Spirit Airlines planes at Fort Lauderdale-Hollywood International Airport (FLL) in Fort Lauderdale, Florida, U.S., Tuesday, Oct. 24, 2023. Spirit Airlines Inc. is scheduled to report earnings 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 deal that would have JetBlue Airways market competitor Spirit Airlines leaves Spirit with an uncertain future. But the decision didn’t just leave airlines with uncertainty. sent shivers down the spine of some of Spirit’s core constituencies.
Few places will feel the impact harder than Arnold Palmer Regional Airport (LBE) if Spirit can’t keep flying. About an hour east of downtown Pittsburgh in Latrobe, Pennsylvania, the airport serves the coal towns east of Pittsburgh, but also attracts travelers from a tri-state area with free parking, short TSA lines and low fares from Spirit. Arnold Palmer Regional Airport has almost all the amenities of any major airport, just on a smaller scale. There’s baggage claim, a car rental desk and DeNuzio’s Chophouse to feed travelers while they wait for their flight. But all travelers in the passenger area have boarding passes for one airline: Spirit.
This is due to the fact that Spirit Airlines is the only commercial carrier that provides service to LBE.
“Since they’re the only ones, they’re really important; it would be devastating if they went up and down,” said Gabe Monzo, the airport’s executive director.
Spirit has reduced its schedule at LBE from several daily flights to one direct flight to Orlando.
But Monzo says service will likely resume in Myrtle Beach in the spring.
A 2022 study by the Pennsylvania Department of Transportation put the regional economic impact of passenger arrivals and departures from the LBE at $213.9 million. Monzo says $100 million of that comes from Spirit Airlines travelers.
Spirit’s deals on basement fares
LBE won’t be the only one left in the lurch if Spirit can’t find a way forward.
Spirit Airlines fills a niche for leisure travelers, students, missionaries and others looking for a bargain, no-frills airline.
Professor Jase Ramsey, professor of management at Florida Gulf Coast University 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 he incorporates Spirit into his courses.
From the family’s perspective, he said a spiritless Florida hurts two ways. Its absence from the market will likely increase prices for inbound tourists from the north. But it would also cut off affordable vacation options for South Florida families headed to the Caribbean.
“That’s going to be bad for our region if something happens to Spirit price-wise. They’re usually our low-cost leader. If you want to take a family vacation from here, this is your airline,” Ramsey said.
HOUSTON, TEXAS – NOVEMBER 21: Travelers guide their luggage to the Spirit Airlines check-in desk at George W. Bush Intercontinental Airport, Tuesday, November 21, 2023, in Houston. (Jason Fochtman/Houston Chronicle via Getty Images)
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From a South Florida tourism perspective, Spirit is a lifeline.
“This is not good for us. South Florida really depends on them. It’s a healthy market with two low-cost carriers competing with each other,” Ramsey said, referring to Southwest Airlines, which also flies to RSW and which it says also maintains low fares. He just returned from a Caribbean vacation with his wife and young child, lured by the low fares and unlikely destinations that some other airlines shun.
Unusual destinations, small margins
For example, when civil unrest broke out in Haiti in 2018, Spirit — which offers nonstop flights from Port-au-Prince to Fort Lauderdale and New York — was a lifesaver for some.
“They kept flying and that was good for us because we were able to keep some programs,” said Lisa Stutzman, who organizes trips for Ohio-based Christian Aid Ministries. “It was a plus for Haiti,” he said, noting that both American and Delta canceled service to Port-au-Price at the time, leaving Spirit as the only option.
But not everyone in Port-au-Prince is a fan of the Spirit.
Wadestrant Jean-Baptiste, The president of the Evangelical Theological Seminary, which has about 300 students and is located in Port-au-Prince, said Spirit is a good option for some Haitians, but that the price is often not worth it for those struggling financially and that may be part of the reason Spirit is having trouble.
“Spirit sounds like a good option because our economy is dying and they offer cheap tickets, so people tend to go on Spirit, but in the end, they end up wasting time and money,” says Jean-Baptiste.
He said Haitians traveling to the United States like to buy items that are cheaper than in Port-au-Prince. And they love taking those items back home, but then they’re hampered by Spirit’s rules about bag dimensions and weight.
“They count every bag and it’s stressful,” Jean-Baptiste said. Going over bag weight, which often happens after shopping in the US, can be costly. “You end up paying more for the item than if 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 who just want to get away, Spirit is a good option.
Paul Vaaler, a professor at the University of Minnesota Law School and the Carlson School of Management, says Spirit’s focus on unusual destinations like Port-au-Prince sets it apart from other airlines. However, he says their margins are so small that it makes it difficult for Spirit to compete.
Vaaler believes the judge’s ruling against the JetBlue and Spirit merger was wrong and could be overturned on appeal. On Friday, the airlines formally appealed the decision.
“It was a very wooden Clayton Act decision,” Vaaler said, referring to the competition statute on which the judge based his ruling. Instead of stifling competition, a more muscular Jet Blue could make prices more competitive, he said.
“What I think the judge missed is that there is an offsetting beneficial effect of a merger; a large JetBlue could put more pressure on the legacy airlines,” Vaaler said. This is especially true in mixed markets like Los Angeles that attract both leisure and business travelers.
Part of Spirit’s challenges is that its prices are so low that it competes not only with airlines but also with buses and trains.
“They’re bringing in a whole new set of travelers,” Vaaler said, adding that the existence of ultra-low-cost carriers keeps everyone’s prices down. “There’s a role for these players and it’s really important to provide those options; they go places legacy airlines don’t,” he added.
Meanwhile, back in Latrobe, airport manager Monzo just hopes to see Spirit stay in the sky.
“The spirit kept us alive, that’s for sure, but no matter what happens, we’ll keep pulling away,” Monzo said.