Spirit Airlines filed for Chapter 11 bankruptcy protection on Monday after the budget airline’s merger efforts collapsed and its losses spiraled out of control.
Driving the news: Spirit plunged into bankruptcy after a $3.8 billion deal to sell itself to JetBlue was blocked by a federal judge and after previous efforts to combine with rival Frontier Airlines fell apart. Spirit has been bleeding cash for years. The company lost money in 17 of its last 18 quarters, including about $336 million in the first half of 2024.
That isn’t the reason the ultra-low cost airlines (like Spirit) are struggling. Its the opposite. The bigger air carriers simply copied the Spirit business model. Check out United’s Basic Economy fare. Its the same “cheap seat, but nickel and dime for every upgrade” that Spirit does.