There once was an airline with recognizable assets, steady demand, and a business model that seemed to make sense.
The Case For Saving This Airline Doesn’t Add Up
It wasn’t supposed to fail.
There were aircraft. There were valuable airport positions. There was a known product and a customer base that, in theory, should have been durable.
The idea was not to reinvent the wheel, but to take something that already worked and make it more efficient and ultimately more profitable.
For a while, it even looked like it might. The airline even led the industry in trying to offer a differentiated product onboard.
But it stopped working.
The airline did not collapse because of one bad decision…it was a combination of pressures that, on their own, might have been manageable.
Demand softened and costs crept higher. At the same time, the balance sheet offered little room for error.
Competitors got wiser and matched the product.
What had looked like a stable operation suddenly became fragile.
The airline looked away from core routes to leisure destinations.
Then fuel prices doubled after a war began in the Persian Gulf.
Almost immediately, the focus shifted from growth to survival.
A scramble began in search of outside capital, with leaders hoping that someone else would see value where the market no longer did.
While the owner thought the underlying “assets” would be enough to sustain the company, they were actually not that great..the aircraft were aging and inefficient compared to more modern jetliners.
Like many struggling airlines, this one turned to whatever sources of cash it could find. That included contract flying and even government-related work to keep aircraft utilized and money coming in.
Those moves bought time, but they ultimately did not fix the problem. Eventually the airline ran out of money and defaulted on the interest payments for its loans.
CONCLUSION
You might think this is a story about Spirit Airlines, an airline under pressure from rising fuel costs, struggling with its balance sheet, and now the subject of talk that the government should step in because it has “good assets.”
It’s not.
It’s the story of Trump Shuttle.
And the lesson is the same: sometimes consumer preferences change and airlines are suddenly no longer viable. Only this time, the former owner of Trump Shuttle is the President of the United States, who wants to bail out Spirit Airlines and probably wishes he had been President back when his now defunct carrier was struggling to survive.
Different airline. Same pressures. Same assumptions. Same ending?
Frank Lorenzo was very proud of unloading the aged out 727s that were plated with gold. Some never made it into service before the chapter 11. And trump shouldn’t run any business let alone our country,
Spirit is not Eastern . It needs someone with vision to change its model to serve small regional airports , and abandon the cheaper than parking airfares. Unlike most here, under better management I think it could be successful as it has a simplistically that the legacy carriers have lost to overpaid bragging tools that answer to a board.
Top mark for how you played out the punch line, Matthew.
Why is no one asking, “If Trump’s ‘Just buy it’ is such a smart business move, why isn’t some Trump-owned entity buying it?” Would Donald Trump be looking to buy this if it was HIS $500M out of pocket? Virtually all of the aviation world doesn’t want to own this, and many have laid out well-documented, cogent arguments for that position. Industry absorption of asset, including people, will definitely occur, and fairly quickly. Just take a pass and move on, Mr. President.
It’s a good point. He’s enriched himself so much through his insider deals and crypto scams that this $500 MN should be no skin off his back…
The real purpose of the bailout might be to make sure Spirit’s creditors are fully compensated, leaving the taxpayers to absorb the losses. In a liquidation bankruptcy, creditors might recover small fractions of their losses, if anything.
I feel this somehow gets at it…and I bet there’s insider trading going on too.
They throw the books at the soldier who bet on the Maduro capture, but will they go after the Trump or Lutnick families?
Agree, now let’s go after Congresswoman Nancy Pelosi and ALL of the Congress people, in all political parties that use insider information to enrich themselves. Hell will freeze before that happens!
You should definitely send all the evidence you have of Pelosi’s corruption to Kash Patel. It sounds as though you have enough to secure a verdict of guilt beyond a reasonable doubt, and it’s your duty as an American patriot to bring that evidence to light. We’ll be waiting for the spectacular bombshell that rocks the Democratic Party establishment to its core and finally puts an end to their skullduggery.
The machinery to pardon the soldier is already in motion:
https://thehill.com/homenews/house/5847141-luna-trump-soldier-betting-maduro-capture/
Reminiscent on the late-great Paul Harvey’s “Rest of the Story.” Anyway, for a guy who real wants future generations to admire him, pursuing this seems to work against this. Yes, we buy Spirit, things turn around, we sell it for a profit, he can take multiple victory laps. But, how can he imagine this is anything other than a loser?
Donald Trump is a special kind of business idiot. It takes skill and cunning to build two casino’s next to each to each other then bankrupt them.
Then buy the successful Eastern Shuttle, tacky up the aircraft with gold plated faucets, marble restrooms, and carpet so thicket that the FA serving trolley couldn’t get down the aisle. All of this added considerable weight to the Boeing 727-200’s.
Then drive it into bankruptcy.
Everything Donald Trump touches dies.
Wait, how could you lose money investing in Atlantic City or an ULCC?
It is worth noting that some industry members and analysts have emphasized that other airlines, especially low-cost carriers, could seek similar assistance from the government, if NK gets a bailout in the wake of the fuel-price spike.
Has anyone pointed out to (our recently self=identified “incredibly brilliant”) president that the government ownership of the means of production and distribution is literally the definition of socialism?
Just sayin.
To play the devil’s advocate, the guy has lots of experience having his companies go into bankruptcy and his airline doing so intensified his knowledge. Therefore the thing he needs to do is to put that knowledge to work by personally buying Spirit. I’m sure that with all the insider corruption this administration is already famous for he could somehow arrange for Spirit to just happen to run a bunch of incredibly overpri- I mean lucrative deportation flights.