Brian DeRoy has worked for Boeing and served as the media spokesman for the Seattle-Tacoma International Airport. A lifelong fan of aviation, here are some thoughts on why Spirit Airlines is no longer in business and the shadiness involving airline mergers.
After 34 years of operation, low-cost airline Spirit called
it quits after years of financial struggles, bad headlines and an attempted
merger with JetBlue Airways that was blocked by the Biden administration.
At least 17,000 people are out of work and many travelers stranded because of the government interfering with business. But it didn’t have to happen.
Recent history shows much larger airline mergers were given
the green light by the government. There’s a pretty clear pattern, if you act
like a patron trying to get into a Vegas nightclub, the government will give
you a wink and a nod to clear you.
Tourists flock to Las Vegas for the gambling, fancy food and nightclubs. Folks get all dressed up and don’t mind
throwing away gobs of money for “bottle service” and other perks at the clubs.
One trick the clubs use is having patrons stand in a giant
line and wait forever to get in. Some folks who choose to beat the lines use a
time-old trick, they slip the guy in the black suit near the front of the
velvet ropes a wad of cash and magically they get to the front of the line.
This trick seems to work if you’re navigating giant airline mergers too.
The government allowed Delta
Air Lines and Northwest Airlines to merge in 2008, creating then the
world’s largest airline. These two giants controlled “mega hubs” in cities like
Atlanta, Detroit, Salt Lake City and Minneapolis. Want to catch a flight on
someone other than Delta in one of these cities, good luck. They control prices
and smaller carriers like Spirit, Jet Blue and Allegiant helped drive prices
down in these monopoly markets.
How did Delta and Northwest be allowed to get in bed with
each other? Look at who was sleeping with a powerful DC politician.
Elaine Chao served as a board member of Northwest Airlines. She would
later go onto become the Transportation Secretary. Oh, one more important fact
is who she sleeps with: she’s
married to powerful former Senate Majority Leader Mitch McConnell. You
think if Spirit and JetBlue literally had someone in bed with a powerful DC leader,
the merger may have been approved?
Just like Vegas, in DC if you want to get into the club, you better slip the dude at the door a wad of cash, or heck, maybe even sleep with him later!
Spirit Airlines caused some of these problems themselves
with negative PR, poor branding and an unsustainable business model that I’ll get into in a future story.
I served as media spokesman for the Seattle-Tacoma Airport
when Spirit first launched service. At the time, Alaska Airlines controlled
more than 50% of flights, so it was viewed as a win for travelers that Spirit
would help drive down prices to Miami and other direct destinations.
Sea-Tac Airport was so happy to welcome Sprit that our
police department granted a waiver on fist fights for all Spirit passengers
that first day! It was truly a
heartwarming scene. (ok, maybe minor pushing and shoving only was allowed). More importantly, another option gave Seattle travelers
competition from a dominant carrier that helped drive prices down on select
routes.
Back to the DC slip us some cash theory – other airlines with powerful lobbyists kept winning.
Remember Continental Airlines? Their tail paint scheme lives on as United Airlines. (I personally prefer the United look, either battleship grey or the white “tulip” design.)
Not to be outdone by Delta and Northwest, the two airlines
announced a merger in 2010 that was even bigger and involved major hubs in
Chicago, New York, Denver, Houston and San Francisco.
Again, the question becomes how did these mega carriers get
the green light and little ‘ol Spirit
and JetBlue were told to go to the end of the line? Politics and money. Mass. Senator Elizabeth Warren led
a charge against the merger.
Delta & Northwest 2008 - 2010
- · $17.7 billion combined market value
- · Fleet/Employees: Combined workforce of 75,000 employees and a fleet of nearly 800.
Continental & United 2010 - 2012
- · $ 8.5 billion combined value
- · Network: 370+ destinations in 59 countries, 10 primary hubs.
- Total Mainline Fleet: nearly 800 aircraft.
Spirit & JetBlue
- · $ 3.8 billion proposed merger
- · Fleet size: Approximately 458, all-Airbus aircraft, creating the USA's fifth-largest carrier.
- · Market Position: Would have held a 9% market share, less than half the size of any of the "Big Four" carriers (American, Delta, United, Southwest).
Favoring people in line with the wad of cash in their hands includes
another major name: American Airlines. In 2013 they
merged with US Airways, who gobbled up Phoenix-based America West in 2005.
With American taking on US Airways and America West, they
ended up being the world’s largest airline and the numbers blow away any Spirit
and JetBlue marriage.
American & US Airways - 2013 - 2015
- · 6700 daily flights, 300+ destinations, 100,000+ employees
- · Fleet size: 900+ mainline aircraft (not including around 600 regional jets)
- · Critical East-coast hubs including Reagan-National (DC), Charlotte, Miami, Philadelphia & big presence at LGA & JFK airports in NY.
The numbers just don’t add up. How did all the giant
carriers get to merge, yet two far smaller ones got shut out? Something
just doesn’t seem right. It appears that 17,000 people directly affected and
the many of travelers who will soon be paying much higher airfares deserve some
answers.
The record shows all of the big airlines won with their
mergers, while the little guys got the shaft. Airlines with far more employees
and aircraft, who control mega hubs all won. Travelers looking for a cheap
flight are the losers now. The days of Spirit helping drive down costs in a
Delta fortress hub like Detroit are gone.
Bottom line: if you want to be at the front of the DC or
Vegas nightclub line, you better have connections because you’ll be riding on
the Greyhound now since even Spirit Airlines won’t get you there anymore.
Coming soon: Spirit did some of this to themselves –
this ain’t Europe.