of its aircraft, real estate and excess airport capacity. What People Are Saying Spirit CEO Dave Davis wrote in an email to employees: "Spirit is a critical part of the U.S. aviation industry. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. We remain hard at work on many initiatives to protect our unique franchise, our valued Team Members, our business partners and our Guests who place their trust in us every day. We appreciate your commitment and professionalism during this challenging phase and, with your help, we will transform and protect this critical business." Kerry Tan, an airline industry expert, told Newsweek: "Spirit may be signaling the beginning of the end of their operations unless they can manage a dramatic turnaround. Prospective customers should be wary of the risks when booking flights. Fortunately, there are alternative ultra low-cost carriers like Frontier and Allegiant to consider, although both of these airlines have been suffering from below average on-time performance." Volodymyr Bilotkach, a professor of aviation management at Purdue University, told Newsweek that competitors could pick up the routes left by Spirit should it go under: "We have seen this scenario playing out recently with Jetstar Asia going out of business in Singapore and Wizz Air leaving its Abu Dhabi base. Yet, given the rather diverse collection of routes Spirit currently operates; I do expect that some of the services will be lost." Jonathan Williams, a professor of economics at the University of North Carolina at Chapel Hill, told Newsweek: "[Spirit has] served an important role in the low-cost carrier space, offering a source of intense price competition for the network carriers that will be hard to replace. Smaller carriers like Breeze and Avelo don't have the assets to step into that role yet. So what happens to Spirit's assets (e.g., gates, aircraft, etc.) is very important for the ultimate impact." What Happens Next In its quarterly filing, Spirit said it would "continue to experience challenges and uncertainties in our business operations and expect these trends to continue for at least the remainder of 2025." In the email to employees, Spirit's CEO said he would be sharing more information about the airline's commercial changes "in the coming weeks."
Business Insider
04-08-2025
- Business Insider
Map shows how severe weather blocked an Allegiant flight's path and forced it to turn back
An Allegiant Air flight had to turn around and divert when its route was blocked by heavy storms. Flight 1150 was due to take off from Melbourne, in central Florida, around 4 p.m. on Sunday. Flight-tracking data shows it departed just over an hour late, but that would be the least of the passengers' worries. The 19-year-old Airbus A320 was supposed to land in Pittsburgh after roughly two hours, but a problem became apparent as it flew north. Just before crossing into Georgia, the plane turned west and circled around to make an unplanned landing in Jacksonville. An air traffic control recording published by shows one of the Allegiant pilots referring to the flight as an "emergency aircraft." He also told the controller at Jacksonville that there were 179 people on board the plane. It touched down after about 40 minutes in the air. Allegiant Air did not immediately respond to a request for comment sent by Business Insider outside US working hours. #G41150 from Melbourne to Pittsburgh squawking 7700 and diverting to Jacksonville. — Flightradar24 (@flightradar24) August 3, 2025 But a map from Flightradar24 offers a big clue as to why the plane may have diverted. The weather radar showed severe storms across the south of Georgia and extending out into the Atlantic. Overlaid with the path of Flight 1150, it shows the pilots narrowly avoiding the bad weather. Also on Sunday, the National Weather Service warned of slow-moving storms and the potential for heavy flooding in Georgia. The Weather Channel reported that at least three to five inches of rain are expected to fall in the southern parts of the state through Thursday. Modern planes are designed with features to protect against flying through a thunderstorm, such as a copper mesh to conduct lightning charges away from key electronics. However, bad weather can also cause severe turbulence. This can be unpredictable, with passengers not always given enough warning to put their seatbelts on. Last Wednesday, 25 people were taken to the hospital after a Delta Air Lines flight encountered severe turbulence while flying through a thunderstorm. Flightradar24 showed several other aircraft avoiding storms in the area, while the Delta plane appeared to fly through a rough weather patch before diverting to Minneapolis-Saint Paul International Airport.
