Spirit Airlines may not survive for the next 12 months – Jalopnik

After failed mergers with Jetblue and Frontier Sirit Airlines led November to submit bankruptcy, it was clear that Spirit Airlines was not financially on stable soil. The airline does not seem to be out of the forest yet, as Spirit on Monday in a quarterly Securities and Exchange Commission commission stated that the company could stop operations within the next 12 months. The downfall of the cheap carrier could have harmful effects for passengers of airlines, regardless of whether they have ever flown on a canary yellow area.

In The report for the second quarterSpirit mentioned a loss of $ 245.8 million, referring to unfavorable market conditions, such as a low demand for leisure trips. The report would later state that “Management concluded that there is significant doubt about the assets of the company to continue as a Going -peice within 12 months of the date on which these financial statements are issued.” However, the cheap carrier sees a light at the end of the tunnel. Spirit CEO Dave Davis tried to set up the employees of the airline an internal e -mail obtained by Newsweek. The CEO said that the worrying explanation “was required by our external auditors to convey that there is a risk if we do not make any changes. But we are.”

Although very few people are vocal fans of Spirit Airlines, it is impossible to ignore the downward pressure that the carrier sets on ticket prices in all airlines that are active in the United States. Prior to a $ 3.8 billion takeover rejected by the court, Jetblue’s own internal analysis showed that ticket prices would rise by 30% on routes where it would no longer compete against Spirit. Based on this evidence, a lawyer from the Ministry of Justice discovered that the absence of Spirit Passengers would cost $ 1 billion a year.

Spirit to circling the drain is a symptom of a larger commercial aviation trend in which extremes of every dollar from customers is increasingly common. Southwest controversially left the ranks of the cheap airlines in the hope of becoming a headline wearer and raking the profit that accompanies that status. The airline established in Dallas dropped his beloved policy “Bags Free Free”, introduced assigned seats and added Premium seats. If airlines have no reason to compete on price, they will try to increase profitability as much as possible.