Spirit Airlines airplanes at Fort Lauderdale-Hollywood International Airport (FLL) in Fort Lauderdale, Florida, US, on Tuesday, Oct. 24, 2023. Spirit Airlines Inc. is scheduled to release earnings figures on October 26. Photographer: Eva Marie Uzcategui/Bloomberg via Getty Images
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A federal judge’s order blocking a $3.8 billion-dollar deal that will have JetBlue Airways purchase rival Spirit Airlines leaves Spirit with an uncertain future. However the ruling didn’t just leave the airlines with uncertainty; it sent shudders through a few of Spirit’s key constituencies.
Few places will feel the impact harder than the Arnold Palmer Regional Airport (LBE) if Spirit cannot keep flying. About an hour east of downtown Pittsburgh in the town of Latrobe, Pennsylvania, the airport serves the gritty coal towns east of Pittsburgh but in addition lures in travelers from a three-state area with free parking, short TSA lines, and low fares from Spirit. The Arnold Palmer Regional Airport has just about all the amenities of any major airport, just on a smaller scale. There is a baggage claim, automotive rental counters, and DeNuzio’s Chophouse to feed travelers while waiting for his or her flight. But all of the travelers within the passenger area hold boarding passes for one airline: Spirit.
That’s because Spirit Airlines is the one business carrier to supply service to LBE.
“Being that they’re the just one, they’re really vital; it will be devastating in the event that they would go belly up,” said Gabe Monzo, executive director of the airport.
Spirit has trimmed its schedule at LBE from several every day flights to at least one direct flight to Orlando.
But Monzo says service will likely resume to Myrtle Beach within the spring.
A 2022 study by the Pennsylvania Department of Transportation put the regional economic impact of arriving and departing passengers from LBE at $213.9 million. Monzo says $100 million of that’s from Spirit Airlines travelers.
Spirit’s bargain-basement fare fliers
LBE won’t be the just one left within the lurch if Spirit cannot discover a path forward.
Spirit Airlines fills a distinct segment for leisure travelers, college students, missionaries, and others searching for bargain basement, no-frills fares.
Professor Jase Ramsey, a Florida Gulf Coast University management professor in Fort Myers, has two stakes in Spirit Airlines: he uses the airline for family vacations from service at nearby Southwest Florida International Airport (RSW), and incorporates Spirit into his courses.
From a family perspective, he said a Florida without Spirit hurts in two directions. Its absence from the market will likely raise prices for incoming tourists from the north. But it’s going to also cut off reasonably priced vacation options for South Florida families heading to the Caribbean.
“This might be bad for our region if something happens to Spirit from a price perspective. They are often our low-cost leader. If you wish to do a family vacation out of here, that’s your go-to airline,” Ramsey said.
HOUSTON, TEXAS – NOVEMBER 21: Travelers wheel luggage toward Spirit Airlines check-in desk at George Bush Intercontinental Airport, Tuesday, Nov. 21, 2023, in Houston. (Jason Fochtman/Houston Chronicle via Getty Images)
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From a tourism perspective in South Florida, Spirit is a lifeline.
“This is not good for us. South Florida really will depend on them. It’s a healthy market with two low-cost providers that compete with each other,” Ramsey said, referring to Southwest Airlines, which also flies into RSW and that he says also keeps fares low. He just returned from a Caribbean vacation along with his wife and young child, enticed by their low fares and offbeat destinations that another airlines avoid.
Offbeat destinations, small margins
As an illustration, when civil unrest pulsed through Haiti in 2018, Spirit — which offers direct flights from Port-au-Prince to Fort Lauderdale and Latest York — was a lifeline for some.
“They kept on flying, and that was an excellent thing for us because we were in a position to keep some programs in place,” said Lisa Stutzman, who organizes travel for Ohio-based Christian Aid Ministries. “They were a plus for Haiti,” she said, noting that each American and Delta canceled service to Port-au-Price on the time, leaving Spirit because the only option.
But not everyone in Port-au-Prince is a fan of Spirit.
Wadestrant Jean-Baptiste, president of the Evangelical Theological Seminary, which has roughly 300 students and is situated in Port-au-Prince, said Spirit is an excellent option for some Haitians, but that always the value is not price it for individuals who are economically struggling, and that could be a part of the explanation Spirit is experiencing problems.
“Spirit feels like an excellent option because our economy is dying, and so they offer low-priced tickets, so people are likely to go to Spirit, but in the long run, they find yourself wasting money and time,” says Jean-Baptiste.
He said Haitians who travel to the US like buying items which can be cheaper than in Port-au-Prince. They usually prefer to take those items back home but are then stymied by Spirit rules about bag dimensions and weight.
“They measure every bag, and it’s stressful,” Jean-Baptiste said. Exceeding the bag weight, which regularly happens after shopping within the U.S., might be costly. “In the long run, you pay more for the item you pay greater than when you bought it in Haiti,” he said, adding that he has flown Spirit a few times but prefers American Airlines. But he added that for Haitians just wanting to depart, Spirit is an excellent option.
Paul Vaaler, a professor on the University of Minnesota Law School and Carlson School of Management, says Spirit’s attention to offbeat destinations like Port-au-Prince sets it aside from other airlines. Nonetheless, he says their margins are so small that it makes it difficult for Spirit to compete.
Vaaler thinks the judge’s ruling against the JetBlue and Spirit merger wasn’t sound and might be overturned on appeal. On Friday, the airlines formally appealed the choice.
“It was a really wood ruling of the Clayton Act,” Vaaler said, referring to the competition statute on which the judge based his ruling. Moderately than stifle competition, a more muscular Jet Blue could make prices more competitive, he said.
“What I feel the judge missed is that there’s an offsetting helpful effect of a merger; a big JetBlue could put more pressure on the legacy airlines,” Vaaler said. This is particularly true in mixed markets like Los Angeles that attract each leisure and business travelers.
A part of Spirit’s challenges is that its prices are so low that it’s not just competing with airlines but in addition with buses and trains.
“They convey out a complete recent set of travelers,” Vaaler said, adding that having the ultra-low cost carriers around keeps everyone’s prices lower. “There may be a task for those players, and it is basically vital to supply those selections; they go to places that the legacies airlines don’t,” he added.
Meanwhile, back in Latrobe, airport director Monzo just hopes to see Spirit stay within the sky.
“Spirit has kept us alive, that’s of course, but regardless of what happens, we’ll keep plugging away,” Monzo said.