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rapatel0 22 hours ago [-]
Fundamental problem: Flights don't make money. Airlines actually make all of their money through loyalty programs and credit card payments. They basically should have turned into regulated utilities long ago, but loyalty program revenue saved them.
Unless this initiative will turn into a credit card company (which nobody likes or wants to do) it won't go anywhere
Private equity will likely sell the company for parts. There is no operational improvements for cash flow that they can do.
Why does any of this imply they should become a regulated utility? This seems like a textbook case of the free market pushing prices down to cost. Having alternative revenue streams pushed that minimal price down; but even without that, there is no reason to think the market would have done anything other than push prices to the lowest level possible in that environment as well.
gruez 21 hours ago [-]
Company makes too much money: "they're extracting monopolist rents! They need to be a regulated utility!"
Company makes too little money: "there's no money in this industry! They need to be a regulated utility!"
gorgoiler 20 hours ago [-]
A more fair assessment would be: company runs a utility => they need to be a regulated utility!
The core part of air travel doesn’t really feel any different to a bus or metro or train. Off the tarmac then yes it absolutely feels like a Verizon store, as does some of the in-flight service, but there’s always been this weird feeling as a traveler that every carrier is basically the same thing but with different decals on it. Airline alliances are surely the ultimate example of this.
dghlsakjg 20 hours ago [-]
Have you ever flown spirit or any of the other ultra low cost carriers?
It very much is a different experience than flying a legacy domestic mainline carrier. I’m not alone amongst people i know who will happily fly the cheap seats on United/Delta/AA but won’t even look at a ticket from Spirit or Frontier even at a significant discount.
Compare it to a flag carrier like Singapore air and it is a shockingly different product.
All that’s an aside: we know what regulated airlines look like since we already tried it, much more expensive, with airlines competing not on price but on amenities.
tshaddox 20 hours ago [-]
I’ve flown Spirit and Frontier several times, and Southwest many times (I know they’re not quite in the same category, especially after their recent changes). I genuinely don’t know what you’re referring to regarding the experience being wildly different. Other than a few quirks about what they do and don’t charge for and how they board and assign seats, I feel like there’s almost no meaningful difference between these and legacy carriers like United and American. I honestly don’t even feel like the prices are consistently that different.
SOLAR_FIELDS 19 hours ago [-]
The two main differences are more armchair lawyering required to avoid fees (legacy carrier is often not going to put your bag in the dimension bin, but the Spirits and Frontiers of the world certainly will) and having to sit through three sales pitches instead of one on the legacy airlines. I think Delta is the only legacy carrier in the States that doesn't do obnoxious sales pitches - only the food cart upsell. Ryanair will come through with their hands out minimally three times since last time I rode them (though it's been several years, is it four now?)
One other difference I can think of is that carry-ons are more rarely included in the base fare in the budget airlines than the legacy airlines, though maybe that has also gone away since the changes where bags must be included in the listed price that Southwest pushed for.
thrownthatway 17 hours ago [-]
> having to sit through three sales pitches instead of one
I’m not from the US and have never flown any of the airlines being discussed here.
I’ve never heard of this, is there some YouTube videos you can point me to.
miki123211 14 hours ago [-]
Ryanair (EU) also does this, but the US is indeed pretty obnoxious here.
United even has commercials before the safety video; combined with the "if you're watching explicit content on this flight, please mind the children" announcement, those flights onestly honestly felt pretty surreal to me.
kelnos 14 hours ago [-]
United has gotten worse and worse with this. The ads after (not before) the safety video, and also before each movie you watch (and it's usually the same ads before every movie). A few years ago the ads were skippable, but not anymore.
The flight attendant also makes an announcement about the United-branded credit cards near the beginning of the flight.
But this is really just an illustration of what the top-poster of this thread said: flying people places doesn't make enough money, so they have to pursue other revenue streams.
jmspring 5 hours ago [-]
Look at prices (which are much higher than when I booked my trip later this summer), United prices are insane compared to others. Their prices were 4x what I paid for on SAS. I've long had a united club card, but likely circulating that out in the next year. Their prices for service/availability isn't worth whatever crack smoking is going into their pricing.
boppo1 6 hours ago [-]
Can't they just raise prices?
pibaker 3 hours ago [-]
People keep asking airlines to raise price for better service and then every time they travel they hop on a price comparison website to find the ticket with the lowest sticker price, punishing companies for actually raising prices.
cozzyd 8 hours ago [-]
The annoying thing is... I already have a United card :) (and being able to board early and bring a normal size carry-on on basic economy is one of the best perks).
xattt 8 hours ago [-]
> flying people places doesn't make enough money
Does it not make enough money for viability, or does it not make enough money for sociopath types in C-suites?
If it’s the latter, there will never be enough money for them and will keep pushing increasingly absurd customer-milking initiatives.
jjmarr 8 hours ago [-]
There's not a single major US airline that is profitable on charging passengers for tickets and flying them to destinations.
United is the closest, with only a 0.04¢ loss on every seat mile.[1] the other airlines lose 1-2¢/mile.
[1] There's two metrics airlines report: Cost per Available Seat Mile and Passenger Revenue per Available Seat Mile.
This is the cost/revenue for flying a seat, which may or may not be occupied by a person, to a destination. If the seat is empty it gets $0 in revenue but still costs money.
You can calculate the profit made from selling tickets per seat mile by PRASM - CASM.
xattt 1 hours ago [-]
Thank you for the clarification. It’s hard to not be cynical as a passenger with no experience in this environment.
Symbiote 17 hours ago [-]
I can't find videos.
The cabin crew stand at the front of the plane, and either play a recording or make an announcement saying you can buy a lottery scratchcard for €2 or whatever, with some of the money going to charity. They then walk down the plane "scratchards? scratchcards?"
They repeat this with a collection for charity (no scratchcard), a promoted drink, and some sort of food.
I think this is mostly unique to Ryanair (in Europe), I don't remember Wizz Air, Norwegian or EasyJet doing this. Part of Ryanair's marketing is to make the experience worse than it needs to be, so you know you're saving money.
RugnirViking 14 hours ago [-]
ive never experienced that on ryanair? I fly it pretty regularly, its just the food cart, and even that feels halfhearted, I see maybe 3% of customers actually getting something, so most of the time they dont even bother asking, just roll right on by unless you go out of your way to ask for something.
The only bad upsell they do is in the booking process. Are you sure you don't want a hire car?
If you search "Ryanair scratchcards" you'll see recent news articles about them.
I've used Ryanair once in the previous 5 years, so my experience might be out of date. There was a time my job was taking me to "holiday" destinations for meetings, back then I used Ryanair more often as they often had the only direct route. Maybe the scratchcard sales are more common on those flights.
rob74 15 hours ago [-]
Yes, Ryanair is the undisputed leader in finding new creative ways to take advantage of their captive audience and saving a few pennies here and there (e.g. I'm not aware of other low-cost carriers that have advertising on the overhead bins or put the safety instructions on seat-back stickers because it's marginally cheaper than using cards for that). Not to mention only flying from airports in the middle of nowhere to save airport fees.
...while other low-cost carriers try to distinguish themselves by not being quite as bad as Ryanair.
virgilp 13 hours ago [-]
I kinda' like Ryanair as lowcost airline? They're fairly efficient (boarding, serving etc), they _actually fly_ the advertised flights (with relatively few exceptions), and the food is reasonably priced. During COVID they would just give your money back, no shenanigans like "they're in our company wallet". Sure they have their quirks but they don't seem to go out of their way to deceive you, they're pretty open about what you pay and what you get.
Now Wizzair is "mostly not an airline" for me, because they have all the negative traits I hinted above. E.g. they'll happily advertise flights they have no intention of flying, make refunds hard, are as misleading as they can be about pricing, make it impossible to checkin online a few hours before the flight so that you have to pay their high fees, etc.
I wouldn't want the Ryanair experience for long-haul flights; but for short 2-3h ones within Europe, they're fine, I'm always considering them. Not for the perceived cheapness, but for the "I expect them to actually fly AND be on time" part.
notahacker 12 hours ago [-]
> During COVID they would just give your money back, no shenanigans like "they're in our company wallet"
Generally I agree with your view that Ryanair is decent at what it does, but COVID refunds happened only after the regulator stepped in to threaten them over their original "no refunds" and then "refund in the form of a voucher, with a short expiry date on it" policies actually being unlawful, and even allowing for the scale of its operations it received more complaints to the UK CAA than anyone else about refund handling during COVID.
virgilp 11 hours ago [-]
In Romania I think they just gave back the money (or maybe it was on a voucher with "if you don't use the voucher by date X, we'll refund the money"). which is in stark contrast with how other low-cost airlines like WizzAir behaved. Perhaps it was regional policy; or perhaps it was due to their previous interactions with UK regulators? But for me, they gained a lot of respect for them back then (whereas WizzAir is on the "only if absolutely no other choice" list - and I think I only used it once, for a business trip where it had a good direct flight AND I didn't care if I actually made it to the destination, or if I got stranded there for a few days - since the company would've been paying)
reillyse 7 hours ago [-]
Ryanair have been regulated into compliance very effectively by the European authorities- everyone knows they are scumbags and make sure they don’t get away with nonsense.
Literally how regulators should work. They look at the outrageous things they try to do and make laws to prevent them. It’s worked very well and also hasn’t ended Ryanair (which is the usual anti regulation argument , that we can’t have cheap things with regulations).
I personally never fly Ryanair because I’ve had to sue them (and won) in the past, they really do suck.
SOLAR_FIELDS 5 hours ago [-]
When's the last time you tried to claw back your EU mandated clawback for things like delayed flights from one of these airlines without fighting tooth and nail and threatening legal action? Perhaps this has improved in recent years, but when I was flying EU regularly several years ago getting that refund has always been an uphill battle.
peyton 3 hours ago [-]
Hah, I tried when BA had to cancel my flight due to a computer system outage. Coincidentally, some “activists” handcuffed themselves to a fence on the runway at the exact same time, which was an act of terror or whatever and thus not covered, so I did not receive my money back.
FridayoLeary 9 hours ago [-]
I actually like wizz. They are dirt cheap which is the only thing i care about. The ground crew don't openly despise you, unlike easyjet, they tolerate you and their cabins are all right. Just they don't have any customer service if anything goes wrong.
"Wizz; Not the worst airline you've ever flown on"
9 hours ago [-]
extraduder_ire 4 hours ago [-]
The safety card thing, and lack of seatback pockets is mainly to speed up turnaround after everyone's off the plane. (planes only make money when they're in the air)
After they made this change years ago, they said so explicitly in their marketing around continuous improvement.
roryirvine 13 hours ago [-]
They don't have to actually sell a single scratchcard for it to be worthwhile for them - the whole point is to cheapen the experience.
They have an entire theory of marketing based on people believing that "if it feels cheap, it is cheap", and so they deliberately build in a bunch of annoyances (scratchcards, arbitrary baggage restrictions, checkout hoop-jumping, endless PR about removing toilets or running standing-only flights) which serve to make their service seem as cheap and nasty as possible.
And it works: some people simply ignore the nasty aspects, others are willing to put up with them in order to get a bargain, and yet others actually take pride in wading through the crap - usually expressing it in "I beat the system" terms. And here we are talking about it on a barely-related thread - carrying their marketing message further!
abustamam 6 hours ago [-]
It's kinda refreshing to see a company sell the illusion of bargain bin instead of selling the illusion of luxury like many other companies!
Sounds like all US airlines, honestly. No shame, no pushback, just endless pressure to spend.
tshaddox 17 hours ago [-]
I haven’t actively surveyed all the airlines, but I happened to notice recently that United charges for carry-ons.
dghlsakjg 8 hours ago [-]
Besides the seats, seat pitch, entertainment, cabin classes, upcharges, boarding staff paid commission to reject carryons, advertising everywhere, the unpolished behavior of other clientele, customer service, and how they handle failure, sure it’s practically the same.
alistairSH 8 hours ago [-]
Failure is the one that always puts me off...
At least with United, there's a good chance they can get a broken plane running again, or swap in a different airframe, within a reasonable number of hours. For example, my last flight to Puerto Rico was delayed by ~5 hours, due to a nose gear problem. They eventually swapped air frames around, giving us one that was scheduled for the late day flight, and got our air frame fixed in time for that later flight.
Spirit or another super-low-cost? They don't have the extra air frames and number of flights to do that. You get to wait even longer, losing valuable vacation days (or missing work meetings).
19 hours ago [-]
hn_throwaway_99 19 hours ago [-]
I feel like you're living in a different universe then. I will literally never fly Spirit (well, neither will anyone else) nor Frontier ever, I loath the experiences I've had on them so much.
First, as someone with relatively long thighs, I literally don't fit in their sardine can seats. But more relevant to most people, while things may be OK if everything goes perfectly and nothing is delayed or cancelled, you are completely SOL with Spirit/Frontier if something goes wrong (and "something" may just be they themselves decide to cancel an undersold flight at the last minute). It's nearly impossible to get someone to talk to, I feel like the employees know how shitty their companies are so they all have an attitude like they DGAF, and it's a mad (expensive) scramble to find alternative arrangements at the last minute.
I've never had as abysmal experiences as I've had on Frontier compared to any other airline.
eru 18 hours ago [-]
From a customers' immediate point of view, this sucks for you.
But it's great they are not regulated utilities. Because either everyone would have to pay for extra legroom, even if they don't need it, or some freakishly long people would not be able to pay for the extra legroom that they need.
That's not how regulation works. Or at least not how it has to work.
I don't pay a flat fee for my water, electricity, or gas usage, regardless of how much I use. I pay for the gallons, kWh, and therms I actually use. (Yes, there are other fees on those bills, but my usage actually matters.)
Airline regulation doesn't have to specify standardized seat pitch, etc.
dghlsakjg 8 hours ago [-]
Airline regulation as common carriers is not a hypothetical. We used to do it, and none of the things you describe were an issue
vineyardmike 15 hours ago [-]
Ah yes, because I am also forced to buy the same amount of electricity and water from my regulated utility regardless of need.
jmspring 5 hours ago [-]
My parent "airports" are Bellingham and SeaTac. I hate SeaTac with all my soul. Next admission - primary carrier is Alaska. They are mediocre to ok. Cabin crew, always friendly. I've had random flight cancellations - some seatac/bellingham, others randomly before/after homeland security budget BS. In all cases, they rebooked on something ridiculous (a day or two later, hours that made no sense) and their call hold times (or call backs) are hours. Sadly, I'm in a captive market and am very proactive when day of travel is around.
tshaddox 17 hours ago [-]
I’m relatively tall and have a generally rough (but tolerable) time with all domestic bottom-tier seats.
I have no difficulty believing you when it comes to customer service. I’ve never had any issues requiring anything beyond the most basic customer service, so I just haven’t been exposed to differences between airlines in that regard. I also understand that a bad experience can leave an exceptionally bad impression. I suppose the only thing that might surprise me is if the higher-cost airlines don’t also have terrible service.
SmellTheGlove 18 hours ago [-]
Yup, came here to say this. Once you're on the plane and its in the air, Spirit and Frontier are like pretty much every other domestic airline. There's slight variation in terms of whether you get a whole can of coke for free or not. If you're taller than me, the 28" of seat pitch vs say 31" on delta may make a difference, but I'm only 5'9".
I still avoided them like the plague because the legacy carriers are selling you operational performance and the ability to usually get you where you're going within a reasonable timeframe if you're delayed or canceled. Spirit, Frontier, Allegiant, whoever else, do not do nearly as good a job when something goes wrong. Although they should get a lot of credit - none of them have ever had a fatal crash.
fragmede 15 hours ago [-]
> Once you're on the plane and its in the air, Spirit and Frontier are like pretty much every other domestic airline.
Yes, if you ignore the part where things are different, it's basically the same. Trouble is, those differences do meaningfully make a difference. There's no objective measure for misery and happiness, but flying Jsx is nicer than Spirit. You can put a dollar value on misery, that's why one's so much more expensive than the other.
kakacik 15 hours ago [-]
Sounds like you guys need some very basic regulations we have here in Europe - companies have to take care of folks, provide food, accommodation and replacement flights (and up to 600 euro in case of overbooking depending on distance). Not great, but worries like above are simply not on our calendar when traveling, low cost or not.
Also, here in Europe, traditional aircraft carriers have been migrating their quality towards bottom end (ie Swiss not giving any beers for free even on intercontinental flights, microscopic legroom also on intercontinental) while for example Easyjet is for me at this point a high quality reliable carrier with no bullshit. Ryanair is a dumpste3r but luckily they don't serve my nearest airport well.
boppo1 6 hours ago [-]
>Compare it to a flag carrier like Singapore air and it is a shockingly different product
Never flown one of these, can you describe the difference? Hard agree about what you said about the others.
jmspring 20 hours ago [-]
You state an opinion, but not why for that opinion. I’m mostly stuck with Alaska or a small handful being a couple hours north of Seattle and driving to/dealing with SeaTac is not fun. In the caliber you said you wouldn’t travel includes aliegent.
I’ve not flown them and stick to Alaska and the local puddle jumpers to get off the island.
fcarraldo 19 hours ago [-]
Singapore Air is majority government owned and is closer to having “utility” airlines than not.
SOLAR_FIELDS 19 hours ago [-]
Conversely, Air India was majority government owned, did a pretty bad job of it, and is now privately owned.
eru 18 hours ago [-]
Yes, Singapore Airline is government owned, but I don't see how it's a utility?
presentation 10 hours ago [-]
If anything it’s a tool for making people outside of Singapore like/want to do business in Singapore, so if that makes it some twisted kind of utility then I guess anything can be a utility. Not like they have domestic flights.
RajT88 19 hours ago [-]
My company travel tool won't even let me book Spirit without it being flagged to HR.
xmlblog 7 hours ago [-]
This. Maybe there's a market opportunity for people who want to be treated like cattle, but even Spirit couldn't find it.
dec0dedab0de 10 hours ago [-]
I think Spirit has the most comfortable seats out of all the ones you listed. Especially if you're lucky enough to have a row to yourself and get to lie across all three of them.
19 hours ago [-]
Krasnol 5 hours ago [-]
Singapore Airlines is majority-owned by the Singapore government's investment and holding company Temasek Holdings, which holds 55% of voting stock as of 31 March 2020
The question is whether we feel air travel is as essential to everyday life as busses and trains are.
In other words, do we need to make sure everyone can afford to take a flight somewhere?
Or is air travel a luxury that we can allow the market to set a price for?
Maybe flights are simply too cheap, and we should just allow airlines to fail, which will limit supply enough to bring ticket prices back up to a level that is sustainable for airlines as a business.
Of course, this means that a lot of people are going to be priced out of being able to fly places for non-essential reasons. Which, given the environmental impact, might not be a bad thing, although it will make life very different for most people.
tracker1 5 hours ago [-]
Personally, I'm inclined to drive over fly if I can get there in 8-12 hours or less. Even if it uses up close to a full day for a round trip. I absolutely abhor flying. I'm a bit tall and fat, and I've been stuck on the last row, inside seat with less room in both dimensions while the person in front of me tries to lean back literally dislocating my knee. All because they oversell flights, and your seat selection at purchase time apparently counts for jack squat when you show up at the airport to check in... you really needed to "check in" online the day before, even if you were in meetings until 9pm with no time to actually step aside to do the check-in on your phone that's just a miserable experience in itself, because nobody does accessibility testing with phones and larger text/display sizes.
elektronika 5 hours ago [-]
> The question is whether we feel air travel is as essential to everyday life as busses and trains are.
Anywhere I can get to by train in the USA I can go faster and cheaper by plane. By bus I can go "cheaper" if I ignore the value of my time and the people offering me meth at the bus-stop.
mr_toad 12 hours ago [-]
Streets, tracks and maybe tarmacs are public utilities, not the vehicles themselves.
bandrami 18 hours ago [-]
I think the ultimate example is the fact that most routes are run by other companies than the branded carrier; capacity providers like Endeavour and SkyWest just borrow the name and livery of the major carrier they're operating for that day.
sandworm101 10 hours ago [-]
>> every carrier is basically the same thing but with different decals
Worse yet, you buy a ticket for carrier A, then discover that due to xyz partnership agreement you are actually flying on carrier B.
ericmay 10 hours ago [-]
Yea that's a good one. The problem is folks don't have patience. They see an airline fail and instead of waiting until a new competitor enters the market, as they inevitably will, they want to start regulating or look to other "solutions" but these things take time to work themselves out. It's a free market, not an instant free market.
wat10000 9 hours ago [-]
Or maybe a new competitor doesn't enter the market, and we're stuck with a mere four major, three mid-sized, and some smaller airlines in the US. It's still a highly competitive market even with Spirit gone.
devilbunny 21 hours ago [-]
Meanwhile, first class today is not very much more than coach cost in the regulated era.
Try flying Delta. It isn’t the cheapest option, but you really do get better service.
If you want to feel special, do Aeromexico first class. The checked bags are waiting for you before you can even walk there on a domestic flight.
Spirit was cheap. And if you’re poor, you need cheap. If you aren’t, buy better service and don’t complain that it’s just Greyhound on a plane.
rogerrogerr 20 hours ago [-]
Am I the only one who really doesn't care what kind of service I get on a plane? I don't drink alcohol, so I don't care about that. I bring my own water bottle, so I'm good on that. The little bags of pretzels are nice, but if they stood at the front and launched them out of a t-shirt cannon, I'd be good with that.
As long as the required crew of flight attendants doesn't assault me, I've never really got off a plane thinking anything at all about the service. Just "where do I need to go next" or "I'm glad to be home".
jhgorrell 20 hours ago [-]
When your flights are delayed/resechduled there is a world of difference.
"Get in line" vs "you are already rebooked". (my Air Canada experince.)
alister 19 hours ago [-]
> "Get in line" vs "you are already rebooked". (my Air Canada experince.)
Which of the two was the Air Canada experience?
jhgorrell 19 hours ago [-]
"you are already rebooked" -- they were fab.
scottyah 6 hours ago [-]
Dang no way? I had a terrible experience with them (tbf it was half a decade back at this point). We were in line to check in, something like 1.5hrs before a one hour flight. The line was agonizingly slow (only 2 of like 5 check-in counters were staffed), and when we got to the counter they said we were too late, missed the window for the flight. We only had carry-ons, were 3min late for their arbitrary window, and the plane still wasn't scheduled to leave for an hour or so.
We were clearly in line before their deadline, were certainly going to make it to the gate before they even opened for boarding, had no checked bags, and they made us buy new tickets. The cherry on top was that they ran flights every hour, so we bought the ticket for the next hour but the gate agent let us on the original flight we had- so they basically just forced us to pay double for our flight.
spockz 13 hours ago [-]
Same here for KLM.
rogerrogerr 20 hours ago [-]
Fair enough, I've been in those situations where the service on the ground side of the gate matters.
kelnos 13 hours ago [-]
> I bring my own water bottle
Not arguing against your point, but it astounds me how many airports do not have water-bottle refill stations. My home airport (SFO) does, but many in the US still do not. I feel like that sort of thing should be legally mandated, given we're not permitted to bring water through security. The paltry amount of water they give you on the flight (and at times of their choosing, not yours) is not enough to rehydrate basically anyone.
wat10000 9 hours ago [-]
You can ask them for more, and at a time of your choosing.
eru 18 hours ago [-]
It's good that you don't care, and that you can self selected into getting the cheapest fare possible. The market works.
moduspol 9 hours ago [-]
Honestly I kind of liked Spirit because the snacks aren't free. When it's snack time, I don't have to wait 45 minutes for the cart to get to me because it's not stopping at every row. And it doesn't bother me to spend $4 on a snack because I already spent so much less on the ticket.
But I guess I also don't fly much, and I never had to deal with delays or rebooking with them.
baq 14 hours ago [-]
[dead]
throwaway2037 19 hours ago [-]
I like the EU model. The regulators set a "bare minimum" set of requirements. They have much better minimums that North America, and the fares are (still) cheaper per kilometer travelled. Also, I love the penalty system when flights are late.
extraduder_ire 4 hours ago [-]
Some of that lower cost in Europe is down to jet fuel being tax free, as well as the US having multiple mandatory taxes on plane tickets.
The cost of EU passenger rights payouts is vanishingly small on the average ticket if almost all of them arrive as advertised.
wallst07 13 hours ago [-]
"They have much better minimums that North America"
Can you enumerate these? As far as I'm aware Ryan Air is basically more "Spirit" than Spirit Airlines.
throwaway2037 11 hours ago [-]
For one, the penalty system for late arrivals. It is such a big business now, that there are whole businesses setup to advise you and do the work for the cut of the penalty paid. And that penalty system applies for trains too.
Also, look at Ryan Air (and Wizz Air) fares. They are consistently the lowest cost per kilometer travelled anywhere in Europe. Sure, it is like a flying bus, but it gets the job done, much cheaper than anything the US.
lostlogin 21 hours ago [-]
Company, always: "We need government subsidy". Then hell yes to regulating what they do.
filoleg 20 hours ago [-]
Spirit wasn't asking for a government subsidy to get saved from bakruptcy. They were asking to be allowed to get merged with JetBlue (which could've saved them from bankruptcy) and got denied by the government. Those two things aren't the same.
rogerrogerr 20 hours ago [-]
My understanding is that the Spirit/JetBlue merger was blocked by the Biden DOJ. Were they asking for that again, or was it a different thing that failed in negotiations with the feds recently?
gizmo686 20 hours ago [-]
The negotiations that were occuring directly prior to Spirit's shutdown were not merger related; but a direct government bailout.
wallst07 13 hours ago [-]
Biden/Warren backed/forced the DOJ to sue Jetblue/Spirit to block the merger for antitrust.
This doesn't seem to be a antitrust issue at all, it looks like it was one company bailing out another.
“Our win in court is a victory for U.S. travelers who deserve lower prices and better choices,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We fought this case to protect consumers who, as the court recognized, ‘otherwise would have no voice.’ I am incredibly proud of the Antitrust Division’s team and our state law enforcement partners’ tireless advocacy.”
eru 18 hours ago [-]
Two wrongs don't make a right.
lostlogin 16 hours ago [-]
I know it’s frowned upon many circles, but regulation can work and do good.
There is plenty of crap legislation and regulation about, but it doesn’t have to be that way.
eru 15 hours ago [-]
Yes, but be careful not to commit the 'nirvana fallacy' of comparing real world circumstances against idealised optimal regulation.
kelnos 13 hours ago [-]
Sure, that's fair. But often enough I see people (not accusing you of this) doing the opposite: seeing bad regulation, and drawing the conclusion that the only solution is to remove all regulation and "let the market decide".
freedomben 11 hours ago [-]
Have you ever tried to get rid of bad regulation? I have, and it is essentially impossible. De-regulation is usually the only path once the initial regulation is in place. It also only ever seems to grow in complexity and onerousness, rarely ever goes the other directin. It's like dealing with a massive legacy codebase that also has the power to throw you in jail.
I'm not against regulation, I think there are areas where it's needed (privacy is a good example), but it is fire, and fire should only be played with when you really need it because it can easily grow out of control and burn things you don't intend to get burned.
komali2 11 hours ago [-]
Have you ever tried to regulate an unregulated industry preying upon a population?
Look what it took to wrangle the cigarette industry. Look how unfettered gambling is ripping through the USA.
Or look at industries pre-regulation. Meat, building construction, medicine...
At minimum we have as much evidence that "the market" is capable of being as bad as "bad regulation."
happyopossum 20 hours ago [-]
[flagged]
mysecretaccount 21 hours ago [-]
Even with your uncharitable framing I agree with both quotes.
jmalicki 20 hours ago [-]
Can you educate the rest of us by explaining your reasoning?
throwawayqqq11 20 hours ago [-]
Breaking down complex topics into binary black and white doesnt have to be wrong. The more important part is, how much wealth they extracted and how exactly. Was it market dominance with a superior product or amoral cost externalization.
The angle of treating transportation as regulated utility shifts the business focus away from profit onto providing services, which sometimes can cost more than your income. Similarly, would you close schools, because they didnt make enough money? Airlines are highly subsidized anyway, treating them as regulated utilities falls short of taking public ownership as public institutions, where services just cost money/subsidies.
kennywinker 19 hours ago [-]
Utilities and transportation should be public services, and they are in many places. Sometimes it works well, other times it works less well… usually because the capitalists lobby it into neglect and then say “see it’s not working / losing money let the private sector take over”.
eru 18 hours ago [-]
> Similarly, would you close schools, because they didnt make enough money?
Yes, of course. We should separate school and state.
> Airlines are highly subsidized anyway, treating them as regulated utilities falls short of taking public ownership as public institutions, where services just cost money/subsidies.
How are they highly subsidized? And where? Perhaps we should fix that, instead of adding to the problem? Two wrongs don't make a right.
chadgpt1 16 hours ago [-]
You'd force an entire generation of children to simply not be educated?
eru 14 hours ago [-]
No, why? I didn't say that we want to outlaw education.
Though I admit heavily taxing education on account of negative externalities is tempting.
throwawayqqq11 12 hours ago [-]
You mean better education for uber achievers that can pay more for it? That is already the case in the US [1] for a long time now and with expectable outcomes of poverty and wasted economic and human potential, observable today. With the melting middle class, these problems will continue to grow. Are you for euthanasia already? The next step is cutting public education even more and divert these budgets into private school via school vouchers [2]. Can you guess the outcome?
> "Today I learned that a new account starts getting rate limited upon receiving its first downvote. Yay?"
Your comments are one-line thoughtless mic-drops, the system is working.
> "If a service cannot be provided for a cost below what someone will pay, the service should not be provided as providing that service is a lose-lose situation."
It can be a win-win situation, not everything is about profit. See also:
> "How did poor people who needed to fly fly when flying was expensive?"
If a poor person can fly somewhere to get a better job, they stop being a poor person. That's a win for them personally, and a win for society, and a win for future government tax income. It's also a win for the airline which moved them and got paid for it. The only time it's not a win is if you have a myopic focus on "but it costs money now and that's bad".
ahoka 16 hours ago [-]
Welcome to feudalism, yay.
roxolotl 20 hours ago [-]
Not op but I also agree with the framing assuming you add “and they provide a vital service” to both. If a vital service is being used to extract profits it should be regulated so that equal access to the vital service can be provided. If a vital service is being provided but cannot make money it should be regulated so that it can be sustained since it is vital.
Now what is vital? Is Spirit vital? That’s the hard to define part.
card_zero 19 hours ago [-]
1. "We want to have this, but we don't want to pay for it!"
2. "We won't pay for this, but we still want to have it!"
These are of course both fair points. Why should we "pay for" things, what's that all about? We should just naturally have the natural things that we naturally want, supplied by pixies.
sailfast 19 hours ago [-]
I think they're both actually "We want to have this, but we don't want to pay too much for it just so a CEO can make 10,000x their workers and potentially ALSO still lose money."
eru 18 hours ago [-]
How much of the money goes to CEO vs shareholders is something they can work out between themselves.
If the airline goes bankrupt, that just means that the creditors get less than they otherwise expected. That's something to haggle out between creditors and management and shareholders.
(Or do you want to imply that if the shareholders saved money on CEO compensation, they would give the money to ordinary workers?)
jodrellblank 9 hours ago [-]
It JUST means that the creditors lose money? It doesn't stop the planes flying? It doesn't stop the humans and freight from being transported? The plane maintenance? The airport's budget isn't affected, the airline employees aren't affected?
anticorporate 12 hours ago [-]
It's funny how any time something comes along suggesting consumer choice should play a role in a market economy, these types of comments come along to suggest its not their place.
There's no fundamental rule of a capitalist society that consumers have to make their choices out a narrow selection of options provided by corporate oligarchies between the criteria they would prefer to compete on. As a customer, I can choose which airline I want based on whatever criteria I want. Maybe I pick it based on pay ratio between executives and average workers, maybe I pick it based on whichever has the font I like best on their homepage.
card_zero 19 hours ago [-]
Right, but what makes that viable? Something so topheavy ought to go the way of the Irish elk.
Edit: maybe a piñata is a better metaphor. :(
nixon_why69 13 hours ago [-]
Culture. Today's CEOs aren't more valuable than those of 30 or 60 years ago but the going rate is way higher, so they're paid what's expected.
achierius 16 hours ago [-]
> We should just naturally have the natural things that we naturally want, supplied by pixies.
Is this how you see roads? Are we entitled for wanting those to be paid for by the state? What about the police? Should we have to pay whenever a police officer stops a mugging -- or is the wage of that officer, too, supplied by pixies?
card_zero 13 hours ago [-]
These have remained unresolved questions, for me, for decades. When an internet pal was trying to found a libertarian (what noun should I use) locale, in Awdal in Somaliland (that detail of whether it was really in Somaliland or not was more debatable at the time), he first founded the Awdal Roads Company.
So obviously there are theories about how these things can be privately funded. But I can never remember the theories. Looking at that link, it was going to be toll roads. People dislike this, understandably. One problem with private roads is that you can't exactly use a competing road, which might entail moving house, or changing your plans for the day, or your job.
I have a vague notion that roads could be funded by a group of businesses that benefit from them, sort of like the W3C or a mall. Non-profit, sponsored roads, or something. (Now I'm thinking of runestones, several of which are near bridges and say "He made this bridge for his soul" or a similar statement.)
Don't ask me about police, I don't even understand crime and punishment, really.
I should maybe add that I meant "We should just naturally have the natural things that we naturally want" somewhat unironically. I feel that way, the same as anyone else. The difficulty, as observed up the thread, is in working out what's natural, or vital, or wanted and feasible. There are no pixies to magically know the answers, to my regret, only governments, and they only pretend to know. By buying and selling we can almost figure out the answers, contingently and approximately, but a lot goes wrong with that, including the friction of having to do it all the time, and "rent-seeking", whatever defines that really.
jodrellblank 8 hours ago [-]
> "I have a vague notion that roads could be funded by a group of businesses that benefit from them"
Everybody benefits from roads. People who use the roads directly, benefit from being able to move around quickly. Companies which move raw materials around to make products benefit from roads. People who buy products that were moved and delivered by road are benefitting. People who can work because roads enable tourists to come, benefit from them. People whose decent coworkers were once children who were educated by teachers who got to work by road, are benefitting years later. People whose family members didn't suffer a massive property loss because they could call a plumber who got there by road, are benefitting. People who can engage in long distance trade and relationships by post, benefit.
Even though there are people harmed by roads, there's nobody who doesn't benefit from roads.
We have ways to charge people-who-use-roads-more, more money; they pay larger road tax for commercial vehicles, for larger wheelbase vehicles, for larger engine vehicles, they pay more fuel tax because they drive further and buy more fuel, they pay more tax on parts and labour because they wear out their vehicles faster, replace parts and vehicles more often, spend more on mechanic work.
I also don't really want it so that a business owns private roads, and if the road gets a sinkhole and traffic cannot flow, the business can just shrug. If ambulances can't get through, if garbage collection can't happen, if people can't get to work, if companies can't deliver products, the company doesn't have to hurry to fix it. They only care to the extent that their toll income has dropped by one road's worth, but if they fix it within a month or two that might be fast enough for them - but not fast enough for the rest of us to avoid serious consequences.
roxolotl 11 hours ago [-]
You’re missing the vital framing. You’re welcome to strawman the strawman but the respond with yet a third: “I’m not able to pay for it and will die as a result”. I’d prefer to live in a society where we avoid as many situations like that as possible. It’s the primary purpose of a government and a nation. Solving the problems of aggregating the required parts? Again it’s why we work together and it’s the point of government to solve that problem.
Good regulation doesn’t completely avoid market mechanisms it tries to tame the more brutal ones in order to maximize return to society. The roads argument is important because without roads we do not have any trade. So by collectively and somewhat proportionally, to use and income, managing the cost of road it makes everything else the market does possible.
card_zero 10 hours ago [-]
So you're saying it's all about the concept "vital" and I should pay that more heed? But I don't think the term "vital" solves the problem of information. Natural, vital, optimal, feasible, wanted, it's all the same question, which is, uh, "how should we specifically cooperate," I guess. Government just knows less about this than the people involved do. Hayek yek yek.
Maybe you mean that in desperate situations - such as working out what to do about roads - we might as well resort to government. We do, so I guess you're right.
nixon_why69 13 hours ago [-]
Lots of roads in the USA are built by private developers, then they're deeded over to the municipality for "free" so its on taxpayers to do maintenance.
jodrellblank 9 hours ago [-]
And the tax income from sparse, sprawling suburbs, is not enough to cover the cost of providing sewage/electric/gas/garbage collection/firefighting/road maintenance. So either 'wealthy' suburbanites end up being subsidised by taxes from dense 'poor' inner city taxpayers, or the city has to approve a new suburb to get a chunk of income from new house sales and taxpayers to pay for the maintenance of the previous suburb's roads, in an unsustainable pyramid scheme where the city has to build more roads forever just to stand still.
nixon_why69 8 hours ago [-]
I'm with you in the first half but not the second half. State governments don't allocate state money to helping suburb/exurb infrastructure unless it's specifically a state road. Never for residential roads. What happens is that maintenance gets deferred indefinitely, it goes to shit because nobody has the money for it, and the homeowners who are affected conclude government doesn't work.
komali2 10 hours ago [-]
> and "rent-seeking", whatever defines that really.
"The act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth." This is in opposition to profit-seeking, where "entities seek to extract value by engaging in mutually beneficial transactions." https://en.wikipedia.org/wiki/Rent-seeking
Friend, with respect, the mental blocks you're coming up against regarding roads, police, and resource distribution, within an American libertarian framework, are outlining exactly why American libertarianism (unregulated capitalism) is an untenable ideology.
Private roads don't make sense in capitalist framing because there's no possibility of competition - no market for a free hand to move in. Furthermore, there's ethical issues around the fact that roads won't be built to people who aren't as instrumentally valuable to capitalism, which is in opposition to the idea that all humans are equally intrinsically valuable. In plain words: poor people won't get roads built to them, won't be able to work, will get poorer. This is bad, and if you want to just be selfish about it, will lead to crime and social discohesion.
This argument extends to all the resources governments typically involve themselves in: electricity, sewage, water. We have direct evidence that when they try to privatize these things, it goes horribly wrong: see, the American healthcare industry, or, what's happening to the UK as it privatizes sewage. See the Texas privatized power grid.
All capitalist entities (corporations) are simple algorithms: Make profit go up. We like to tell ourselves that making profit go up is possibly only through mutually beneficial trades, aka the aformentioned profit-seeking, however that's not true in practice. The most profitable activity is slavery driven labor, and the most profitable state for a corporation to be in is monopoly. All optimized capitalist behavior selects for and trends towards that activity and that state, and literally the only way to stop this is through establishing some kind of hierarchy that allows for the limiting of corporate behavior - governments, and regulations.
Any example you give of a corporation in capitalism not trending towards slavery or monopoly has one of several explanations. 1. It's regulated, 2. It's led by someone who ethically doesn't want to trend towards slavery or monopoly, or isn't intelligent enough to do so. In the case of 2, that company will eventually be surpassed and consumed by someone with less morals, more intelligence, and more capital (more power).
> "We should just naturally have the natural things that we naturally want" somewhat unironically. I feel that way, the same as anyone else. The difficulty, as observed up the thread, is in working out what's natural, or vital, or wanted and feasible.
I completely agree, and there are other ways to do this other than capitalism, regulated or otherwise. I strongly recommend the most cited economist in history: Karl Marx. Peter Kropotkin is also very good, "The Conquest of Bread" is a great speculation of alternative systems.
kennywinker 19 hours ago [-]
The extremes of capitalism have a negative impact on people’s lives.
The first scenario it harms us by under-serving and scammy practices, the second scenario it’s over-extractive and funneling money from the many to the few.
bigyabai 20 hours ago [-]
Companies like John-Deere should be able to survive without abusing their downstream customers. Many farmers are importing tractors from China because they're cheap and not hostile to repair like JD is. Some people might call it a "smart business model" to sell interdependent services, but in the long-term it's suicide.
Whether or not you solve this through regulation, that's up to you.
card_zero 19 hours ago [-]
It would be nice if companies could commit suicide faster, instead of dragging it out over several decades.
chadgpt1 16 hours ago [-]
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Humorist2290 11 hours ago [-]
Company offers a service that is considered essential to function in society, and the overwhelming majority of people _must_ pay for as if it were a tax: "this seems like something generally useful to the public! They need to be a regulated utility!"
lyu07282 9 hours ago [-]
If it's basic essential infrastructure and in the absence of high speed rail it is, it shouldn't be a regulated utility it should be nationalized holistically. You have to 1) make sure nobody is profiting of a basic necessity because that will always eventually be unsustainable (profits need to rise always and forever like cancer), 2) holistically because the parts of it that are profitable need to be used to cushion the unprofitable parts (in contrast to privatization where the profitable bits get privatized and the unprofitable bits are subsidized like USPS vs. UPS/FedEx/Amazon)
8 hours ago [-]
threethirtytwo 11 hours ago [-]
Changing it to a utility? Like Bart in sf? We should have Bart authority run the airline!
11 hours ago [-]
hilariously 21 hours ago [-]
Company is valuable to us as a society in a fundamental way but is fucking us up in all sorts of unique ways: They might need to be a regulated utility.
parineum 17 hours ago [-]
Hopefully we can regulate them like California electricity and let one airline be active per airport and let them charge more than triple national rates.
hilariously 10 hours ago [-]
I am not trying to be flip - I am just saying the two sides are not bad regulation ripping us off and bad private companies ripping us off, we can instead do good things and attempt to do them well, we can hold people accountable and have integrity; these are choices we make every day.
themafia 20 hours ago [-]
Okay, but the process of underwriting an airline now somehow involves operating a successful credit card company. Which, you know, are not typically successful based upon operating excellence but upon rapaciousness of interest rates and merchant fees.
I'm not sure it's great to have important infrastructure operated this way. Other than regulation do you see a way out?
sgerenser 12 hours ago [-]
No airline operates a credit card company. They just put their name on a card and sell miles at a discount in bulk to credit card companies like Chase or Citi.
themafia 6 hours ago [-]
Of course they do. Why do you think they get money in return? You don't think that's linked to performance? They just put their name on a card, get a fixed amount of monthly money, and that's enough to let them lead at a loss on airline tickets?
Hacker News has become simple minded. It's embarassing.
jasonmp85 7 hours ago [-]
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the_gipsy 15 hours ago [-]
Bottom line: there never really is any free market. Because it doesn't work.
rapatel0 8 hours ago [-]
Power companies are the classic example. If power companies were forced to compete, their costs + competition tend to drive them out of business. As a result most power companies are forced to operate in really tight constraints with very limited but predictable margin.
I'm not saying that this a better outcome (power companies have their problems too). I was just commenting that this issue parallels the historical solution that was applied to utility companies.
granzymes 8 hours ago [-]
Power companies are a classic example of a natural monopoly because they require a ton of extremely expensive physical infrastructure to connect every house to the grid that would be wasteful to duplicate for every competitor.
The whole point of airplanes is that they require no physical infrastructure between point A and point B.
You can have competing power companies generating the power if the grid is owned by the state (or a regulated monopoly). Coincidentally, that is a good mental model for airlines because airports are often state-owned or if not are highly regulated.
allanca 7 hours ago [-]
I'm starting to come around to seeing airports the same way. Airplanes need "a ton of extremely expensive physical infrastructure to connect every" city to the grid.
That's why the creditors let Spirit die. Their airport slots and gates are more valuable than the rest of the company combined.
rapatel0 8 hours ago [-]
Fair point and I don't disagree. The more meta point I would make is that airlines are still fairly capex heavy (even if there is no point-to-point infrastructure). Each incremental new route operating during standard hours still requires 90m+ on a new airplane.
So if they tend to compete themselves into oblivion, or need to turn into banks to subsidize their product, then it might make sense that they should be regulated monopolies.
Still you're probably right, if they can turn into banks and stay profitable, then maybe that's a better market outcome overall.
gwerbin 9 hours ago [-]
In this case prices are _below_ cost, no?
SecretDreams 12 hours ago [-]
When a necessary service is pushed towards being unprofitable / breakeven due to "free market pressures", it probably should have some kind of backstop to ensure the service doesn't completely fold - because it is necessary. I think the suggestion to treat it like a utility was trying to emphasize this.
I'd also feel similar I'd my primary water, electricity, or internet provider was on the brink of failing due to "free market pressures".
nilamo 11 hours ago [-]
Consumer air travel is not a necessary service, though.
SecretDreams 10 hours ago [-]
How do you feel about high speed internet vs dial up?
forgotaccount3 9 hours ago [-]
Not necessary.
But also, 'Not necessary' doesn't mean 'not worth subsidizing'.
If you think the government finds value in having a connected population with easy access to information then there's value in subsidizing that. Assume the government valued it at $10 a month per person due to increased economic activity made possible from the information flowing, if the market price for it was $60 a month then you have expanded access to anyone who valued it at at least $50 a month.
You can make the same argument for air travel by the way. Why does the government value consumers flying around the country? Why would the government want to encourage people to fly from Charlotte to Florida to go to disney instead of drive to Pidgeon Forge and go to Dollywood? Or fly to NY 3x a year to see grandma for a weekend instead of drive to NY and see grandma for a whole week 1x a year?
sieabahlpark 9 hours ago [-]
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thrance 15 hours ago [-]
If we let the free market do its work, there'd be no airlines. Jet fuel is heavily subsidized, the State injects massive amounts of money into airports and plane manufacturers, etc.
Honestly, with the looming climate crisis, we should probably just let them fail one by one and let alternatives (who can actually be profitable) take off.
carlosjobim 13 hours ago [-]
In a free market, every working citizen could easily afford more expensive airline tickets, since they could keep their entire income with no taxes deducted.
kelnos 12 hours ago [-]
That's a really cute idealized world, but it wouldn't work in practice. The structure of free-market capitalism all but precludes it.
carlosjobim 12 hours ago [-]
The poster I replied to was already in the territory of idealized worlds. You can't just look at one side without looking at the other.
8 hours ago [-]
komali2 10 hours ago [-]
> every working citizen could easily afford more expensive airline tickets
You mean every laboring slave.
No free market means corporations are allowed to engage in slavery, chattel or otherwise. Let's be honest about what a free market actually is. Factory towns, lifetime debt bondage.
carlosjobim 10 hours ago [-]
Ah yes, thank you for correcting me. That is exactly what I meant.
komali2 5 hours ago [-]
I've yet to hear a successful true free market argument of why slavery won't happen, or monopoly.
carlosjobim 2 hours ago [-]
You're certainly right. I haven't thought about it that way before, there's no argument that holds up. Of course.
thrance 8 hours ago [-]
Sure they would. And some noble souls would pave the roads and build schools, act as firefighters... Like they did in Grafton.
Airlines basically were a regulated utility until they were unregulated to the point where normal people can barely fit in a seat and there’s basically no amenities anymore. It used to be kind of nice to fly. That’s laughable now.
eru 18 hours ago [-]
Now you have to option to pay as much as you used to (inflation adjusted) for a ticket, and get first class service with all the leg room you want.
kelnos 12 hours ago [-]
On the other side of that coin, when airlines were heavily regulated, most people couldn't afford to fly at all.
The "regulation vs. no regulation" stance is the wrong way to look at it. Airlines are still regulated, of course. Maybe some of the regulations we do have are unnecessary, some of the regulations we got rid of we should really bring back, and perhaps there are others that we never had that we need.
komali2 10 hours ago [-]
We can't be sure whether cost came down because of removing regulation or improvements in technology. We can only guess.
wallst07 12 hours ago [-]
What other things changed besides regulation?
My guess is MANY more people fly and are able to afford to fly vs before. There are probably many others things that changed.
It's also very nice to fly.... in first class.
striking 21 hours ago [-]
Because the amount anyone would actually pay is substantially below cost for most routes, but it's still a service that many people depend on (either directly or by the indirect economic impact of travel). It's a genuine force multiplier that is unaffordable without being subsidized; making it a utility would just shift the subsidy from credit card points programs to the government.
crazygringo 20 hours ago [-]
> Because the amount anyone would actually pay is substantially below cost for most routes
This is absolutely not true. If all the airlines were prohibited from making money with anything else (miles, credit cards) then airfares would rise across the board and there would still be plenty of demand. Not as much, but still plenty.
appreciatorBus 21 hours ago [-]
If airlines didn’t exist, people and goods would continue to move around the globe as they have done for thousands of years. There’s nothing magical about air travel (or any other transport mode) that makes it worthy of subsidy .
striking 19 hours ago [-]
Listen, I'm the type of fella who'd gladly take the Amtrak from the East Bay to Portland, 18 hours each way, and I'm telling you even I'd do so only as a novelty. If I actually had somewhere to be, spending basically an entire day on a train would be a non-starter. And that's just on the same coast! If I had to take the Amtrak back east to see my family for the holidays I would probably just not go. My travel to the other coast (not to mention back to the country where I was born, an additional ocean's worth of distance) would only be worth the trip for like a life change or a death in the family.
I'm clearly not the only one who thinks so, judging by both Amtrak ridership statistics and the cost ineffective nature of my attempts to travel on it.
appreciatorBus 18 hours ago [-]
I didn’t say anything about trains or Amtrak?
People and goods have travelled around the world long for thousands of years before air air travel and train travel. And people have made decisions above the trade-offs of travel to see family for thousands of years before air travel and train travel.
If air travel was unavailable or unsubsidized, people would continue to make those decisions and life would go on.
kelnos 13 hours ago [-]
> People and goods have travelled around the world long for thousands of years before air air travel and train travel.
Yes, and it really, really sucked back then. And the number of people who could actually do that travel was much, much smaller than today. Air travel (and train travel, to some extent, though it mostly sucks in the US) has enabled people to travel around the globe who never would have been able to in the past.
What a bizarre argument.
vel0city 6 hours ago [-]
I'd like to see a revival of trains in the US, but I agree their impacts will be limited. I think they make sense for regional travel (Texas triangle, New England area, West coast, Midwest, maybe NM/Colorado/South Wyoming, etc.) Hopping between these regions seem like planes are the obvious choice. The distances are just so high, with often very limited regional centers connecting them in between.
I'd love to take some HSR to Austin or Houston or San Antonio from DFW, but I just can't imagine the network to make a train work competitively to get from DFW to NYC or LAX.
hakunin 21 hours ago [-]
When something is that drastically different, it becomes different in kind. For example, if you have high network latency, you cannot jam (play live music) with friends remotely. If you have low latency, you can. Just because the difference is in a single value (I.e. net speed) doesn’t mean it doesn’t change the fundamental nature of what’s possible. Air travel makes the kind of business, shipping, and attendance possible that wouldn’t have been possible otherwise, because our collective lifetimes and risk tolerances are limited.
rendaw 16 hours ago [-]
I think you're saying that there are businesses that rely on cheap air transportation that are very valuable, but at the same time couldn't afford higher air fees.
But that's a contradiction. If they are valuable, their customers would pay more for their services - that's the definition of valuable. And if their customers would pay more, they could afford higher air fees.
hakunin 11 hours ago [-]
No, all I’m saying is that air travel is so different than any other kind of travel, that it is very special, and borderline magical. Saying something like “nothing magical about air travel, things and people would still travel around the globe” is very reductive. I’m not giving my opinion on subsidies.
jodrellblank 8 hours ago [-]
How are you not giving an opinion on subsidies?
Person 1. "Airline service is more valuable than people will pay for, it's a genuine force multiplier that is unaffordable without being subsidized"
Person 2. "Airlines are not magical, people and goods will move another way, so it doesn't need subsidy".
You: "Airlines are magical. Those things cannot happen another way."
There's three conclusions for what you think: 1) that airlines are special and magical and doing something which cannot be done another way, but that has no value and airlines can go away. That's incoherent. 2) Airlines are both affordable and profitable. That doesn't seem to be true and needs some supporting. 3) Airlines are doing something uniquely 'magically' valuable, they are not profitable, then they need subsidising.
eru 18 hours ago [-]
That doesn't mean we should subsidise it.
hakunin 17 hours ago [-]
I’m responding to a claim that there’s nothing “magical” about air travel. It literally enables things otherwise impossible.
kelnos 13 hours ago [-]
There absolutely is something magical about air travel! We can get places much faster and much safer than we could before. I live in California, and another part of my family lives in Maryland. Are you saying that when I want to visit my family, instead of spending 5-6 hours in a metal tube in the air, I should spend a week (or more) either driving or taking various trains and buses?
If air travel didn't exist, I likely wouldn't move around the globe at all. Hell, I wouldn't move around the country even.
In the US, roads are mostly publicly-owned (the ultimate subsidy). Local bus and rail transit is usually also publicly-owned, though when it isn't, it's done through public-private partnership and/or subsidy. Regional and long-distance rail is subsidized. Why shouldn't air travel follow the pattern?
freedomben 11 hours ago [-]
> people and goods would continue to move around the globe as they have done for thousands of years.
Indeed! We don't need air travel when we have perfectly good teams of oxen and covered wagons. We could even hunt and forage for our food along the way to save some money!
devsda 20 hours ago [-]
You can't think of a single situation where an airline route is infinitely better and probably the only viable option ?
Btw you don't need to completely disregard other modes of transport to appreciate bus :)
appreciatorBus 18 hours ago [-]
Buses and planes are both great! Both have advantages and disadvantages, and different cost structures. I trust people to make their own decisions about trade-offs for travel that work for them and their situation. When we arbitrarily pick one and shovel free money, land or infrastructure toward it, we are putting a thumb on the scale and depriving people of the power to make their own decisions.
Of course, we can argue that there are network effects or natural monopoly effects for fixed infrastructure like roads and rails, and thus there must be a public role. However policy rarely seems to remain at this reasonable position and instead quickly expands into something altogether different.
kelnos 12 hours ago [-]
> When we arbitrarily pick one
Aren't all modes of transportation in the US either subsidized or public-owned to some degree? We haven't arbitrarily picked one; we picked them all.
Air travel is maybe the least subsidized, though? Essential Air Service is probably the main thing? Long-distance bus like Greyhound is only minimally subsidized too.
But local transit (bus & rail), and regional and long-distance rail are all subsidized or publicly owned in the US. Most roads are publicly-owned, either locally or by the federal government. Long-distance bus and rail are actually unusual in how little they're subsidized.
appreciatorBus 9 hours ago [-]
You forgot that private cars are also creatures of subsidy. We like to think that the main input to go vroom vroom in cars is cheap gasoline, but IMO it’s realy cheap land. (aka subsidized public land)
A car with no gas could still be used to store stuff, or even roll downhill. A car with no land can’t be used at all for anything. And the amount of land required increases with the square of the velocity you want to travel out. But we never add that in.
As far as air travel, I haven’t done the math, but I suspect if you were to add up just the foregone property tax revenue associated with the land underneath the airports you’d end up with some pretty serious numbers.
Anyways, my basic point all of this is the same – we should be careful about subsidies because they tend to distort incentives and decision-making, whether we apply them to airplanes or horse buggies. It doesn’t mean that there’s no place for government involvement in transport, simply that we ought to be wise to the side effects and externalities. I could buy that the government should be involved in air travel, but I part ways with the idea that this should be extended such that if people get used cheap fares on Spirit then the government should guarantee Spirit operation forever. Maybe Spirit was just an anomaly, and we’ll be fine when it’s gone? Some people might fly a little less, some people will just eat the difference and not care, some people will take the bus, some people will buy a car. It’s all just normal people making normal trade-offs about decisions in their life.
eru 18 hours ago [-]
If they are so much better, why do they need subsidies?
folkrav 12 hours ago [-]
This line of thinking assumes being profitable is the only thing that makes something desirable or not.
victorbjorklund 17 hours ago [-]
Which transportation mode gets no direct or indirect subsides?
eru 15 hours ago [-]
Net or gross?
1shooner 20 hours ago [-]
Do you oppose the federal highway system (or rail systems) as well?
appreciatorBus 18 hours ago [-]
Basically yes.
eru 18 hours ago [-]
I guess at least when they are given away for free or severely underpriced to the user.
kelnos 12 hours ago [-]
Right, the externalities of those road systems aren't really paid for properly, by anyone.
But that's hard to do, because for many people/uses, they have to use those roads to get done what they need to do. The alternatives (like high speed rail) just largely don't exist in the US, or are painfully sub-par.
kelnos 12 hours ago [-]
Ah, you're one of those people who think we shouldn't have nice things. Got it.
(And no, the market often does not provide.)
carlosjobim 13 hours ago [-]
Not advocating for subsidies, but there are things like patient transports to hospitals, where speed is a factor.
thrance 8 hours ago [-]
Just build hospitals closer to people. Or make people move closer to them. If it wasn't possible to fly to the hospital, people would just not live so far from them.
> There’s nothing magical about air travel (or any other transport mode)
There kind of is. I can make it from here in Bucharest to Paris in about 3 hours by plane, while by car I'll need about 3 days (i.e. two sleepovers till I get there). This is magical to me. To say nothing of places like the Arabian peninsula or, I don't know, the Indian subcontinent, I wouldn't even think of getting there by car as it is close to impossible (at least when it comes to a land-route to India), but taking a plane is a 6-hour flight from nearby Istanbul to Delhi.
komali2 10 hours ago [-]
> people and goods would continue to move around the globe as they have done for thousands of years.
Would love to compare the economic throughput in raw dollars of the Oregon trail vs a single flight route.
Don't forget that the whole point of transportation under capitalism is enabling and stimulating economic activity. So sure, get rid of the airlines if you want to collapse a bunch of economic activity. Personally I'd hope for it to get replaced by high speed rail, but kinda hard to do that when economic activity is highly depressed.
ajross 20 hours ago [-]
> the amount anyone would actually pay is [...]
That's.... like a pretty shocking erasure of the idea of a demand curve given the forum here.
To be glib: no, that's not how it works. Increase the price and fewer people will fly, but the demand won't drop to zero. Decrease it and you make less money per ticket but the size of the market is bigger. At some point there is a local maximum, to which the market seeks.
But conditions change occasionally and the equivalent supply curve is moving rapidly because of the oil shock (i.e. it's more expensive to put planes in the air to service tickets you already sold). And things like the mess with Spirit are what happens when the market readjusts: the rest of the industry will (probably) backfill some of the lost capacity, but not all of it, and prices will (probably) rise a bit to a new equilibrium.
forgotaccount3 9 hours ago [-]
> indirect economic impact of travel
Like what?
Nearly all 'goods' are going to travel more efficiently by rail and truck. And I say nearly all to cover the outliers like maybe an organ flying across country for transplant.
So if it's not the distribution method of choice for goods, then leisure? It's probably a global positive if people fly less. People will end up going to more local vacation destinations instead of aggregating all of those resources into a few popular locations that end up being massively overcrowded. This in turn reduces carbon impact because driving 3 hours is significantly less impactful than flying for 3 hours.
If you are just talking about all of the labor that has built up to support this inefficient and wasteful enterprise, that's probably for the best to reallocate that labor elsewhere. It will happen eventually, unless you think cheap oil is a permamenent feature, so why not happen sooner than later?
pc86 9 hours ago [-]
> Why does any of this imply they should become a regulated utility?
Because the majority of the HN crowd defaults to "a massive government bureaucracy would do this better" unless it's even tangentially related to their industry in which case it's "regulations bad" and "move fast break things."
rapatel0 8 hours ago [-]
I'm definitely not this type of person. see other comment
miki123211 14 hours ago [-]
This is like saying that movie theaters make money on popcorn, so they should just start selling popcorn and exit the movie business entirely. The reason those loyalty programs work is because of the flights.
I read it more as "you buy an airline because you want to run an airline, but what you actually end up running is primarily a credit card company." That doesn't mean you stop doing flights, it just means that the part you want to do is the part that loses your company money.
This sort of thing all the time when (for example) a movie lover opens a movie theater. Running a profitable movie theater is a lot less about movies and a lot more about maximizing concession revenue.
an0malous 7 hours ago [-]
The point still stands that a dependency on creating a profitable airline company is a credit card company
bdunks 6 hours ago [-]
This is a common narrative that simply isn’t true.
American Airlines has the largest loyalty program.
In last week’s report to shareholders they project it will grow to $1.5B in pre tax revenue, against a total 2025 pre tax revenue of $54bn (50bn passenger revenue).
The core business of airlines is still airlines. Optimizing TRASM & CASM, with tremendous effort on upsell and cross sell of premium services (seats, bags, food), at every point in the passenger flow.
tylervigen 6 hours ago [-]
It can both be true that (1) most of the revenue and operations focus is on the core airline and (2) most of the profit and valuation is driven by the loyalty program.
profit != revenue. Airlines have thin margins and the argument is that they're getting most of their profit from the financial side of things. This is the end state of any endeavor in capitalism: up the value chain there's always the business of trading imaginary units.
boppo1 6 hours ago [-]
Can you elaborate on your claim about capitalism and all activities being about trading imaginary units? My uni gave me a degree in finance & I can still basically explain CAPM off the top of my head, but I'm unfamiliar with this aspect. Always interested in expanding my understanding.
hnav 6 hours ago [-]
I guess a better characterization is that it's more profitable to be in a meta-business than what's stated on the label. The original business is a almost a foot in the door and the money is all in value adds, ancillaries and side quests.
McDonalds -> leasing land to franchisees. Private equity -> saddling existing business with debt while chopping them up for parts. Stock markets -> pump and dumps. Selling anything -> rewards programs and branded CCs. Car dealerships -> captive audience for servicing. Owning real estate with the goal of leasing it out -> speculation on its value.
abustamam 6 hours ago [-]
I know this is a bit tongue in cheek but I think they're referring to dollars being made uo, which is true, to the extent that anything else is made up.
But just because it is made up doesn't mean it isn't real.
cromka 17 hours ago [-]
And then you have RyanAir in Europe with no credit card or loyalty program offerings. They did have a loyalty subscription program, but it cost more than it generated.
Best not to generalize.
rapatel0 7 hours ago [-]
When I lived in europe, RyanAir made most of it's money in the terminal. This is why every RyanAir terminal has a maze like exit from security (ikea-esque) before you get to the actual terminal.
The point stands, airlines don't make money on flights. Flights are loss leaders.
notahacker 12 hours ago [-]
tbf, Ryanair generates a third of its revenues from other ancillary offerings (including kickbacks from insurers and car hire firms as well as its legendary fines and fees) so it does fit the general pattern of it being unprofitable to simply sell tickets in competitive markets...
wolvoleo 10 hours ago [-]
Those other companies do too So it's not distorting the competition IMO. If none of them had kickbacks then the prices would be overall higher but people would still fly because most of us don't just fly for the hell of it but because we have places to go.
notahacker 10 hours ago [-]
Nobody claimed it was distorting the competition.
I pointed out the simple fact that Ryanair can't be considered a counterexample to airlines tending not to make money on flights since it relies on upsells to make a profit.
fundatus 14 hours ago [-]
And Ryanair is the largest airline in Europe! And one of the largest in the world.
tim333 7 hours ago [-]
And it got that way mostly be focusing on cheap flights rather than other nonsense.
chadgpt1 16 hours ago [-]
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nunez 19 hours ago [-]
They make a lot of money from loyalty programs and credit cards, but the legacy airlines do make money on flying alone. The margin they make on that is razor thin, but they do make money from the core product.
Spirit was designed to be ultra low cost, which attracts flyers that are much more price sensitive. Higher Jet A costs means higher ticket prices, which means lost customers, which means lost revenue. Pulling a JetBlue and adding higher tier product offerings to attract the business travelers that _actually_ makes money for airlines would've required an overhaul of their entire business, which they couldn't afford to do.
I agree that Spirit will be chopped up by whoever buys them. It happened to Braniff, PanAm, and a whole bunch of other airlines that weren't thrown a lifeline.
(JetBlue tried to acquire Spirit to prevent this outcome, but the acquisition didn't pass antitrust. Everyone knew that that acquisiton failing was a death sentence to Spirit, but it was what it was.)
eru 18 hours ago [-]
> I agree that Spirit will be chopped up by whoever buys them. It happened to Braniff, PanAm, and a whole bunch of other airlines that weren't thrown a lifeline.
But that's not necessarily a bad thing. If the company is worth more to the market and society when sold as pieces, so be it.
gtowey 22 hours ago [-]
Or they could actually charge ticket prices that cover the cost of doing business and stop treating their passengers like a it's a time-share sales pitch the whole way.
tomhow 22 hours ago [-]
They can't do this most of the time because for most of the year on most routes, supply outstrips demand (i.e., many/most flights on most airlines fly at least a little bit empty, often significantly empty – overall load factors are about 80-85%). They have to charge fares that customers will be willing to pay, even if that means losing money on a given flight. They can only charge profitable fares on the routes and times of year when demand surges (peak routes, holiday periods, major events). They have to keep their network capacity high enough to satisfy the peak demand, but for most of the year and most of the network, demand is lower, so they have to settle for break-even or loss-minimization. (For the record, I co-founded a flight search startup that became a fare optimization platform.)
dannyw 21 hours ago [-]
Was that Flightfox? If so, I loved using it, helped me save so much money but also time :)
It sounds like there’s a problem with having too many flights that are barely full and hence unprofitable. AFAIK the federal gov spends significant money subsidising many “small airport” routes even if they’re barely used.
bobthepanda 8 hours ago [-]
That’s just the nature of the beast. Airlines have to align large capital intensive assets with fluctuating passenger demand and fuel prices. And at congested airports the slots are also expensive assets that get auctioned off, and operate on a use it or lose it basis.
Spirit and the other LCC’s problem is that the legacy airlines are now offering a similar product in their basic economy that has less hassle, higher frequency, is sometimes eligible for earnings on their massive loyalty programs, etc.
Karrot_Kream 17 hours ago [-]
The EAS Program (Essential Air Services) is the US Government program which subsidizes routes to small communities of you're curious.
chadgpt1 16 hours ago [-]
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hedora 20 hours ago [-]
Southwest used to do this, but then somehow got a CEO that burnt it all down instead of raising ticket prices by $20-30.
Before them Alaska Air was similar, and is now similarly bad.
Having the customers actually own the airline seems like a reasonable approach. The trick is kicking all the assholes off the board, so they can’t fire leadership for treating customers decently while turning a sustainable profit.
I can't fathom how this airline was allowed to keep existing.
acheron 22 hours ago [-]
Sounds like a good way to lose all your customers to the other airlines that charge less.
AlexandrB 20 hours ago [-]
Yup, and this is exacerbated by how services like Google Flights work. There's little visibility into any kind of "quality" metric, but prices are always front and center. So why would you optimize based on anything else?
asvitkine 20 hours ago [-]
If the lowest prices cause insolvency for the company, then let your competitors go bankrupt to win in the long run?
iSnow 15 hours ago [-]
I guess some of the legacy carriers are now drinking champagne since they got rid of one of the more aggressive ULCC competitors.
However, if you wait till your competition goes broke, you need to ensure you survive long enough and stay big enough so you don't get bought. That's not exactly easy.
stackskipton 22 hours ago [-]
Consumers only look at bottom line. There is basically two markets with airlines, higher end market with credit cards and premium seating; lower end where consumer solely looks at ticket price.
kulahan 21 hours ago [-]
A huge number of businesses survive on whales, it's becoming really apparent. I'm kinda surprised how common it is.
I wonder if this will be the next "market" to exploit if ad revenue ever dies down too much, or if it's one that's always been there, and I've simply never been a part of.
cybercatgurrl 16 hours ago [-]
this is a direct result of the shrinking middle class and the greater concentration of wealth. this is the canary in the coal mine
lotsofpulp 22 hours ago [-]
They do, it’s just barely enough to cover the cost of doing business and volatility.
gordon_freeman 22 hours ago [-]
> "Flights don't make money. Airlines actually make all of their money through loyalty programs and credit card payments."
If that's the case then how RyanAir survived and is thriving?
ggm 21 hours ago [-]
It isn't the case. It's a simplistic gloss on a complex finance outcome.
Some flights make money.
Some flights lose money.
Some finance structures make money while looking like losses to acrue tax benefits for other activities.
Sometimes the money is being made by holding companies not operating companies. Sometimes the assets are worth more as spares than operating.
All companies are complex. I do not think "flights don't make money" is true for all airlines, all flights.
bombcar 21 hours ago [-]
Because people take "airline X makes $50k profit, and makes $55k off of the credit card, so therefore it makes all money from credit cards" which is true from a certain accounting point of view, and also entirely false, in that it's all accounting tricks and the credit card would be worthless without an airline.
wolvoleo 10 hours ago [-]
Credit cards aren't really a thing in Europe and even where people might have them they don't make money. There's no kickback schemes, cashback etc.
Not to mention that loyalty programs and credit card bonuses don't exist in Europe.
Petersipoi 19 hours ago [-]
This isn't true. European airlines do have loyalty programs with "miles".
Air France, British Airways, Finnair, Turkish Airlines, just to name a few, all have miles programs.
They just aren't tied to credit cards because the EU caps interchange fees to 0.3%, so there simply isn't enough money to have a meaningful credit card point system.
Yeah and it was an absurdly expensive activity limited to rich people
jollyllama 10 hours ago [-]
You say that, but flying economy was much better back then. Less fights, more legroom. You've got to fly business today to get close.
tt24 8 hours ago [-]
Yeah and economy class was absurdly expensive and limited to rich people
jollyllama 7 hours ago [-]
I'd contend that inflation adjusted, the average flyer won out.
SpicyLemonZest 9 hours ago [-]
It was better because the Civil Aeronautics Board did not allow price competition, so the cost of economy tickets was much too high, on some routes reaching the inflation-adjusted level of business class tickets today.
9 hours ago [-]
bsder 17 hours ago [-]
And most families only had a single car prior to 1980.
What's your point?
Did airlines get cheaper due to deregulation or because technology and engineering made operating them cheaper?
tt24 8 hours ago [-]
Probably mostly deregulation and a little bit the latter
9 hours ago [-]
SecretDreams 12 hours ago [-]
Or as simple as incomes crept up and airlines reduced some amenities - both allowing for increased ridership which helped to reduce per head costs.
victorbjorklund 17 hours ago [-]
Was it cheaper or more expensive for the public to fly on them during that time or after deregulation?
hedora 20 hours ago [-]
As I understand it, everything about the industry was better back then too.
Case in point: Old Perry Mason shows where characters regularly drive to the airport, pay for a ticket and get on a plane. Flying was actually faster than driving back then, even when measured by time between deciding to leave and arriving at destination!
(Yes, tickets used to cost a bit more. Whatever. Figure in the price for camping in the airport for 4-5 hours, and then tell me the current system is cheaper!)
missedthecue 19 hours ago [-]
"Yes, tickets used to cost a bit more"
Tickets used to cost 4-8x what they cost now, depending on route. It wasn't a couple percent extra. A lot of what made flying seem like such a glamorous activity was that everyone but the upper classes was excluded.
An economy class round trip from the US to Japan in the 1970s with Pan-Am was $8,900 in 2026 dollars. About $15,000 if you flew first class.
Conan_Kudo 19 hours ago [-]
And for comparison, today you can do an economy round-trip flight with Delta Air Lines for roughly $1.6k (SEA-HND). A Delta One flight is roughly $8.5k. That's the apples-to-apples comparison.
Deregulation also allowed international carriers to sell to us too. An ANA round-trip on economy class is a couple hundred dollars cheaper. Their business class is similarly cheaper than Delta One.
Air travel is so much cheaper than it was back then that it is affordable for most people to take one international trip a year if they really want to. Even to exotic places in Asia or Southern Europe.
tt24 19 hours ago [-]
It would be prohibitively expensive for poor people to fly. I understand why you wouldn’t care about that, but some people are poor and still need to fly if you can believe it.
chadgpt1 16 hours ago [-]
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whazor 21 hours ago [-]
Both Southwest, but also Ryanair are profitable. Totally possible to make money off flights.
But you have to follow the same model: use cheaper airports, a single modern aircraft type to simplify operations, high turnaround speed, charge a lot for extras.
oceanplexian 20 hours ago [-]
It’s not enough to “make a profit”.
Southwest has 30B in assets and makes $441M in profit. Like most airlines it’s a miracle of modern economics and should practically be considered a charity or a nonprofit. You would make more in treasuries or corporate bonds.
HWR_14 19 hours ago [-]
Their last earnings report says about 17B in non-cash assets with about 848M in profit based on those assets (assuming that the quarterly profit x 4 is a reasonable assumption). So where are your numbers from?
rhplus 19 hours ago [-]
Wow… at 1.5% annual return wouldn’t they be better off just renting those assets (aircraft) to other airlines?!
sithadmin 10 hours ago [-]
The majority of airliners are on 'dry lease' to their respective airlines to begin with.
Finnucane 20 hours ago [-]
Corporate bonds won't take you to Disneyland.
missedthecue 19 hours ago [-]
Ryanair moves the most passengers of any airline in the world and doesn't have any cobranded credit cards or loyalty program.
rhplus 19 hours ago [-]
Ryanair is 3rd by passengers and 7th by passenger miles, according to this wiki page.
Obviously their model is different to the big American carriers. Perhaps there’s something about the homogeneity of the US domestic market compared to the EU market that favors loyalty based airlines versus budget airlines.
childintime 18 hours ago [-]
The comments here seem to suggest that the loyalty program funded with credit card margins are to blame for the difference.
It suggests we'd be better of eliminating the absurdly high hidden taxes paid to the credit card companies, that in turn act to gamify the business. In the end they raise the cost of doing business, for virtually no benefit at all. It's a monopoly extracting as much wealth they can get away with.
The question at the heart of this: How can "the shining light on a hill" be so stupid? It's digging its own demise.
wolvoleo 10 hours ago [-]
I kinda doubt that. Ryanair make money and they don't have a loyalty program and companies in Europe don't make money off credit cards.
rockostrich 8 hours ago [-]
Low cost carriers are almost an entirely different industry than traditional airlines. For example, Frontier has a loyalty program as well as their "Go Wild" pass which is essentially "Movie Pass" for flying domestically in the US, but that operates as a loss leader for ancillaries, where they make most of their money (around $70 per passenger). As others have mentioned, RyanAir also has a loyalty program that they lose money on.
Traditional airlines are very much like Starbucks nowadays in that they are essentially banks, but low cost carriers are closer to movie theaters where they essentially make nothing selling the actual seat so the more people they get in the door, the more they can make on ancillaries.
JumpCrisscross 20 hours ago [-]
> Flights don't make money
Member-owned co-ops don't need to make money. Structuring an airline as a member-owned co-op is not a fundamentally-stupid idea.
evanjrowley 9 hours ago [-]
>Airlines actually make all of their money through loyalty programs and credit card payments.
Spirit has been doing this since it's inception. The collapse of their business can't be through lack of this alone.
eru 18 hours ago [-]
> Fundamental problem: Flights don't make money. Airlines actually make all of their money through loyalty programs and credit card payments. They basically should have turned into regulated utilities long ago, but loyalty program revenue saved them.
I don't get it. Why should they have been turned into utilities? Just because the current iteration loses money?
Please be aware that airline pricing is endogenous. That means, it's not set from the outside, but a reaction to market conditions and feeds back into market conditions. Eg airlines might be on the edge of profitability at time X, but when at time Y fuel prices drop a bit (or rise a bit) that doesn't mean that airline will suddenly all make lots of money (or all go bankrupt): the pricing of their product will adjust.
That doesn't only go for fuel prices, but also for loyalty programme revenue. If such revenue is available and competition is fierce, then prices will go down until airline can just about stay afloat after taking that extra revenue into account.
> Private equity will likely sell the company for parts.
You say that like it's a bad thing.
fooker 8 hours ago [-]
> turned into regulated utilities
Regulation won't magically save low margin businesses.
Nationalizing might, but then you make it difficult to compete for others. And of course, there's plenty of precedence of nationalized airlines failing catastrophically and having to be sold off to private or foreign entities to keep functioning.
rtpg 21 hours ago [-]
If airlines stopped offering flights then their loyalty programs would not be useful.
Even in this "airlines as point program companies" view of the world, flights don't make money in the same way that electricity going into data centers don't make money. It's a place where you have major costs and you want to try and gamify it, but at the end of the day it's pretty necessary for successful operations!
Consider why airline points even work as a model in the first place! Airlines have blackout dates and don't offer every seat in a plane for points because _they can make money selling a seat for more than what the points are worth to them_.
skinfaxi 10 hours ago [-]
> Fundamental problem: Flights don't make money. Airlines actually make all of their money through loyalty programs and credit card payments. They basically should have turned into regulated utilities long ago, but loyalty program revenue saved them.
Enough money for who? One person has a pay package north of $30 million.
cuuupid 22 hours ago [-]
The company is not forced to sell immediately to whoever offers it money, they can sell themselves off for parts.
I heavily doubt PE firms are interested here as there is no potential for growth or a multiple. Spirit's assets are mainly their fleet, there are like 4 maybe 5 people who could buy, of these 2-3 are facing similar financial crises.
In the US I think nobody except United can afford to make a move, more likely some Asian airlines will move; many have grown and have route demand they can't service due to lack of aircraft. If you fly to Asia often you'll note that much of the time Asian airlines have to operate an aircraft from a US airline.
selectodude 21 hours ago [-]
Spirit's assets are almost entirely their slots at ORD, EWR, LAX and LGA. They don't many of their planes.
cuuupid 4 hours ago [-]
I hear this a lot but their fleet is valued upwards of a billion, they own most of their fleet it was just financed with debt (it's not like a house where the bank has equity in the asset, the lender has debt with spirit and levers on that debt that control what it converts to on default but Spirit legally owns the planes). The slots are <100M total
victorbjorklund 17 hours ago [-]
Huh? What do you mean? They and Wizz air are public companies. Nothing would stop them from selling their planes etc.
Eric_WVGG 8 hours ago [-]
Doesn’t have to be a profit-making venture though, just needs to cover the cost of flights — which are not money losers.
If they can build a model similar to REI, count me in.
Animats 20 hours ago [-]
> They basically should have turned into regulated utilities long ago
They used to be. Read up on "Civil Aeronautics Board".
aninteger 21 hours ago [-]
Famous Richard Branson quote:
"If you want to be a millionaire, start with a billion dollars and launch a new airline."
Does this imply that most people who sign up for frequent flier programs end up losing money in the long run, rather than benefitting from them?
kqr2 18 hours ago [-]
They can probably make money on business class travelers who spend their companies money on flights which aren't necessarily the cheapest but can reap the rewards for their own personal benefit.
dzonga 10 hours ago [-]
some do - see RyanAir in Europe.
yeah in the US airlines are fintechs.
tristor 8 hours ago [-]
> Unless this initiative will turn into a credit card company (which nobody likes or wants to do) it won't go anywhere
There's another more fundamental problem with airlines like Spirit, which is they can't effectively make this change. Loyalty programs / credit card tiers require differentiated service. This is one of the drivers for why Southwest changed their entire seating model to match the other big players in the industry even though their Ops data showed faster boarding times using unassigned seating.
When you're on the lower tier of the market like Southwest and other budget airlines, creating differentiated service mostly means making things worse for most passengers, not better, in order to have loyalty programs provide a pathway to avoid the suck.
MagicMoonlight 14 hours ago [-]
Bullshit. Very few airlines even have points systems.
wat10000 22 hours ago [-]
Sounds like the industry is extremely efficient. Why would we want to turn this into regulated utilities?
ajkjk 22 hours ago [-]
sounds like it's not efficient at all? it's barely functional as a business and is only surviving on grifty addons?
avarun 21 hours ago [-]
This is a textbook case of competition pushing profits down to 0. That's an ideal case scenario. Why would you want to change this?
thesuitonym 9 hours ago [-]
Maybe they would have been more profitable if they weren't funneling $1 million every year into their CEO's pocket?
wat10000 8 hours ago [-]
They were losing hundreds of millions of dollars a year.
chadgpt1 16 hours ago [-]
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emmelaich 20 hours ago [-]
"Perfect efficiency comes at the point of collapse"
Don't know where I read that, but it seems apropos.
victorbjorklund 17 hours ago [-]
It’s perfectly competitive. There is no rent seeking on the core.
tt24 19 hours ago [-]
Good? It’s dirt cheap
wat10000 12 hours ago [-]
It’s highly functional. It’s barely profitable. That’s good for the customers.
lazyasciiart 22 hours ago [-]
Because efficiency is not the end goal of life.
victorbjorklund 17 hours ago [-]
So the end goal is making poor people pay more for the flights home on holidays so that the investors can have higher returns?
wat10000 12 hours ago [-]
How about transportation?
tencentshill 10 hours ago [-]
They could pay Trump to gid rid of some of the more costly FAA regulations. Do you know how much it costs to train a pilot these days? We have this little thing called autopilot now! Put Musk on the job, he'll straighten out those crybabies and their "safety first" ethos.
exabrial 21 hours ago [-]
Sadly only expensive because the unions bleed the companies dry.
jodrellblank 7 hours ago [-]
When CEOs and shareholders take all the money out of a company while doing none of the work, you think it's fine. When workers do the work and get the money, you think it's "bleeding the company dry".
Unions are one of the more effective ways for workers to fight back against "divide and conquer". Unions work to slightly adress the massive power imbalance between employer and employee; that's why the wealthy hate them and spread negative propaganda about them.
victorbjorklund 17 hours ago [-]
Not really true. If over night all salaries in all airlines would drop by say 20% overnight. Then yes, they would make a lot of money very shorterm. But then same thing would happen. Competition where they all would lower prices towards where they again have the same margins.
exabrial 10 hours ago [-]
Lol.
Be sure to actually go read the read the contracts and what they contain.
Nican 22 hours ago [-]
I remember reading about how the major airlines now are more of a "bank that happens to have planes," due to the loyalty programs being worth significantly more than the airline. Delta Air Lines earned $8.2 billion from American Express in 2025, surpassing ticket sales revenue. [1]
I primarily use my favorite's airlines credit card because it gives me perks such as priority seating, and free checked bags. I am pretty certain that the credit card fees (that is passed on to the merchant) does not come close to the value that I gain for my credit card loyalty. It is a stupid game that I am forced to play, because the credit cards also provide other benefits, such as fraud protection.
I am wondering right now if "Spirit Air 2.0" even has a fighting chance if they are not able to subsidize operating costs by also being a credit card company.
>Delta Air Lines earned $8.2 billion from American Express in 2025, surpassing ticket sales revenue.
Just to be clear, that isn't what the article says. It says more than what "most" airlines generate in ticket sales. Not Delta, or any major US carrier. As interesting as that sounds, it couldn't logically make sense and it only represents about 15% of Delta's revenue. It's not even a straightforward revenue stream, it works for profitability because they are able to book most of the revenue immediately and able to mark down the future expense because of how loyalty rewards are obligated.
doctorpangloss 8 hours ago [-]
Yes, but how does stating the obvious - that airlines make almost all their money from flying planes, and that different lenses of the loyalty program's intrinsic value is accounting parlor tricks, and that the main reason they like the credit cards is because it drives people to fly with their loyal choice more - how does that drive more listeners to your podcast? Checkmate, reasonable guy.
carlivar 20 hours ago [-]
This isn't really a bad thing. Any company that monetizes credit cards can only do so because of their real, core product. They aren't really just banks like people claim. If they didn't fly people places reliably the whole thing collapses.
It's really just a surprising morph of their economic model in the post regulation era.
fluffyllemon 21 hours ago [-]
> It is a stupid game that I am forced to play
You are not forced to play it. That is a just story you tell yourself. You can make a different choice.
oezi 17 hours ago [-]
All loyalty programs are stupid. People waste their time on 1-2% savings. It is insane.
dml2135 10 hours ago [-]
2% savings on all of your consumer spending isn't insignificant, when compounded over time.
fluffyllemon 2 hours ago [-]
Many studies show that consumers spend more when using credit cards, compared to both cash and debit cards, and it's not obvious to me that the 2% will win out.
array_key_first 1 hours ago [-]
In the case of air travel where you're, presumably, going to travel either way, I think it can work out. But it only works out if you travel A LOT. Even a moderate amount of travel means you don't win out with the cost of membership.
yolovoe 17 hours ago [-]
That's one free round trip international flight per year in a lot of cases. Plus sometimes other benefits like theft insurance, warranty extension, phone insurance, etc.
You're subsidizing everyone else if you're not trying to get the best loyalty program.
anematode 15 hours ago [-]
> You're subsidizing everyone else if you're not trying to get the best loyalty program.
Quite the mentality...
datsci_est_2015 10 hours ago [-]
Welcome to capitalism. Do you refuse to buy items on sale at the grocery store because they are subsidized by the more premium items? Do you refuse to buy the rotisserie chicken because it’s a loss-leader priced to get you into the door?
You’re taking a 2%+ loss on every purchase if you’re not playing the game. But you better carry debit cards and cash because some vendors charge extra for credit cards, and some charge extra for using cards at all!
anematode 8 hours ago [-]
Quite the mentality...
risfriend 9 hours ago [-]
> how the major airlines now are more of a "bank that happens to have planes"
> I primarily use my favorite's airlines credit card because it gives me perks such as priority seating, and free checked bags.
That's a reason to have an airline credit card, it's not a reason to use it (other than for purchasing that airline's tickets)
RotaryJihad 10 hours ago [-]
This sort of reminds me of a gas station that only sold gas at the pump. No convenience store, no smokes, no snacks, no cokes. I think it was Swifty? I know it was yellow signage.
Anyway, point is they failed and went under and my recollection is that just selling gasoline alone was not profitable. The extra coin comes from selling snacks, beer, smokes, etc.
onefiftymike 6 hours ago [-]
I used to work for a company with about 1200 gas station/convenience stores. They tracked "Light product break even". Basically the profit to earn on fuel to make the store break even. It was like 2 cents per gallon most of the time. So they could be super competitive on fuel and still be profitable. It was pretty crazy to see that.
And it was Swifty - definitely a no frills experiences!
the_red_mist 7 hours ago [-]
re: "bank that happens to have planes"
this isn't unique to airlines. this applies to all exceptionally mature companies/industries who believe there is no more room for growth. any significant profit they make gets paid out as dividends to investors who then put the money elsewhere instead of reinvesting into the company
_jackdk_ 19 hours ago [-]
> I am pretty certain that the credit card fees (that is passed on to the merchant) does not come close to the value that I gain for my credit card loyalty.
Generally it's the interchange fees that fund reward programs (charged between banks), not the merchant fee.
It generally depends on the contract the merchant has with payment provider:
- some have relatively high merchant fees to cover for interchange fees
- others (generally called IC+) have the merchant pay the IC fee plus some other (generally much smaller) fee to the payment provider
In both cases it's the merchant that ends up paying them. It's not a concidence that in Europe (where there are caps to IC fees) the fees that merchants pay are generally lower.
bullan 20 hours ago [-]
This loyalty program is the business is oversold imo, done to death by every content creator. It's the data, the data blah blah
The $8.2billion from American express pays basically is buying tickets and ticket extra, it buys them some points, lets ignore multiples for now, it buys them 8.2billion points, which they give to customers which then buys tickets.
If Spirit accepts USDC instead it wouldn't be that much different.
notepad0x90 23 hours ago [-]
I could easily afford any of their competitors but I always picked Spirit airlines. The pricing makes sense, pay more if you need more things. I liked Spirit because it was more akin to riding the bus, I got treated well every time by their staff and the experience was fairly consistent.
Other airlines also have cramped sits, what little they did better than Spirit isn't worth the price, and the experience was inconsistent: some times you'll get nice flight attendants, a comfy plane, and a good check-in/check-out, other times you didn't. can't plan around them. With Spirit I could plan around exactly how bad my experience would be reliably. Just about any inconvenience was some fee away to address it.
Frontier was the cheap airline that just wasn't worth it. On the flip side, AA was overpriced with snobbish (just my experience, very limited) staff. Because it's a "cheap" airline, Spirit came with low expectations, and it only exceeded them to the most part.
I shop at walmart compared to whole foods and other "better" chains for similar reasons. "great value" as walmart's motto goes, it isn't about the price, it's about the value you get for what you pay for. Spirit was the "great value" airline.
I don't think this effort to buy it will prevail, I only wish the GME betters were in on this action. The airline's value hasn't gone away, similar to Gamestop. The people like it, the demand for it there, the airlines assets and staff haven't lost their value. I don't see how it isn't a good investment. This attempt to buy it is to little, too late. but if it came in actual stock purchase agreements, I'm down for it. But donating random cash to some site as a pledge, I don't know about that.
jabedude 8 hours ago [-]
The reason people don't like Spirit has less to do with the airplanes and more to do with the typical Spirit passenger. Most of modern life in America is an elaborate series of choices to maximize the distance between yourself and Spirit airlines passengers. All the usual euphemisms apply: 'good school districts', 'safe suburban neighborhoods', etc
shaftway 2 hours ago [-]
> Most of modern life in America is an elaborate series of choices to maximize the distance between yourself and Spirit airlines passengers
So much this. I regret that I have but one upvote to give.
maerF0x0 6 hours ago [-]
This. but also with frontier.
- People using devices without headphones
- People having loud phone calls on speakerphone with vulgar language
- People with bad body odor
- People looking to optimize their outcomes, even at the expense of others and net deleterious. (Speaking in numbers, willing to take +1 point of selfish outcome at the cost of several others' -1 leaving a net negative for the group)
thehappypm 22 hours ago [-]
Spirit seemed to enjoy making their customers hate them. everyone who liked Spirit had to explain themselves (like you did) because their reputation was awful. It was a trainwreck of a brand.
0xbadcafebee 22 hours ago [-]
The only bad experience I ever had on Spirit was from their garbage passengers, never had a problem with the airline itself, flew them probably 20 times. But then again anecdotal evidence is also garbage, so who knows, maybe we were just lucky. Or maybe a vocal minority made it sound worse than it was.
paul7986 22 hours ago [-]
Or the big airlines were paying for all that disparaging marketing on the down low. I wouldnt be surprised.
fragmede 10 hours ago [-]
I would be surprised to hear that, say, United, was paying people to post about their bad experiences with Spirit Arlines online. I'm not in marketing though so maybe that's a thing that happens.
mrguyorama 6 hours ago [-]
20 years ago Southwest Airlines had a reality TV show on Discovery channel about how terrible they were, with episodes like "They ran over my wedding dress with a baggage handler truck" and "They destroyed an irreplaceable guitar of a well known musician".
I always wondered who paid for that.
cromka 17 hours ago [-]
As an European who's lived in the US, Spirit was actually just as "good" as Ryanair. Sure, you can hate on both of them, but they're cheap and moce you from place to place. I can endure any discomfort for 3h if it meant I could save 100 or 150 bucks flying from NYC to Miami/FLL in high season.
I had much worse experiences with Frontier and promised myself never to fly them again. On one occasion we had to wait for 2h on the plane on tarmac after landing at MacArthur airport because... the airport staff was not responding to pilots' calls. Somehow they didn't know the plane was landing. It was 1 AM or so and while it might not have been Frontier's fault, to not be able to sort it out for 2 hours was telling. Had other issues, too, this one was most ridiculous.
WarmWash 21 hours ago [-]
The reason people hated spirit was the same reason they flew spirit, it was cheap.
notepad0x90 19 hours ago [-]
They did things differently compared to other airlines, so it does warrant an explanation. People pay for the cheapest flight, and expect things like free bag checkin. Other airlines will charge everyone more, even if you had no bags and provide free bag checkin. I've had flights where I only had a small backpack and nothing more, I don't want to the "priced in" fee assuming everyone will check a bag. Spirit gave you exactly what you paid for, which is how it should be. No marketing mind games to trick you into thinking you're getting some luxury service. Even in first class most domestic airlines provide a subpar experience, might as well be for a good value like Spirit did. International flights are different though, and the bar is much higher there due to length of flights.
49 minutes ago [-]
sodafountan 19 hours ago [-]
My friends used to joke that it was like flying in a tin can, or that the wheels would fall off mid-flight. The jokes were endless.
I liked Spirit, though, great cost savings, and I didn't mind the minor inconveniences that came with it.
Aside from being known for being a cheap airline, the brand itself was pretty solid... I think it had everything working to its advantage. The bright yellow exteriors of the planes, a catchy name. I think people knew exactly what Spirit was and what they offered, which is the sign of a good brand.
paul7986 22 hours ago [-]
loved Spirit and flew with them 8 different round trips from BWI to many destinations. So cheap (clothes in bookbag) and never had an issue. They will be missed!
micromacrofoot 22 hours ago [-]
the "temu" of airlines if you will
wait a minute... what if?
phainopepla2 22 hours ago [-]
> With Spirit I could plan around exactly how bad my experience would be reliably
Talk about damning with faint praise
notepad0x90 19 hours ago [-]
with other airlines my experience would also be bad, just unreliably. you're getting cramped sits and bad service on united and AA as well.
xeromal 20 hours ago [-]
Agreed. I make decent money as a software engineer but I've probably flow 50+ times with Spirit. Like you said, they are predictable and reliable. What I appreciated about their staff is that they were extremely friendly but also capable of putting entitled people in their place. Oftentimes on AA and United, assholes got their way but on Spirit, they squashed it fast.
The only people surprised by Spirit were people who don't read warning labels and then you should only be surprised once. Heck, I paid 3$ for coffee on spirit but they would gladly bring refills and were proactive about almost like a restaurant. On AA and United, you usually had to go up and ask.
On top of that, you could get the big front seat (tm) which wasn't first class but pretty good about 150$ if you waited until your flight to bid. I got it a bunch and it came with free snacks and drinks and it was much cheaper than buying business
I'm gonna miss it.
10 hours ago [-]
chasil 22 hours ago [-]
American Airlines has actually had terrible customer ratings for some time (and I agree, they can be awful).
Amercian is imo the worst airline out there, and the only one I refuse to fly with. At least the budget airlines are cheaper and honest for horrible service.
tristor 8 hours ago [-]
> I liked Spirit because it was more akin to riding the bus
This is exactly why I would never be caught dead on Spirit. Sartre got it right, "Hell is other people." My issue with Spirit and other budget airlines as a frequent traveler was never about the planes, the staff, or the operations, it was always the other passengers. It's bad enough dealing with people in general in the circumstances we all find ourselves in stuffed into an airplane, but budget airline travelers are generally exactly the sort of folks who ride the bus, which is why nobody wants to ride the bus in the US.
I say all this as someone who enjoys public transport when I'm in Europe and has no problem flying budget airlines in Europe like KLM Cityhopper or EuroWings, because everyone across society uses public transport and budget point airlines in Europe. In the US though, public transport and budget airlines are nearly only used by people who you'd rather not be stuck near for hours at a time for fear of being attacked, coughed on, or otherwise somehow harmed even if minimally which is entirely avoidable by just not.
notepad0x90 39 minutes ago [-]
I'm not paying hundreds of dollars for a glorified bus ride. I've had issues with passengers on other airlines too. There is no expectation of me as a passenger behaving a certain way, and therefore the likelihood of being mistreated by passengers or staff a like is low. As you noted, other people pay more thinking "higher class" people fly delta or whatever, and to protect that image and experience I expect mistreatment from staff and other passengers alike on those flights.
I would rather deal with someone putting up their nasty leg on the chair next to me, or listen to a movie with speaker on for the whole flight, than deal with rude flight attendants that won't respond to my needs, or dirty looks from other passengers because I'm wearing something comfortable.
Aside from what I see on social media posts though, I've never seen anything extreme like that flying on spirit in all the years.
bijowo1676 1 hours ago [-]
it is economic segregation, the only type of segregation that could work in US
Drupon 17 hours ago [-]
>I shop at walmart compared to whole foods and other "better" chains for similar reasons. "great value" as walmart's motto goes, it isn't about the price, it's about the value you get for what you pay for. Spirit was the "great value" airline.
Yeah it's not a secret that you can get by in life on the cheap if you have cheap, trashy tastes.
notepad0x90 46 minutes ago [-]
name calling aside, i think you missed my argument. If you think my taste is trashy, by my argument, your taste is also trashy, you're just dumb enough to spend extra money so you feel like you're above others. That's the point of the whole "value" thing, if more money gets you more value, that's great, if not then you're saying paying more for less is less trashy? It's like a person paying for a $15 wine and a $70 wine, the quality in that range isn't all that different, you're acting like you're paying $10k to fly singapore airlines when you're just flying cramped on united just like on spirit, but you're paying more.
And you sort of made another point I had: people like you, and companies who cater to people like you come with all that haughty snobbishness that's just unpleasant and degrades the experience. Good taste has to do with appreciation of value and quality, not polishing of one's ego, or pretending you're superior to others.
atomicfiredoll 14 hours ago [-]
Be kind... When disagreeing, please reply to the argument instead of calling names.
amazingamazing 23 hours ago [-]
> The only thing missing is ownership that answers to the people — not to shareholders.
Noble, but this will fail. Why would anyone do this? No incentive.
These sorts of initiatives forget the toil of actually operating a business. You might as well get more pledges given that you'd have more control and the same profit share. It will regress to the same as the status quo.
nerdsniper 23 hours ago [-]
I pledged $1,000. I have been daydreaming about a customer-owned airline for years now, just about every time I walk through an airport. This might not have much chance of succeeding in its purchase of Spirit’s assets, but I’d love to watch things unfold if it did.
> These sorts of initiatives forget the toil of actually operating a business.
For most businesses the size of Spirit Airlines, the owners typically do not operate the business. They pay people to do that. I don’t operate REI, even though I’m one of its many owners.
rkagerer 21 hours ago [-]
Thank you. There's a lot of criticism and skepticism here, and it's nice to see an optimistic comment.
I've no idea if the proponents of this plan are reputable, but the concept reminds me of the early years of WestJet, when they made a big fuss about being employee owned and had (back then) a markedly better customer experience. For US residents reading this, I'm told they were a bit like Southwest Airlines.
Even if the naysayers are correct and the probability of this panning out is low, you'll never hit the pitches you don't swing at, right?
Not in the USA. Also, the state’s interests often aren’t super well-aligned with the customers’ interests. Too many conflicts of interest for my taste.
mylifeandtimes 21 hours ago [-]
Evidence? Isn't the state the expression of the people's will? That's the theory of democracy, isn't it?
Also, any evidence or reason to believe that an extraction-based capitalist model is more aligned with customer interests (where the customer is the thing value is extracted from, and where corporate leadership salaries are directly tied to how much they can grift from the customers) than a government where the incentive is to get the maximum number of happy fliers to vote for you?
nerdsniper 21 hours ago [-]
“citizens”, “customers” and “politicians” are three different groups. The government might want to use the airline as tax revenue, artificially increasing prices on customers to support non-customers.
Or the government may want to give their airline unfair advantages, which would decrease real competition and create a brittle industry. Or the government might want to strangle their own company, in order to declare that it is “bad and dumb” in order to manufacture popular support to privatize the public company.
user_7832 17 hours ago [-]
Very limited knowledge, but Air India (a full-fat govt owned airline till recently) didn't really have any of this. Yeah it was losing money, but the customer facing aspects were mostly standard - if anything, more standardized than other private players.
One could make an argument that "Well look, it was costing the government taxpayer money!", and that's a valid point. But given how little the variation in prices are across airlines in India, it's similar to saying "The govt shouldn't do public transport if it loses money, even if society gains".
riffraff 17 hours ago [-]
I can give you an example based on two failed national airlines I experienced for years: Italy's Alitalia and Hungary's Malév.
Customers hated them. They were top examples of when public management fails. They were expensive for the customers and costed the tax payers billions to be kept alive, and basically everyone rejoiced when they were let go (Alitalia being reborn as ITA Airways and effectively operated by Lufthansa, Malev just disappeared).
The problem with state run enterprises is that the accountability to voters is very removed. You elect parliament and government which chooses some administrator at random times which chooses some managers etc..
It's not impossible to do well (many state run companies are fine!) but it's hardly a guarantee.
MrBuddyCasino 21 hours ago [-]
> Isn't the state the expression of the people's will?
Just recently HN discussed the „ban anonymity on the internet“ initiatives of various governments and who was behind it because nobody wants that. Certainly not the citizens.
oezi 17 hours ago [-]
The issue is that citizens issue ambiguous wills. They don't want kids to be able to look at porn, they don't want hate speech online, they don't want to be IDed online. Politicians try to square those competing wills.
orthecreedence 6 hours ago [-]
> Politicians try to square those competing wills.
Yeah! They're doing their best! They definitely aren't fascist stooges trying to expand the surveillance state.
MrBuddyCasino 15 hours ago [-]
This is not even remotely how most democracies work. Even California didn’t have a majority for gay marriage, yet it became law. Immigration is unpopular everywhere, yet politicians ignore voters wishes, often for decades.
The masses are mostly inert, elites and counter elites move the needle. Those who can manufacture consent win.
neonstatic 20 hours ago [-]
wow, it's almost like you will become... a shareholder?
corvad 23 hours ago [-]
I'm not sure that's even noble as by buying you would be a shareholder...
UqWBcuFx6NV4r 23 hours ago [-]
Yes. Reminds me of the “anarchists” that don’t realise that they just want to recreate the government but with their people in charge.
mjevans 21 hours ago [-]
Some of them want to create a monarchy with them in charge... Remember to be on the lookout for that trend too.
danaw 18 hours ago [-]
co-op: one member, one vote. members elect leadership with standard term limits. emphasis on services, price and patron returns. dividend according to use not capital investment. members have direct engagement in financials.
public companies: votes scale with shares. large institutional investors and other large share holders have most say in leadership. emphasis on "shareholder value" (eg extractive value). dividends according to shares. shareholders have only limited visibility into finances.
they're very different, concluding otherwise is misguided
paulddraper 23 hours ago [-]
“The only thing missing is ownership that answers to the people — not to shareholders.”
Like, all people in the world?
Customers? Employees?
What does this mean?
EDIT: It’s shareholders, but each person has one vote regardless of share count.
nerdsniper 22 hours ago [-]
IMHO this should have been written “to the customers and employees”. To me, those are the people who compose a business enterprise.
JumpCrisscross 22 hours ago [-]
I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops.
throw0101c 22 hours ago [-]
> I’ve never seen that work. There is a fundamental tension between those groups. Hence, member-owned co-ops and employee-owned co-ops.
Focusing strictly on shareholders (value) has been en vogue since the 1970s:
Somehow companies managed to survive and grow before the 1970s.
JumpCrisscross 20 hours ago [-]
> Focusing strictly on shareholders (value) has been en vogue since the 1970s
It's been in vogue, in circles, since the 17th century. We're not talking about for-profit structures here.
throw0101c 11 hours ago [-]
One needs to ask which "shareholder" are we talking about? The pension fund that wants steady cash flow for decades? The retirement-saver, who wants to grow a big bucket for retirement? The already-retired, who wants less growth and more wealth preservation? The hedge fund who wants a couple of quarters good numbers to raise their take of the 2-and-20? The options or day trader?
"Investor heterogeneity" is a thing.
There is no Platonic "shareholder" with one set of needs.
JackFr 20 hours ago [-]
But the customers and employees don’t actually put up the money for the enterprise.
If you assume there is an airplane — great, run the airline for the customers and employees. But the cost of the airplane can’t be handwaved away.
morkalork 23 hours ago [-]
Co-ops don't exist at all, right?
tunapizza 22 hours ago [-]
Few people know this, but Desjardins, a Canadian financial service cooperative, is hugely popular in the province of Quebec (and also Ontario), and has close to CAD $400 billions in total assets.
morkalork 9 hours ago [-]
The largest exporter of pork and poultry from Canada ($9B in revenue!) is also a 100 year old co-op from Quebec.
doubled112 22 hours ago [-]
I wouldn't say they are common.
MEC was the only co-op I have ever been part of. I'm pretty sure they stopped being a co-op and sold it to private equity.
throw0101c 22 hours ago [-]
For the Americans in the audience: MEC ~ Canadian REI.
Vanguard is "kind of" like a co-op, in that it is owned by its mutual funds which are owned by its customers.
Fidelity is still better in some metrics, however.
dragontamer 17 hours ago [-]
This really doesn't feel like a Co-op to me.
It sounds more like a credit union. (first $5 goes to your ownership share / vote, and the rest of your money goes to your account).
amazingamazing 22 hours ago [-]
I dont know of any with such high capex
tonyarkles 21 hours ago [-]
This is a really interesting thing, both from an ownership structure perspective and from a "there is nuance in the details" perspective. I did a bit of a deep dive into this a few years ago when there was a local refinery strike. The refinery is a co-op and is also part of a larger co-op system.
I'll lay out the specifics here from what I learned. I'm not convinced either way, yet, that it could work for an airline.
So here's the ownership structure:
- Co-op Refinery Complex (CRC) - produces fuel
- Federated Co-operatives (FCL) - owns the refinery, also owns food and agriculture distribution warehouses, negotiates bulk pricing
- 200-ish independent regional Co-ops jointly own FCL
The CRC is highly profitable. FCL is profitable. The independent regional co-ops are not, on their own, all individually profitable. Some of these exist in small rural centres, some of them exist in larger cities. The urban ones are generally profitable, the smaller ones not so much. The rural ones, though, are largely the lifebloods of their communities; it's not unusual for the Co-op Grocery Store and Co-op Gas Station to be the only sources of food and fuel for miles and miles. While these do sometimes run at a loss, they make up for it with their annual Patronage cheques from FCL: when the CRC makes a profit and when FCL makes a profit (from the CRC and from their distribution network), those profits get returned back to the member co-ops on a pro rata basis: buy more from FCL, get more at the end of the year.
At the far tail end, each of these independent co-ops is a member-owned co-op. At the end of the year I end up getting a patronage cheque based on how much fuel, food, and building supplies I bought that year. It's not large, but getting a $100 cheque in the mail is always nice :).
In this situation, though, it all works because the not-so-profitable pieces own both their upstream wholesalers and a crazy-profitable refinery. (The refinery sells to other customers outside of FCL as well).
One of the other critical pieces that the strike/lockout/overall "labour dispute" really made clear to everyone: the independent Co-ops, FCL, and the upstream CRC are all member-owned co-ops, not worker-owned co-ops.
---
So let's look at how an airline co-op might be structured. The first parallel that I could see would be flipping the regional airline model on its head; currently the big players like Delta and United run a bunch of their smaller routes through regionals (SkyWest, Republic, etc). If a bunch of them got together, they could in theory jointly one one of the majors. The wrinkle there, as others have pointed out, the majors aren't profitable as airlines, but rather through their credit cards and loyalty programs. Alternative, then? Do a bunch of regionals get together and buy a bank? Let the bank be profitable, let the major airline handle traffic between the regional hubs?
I know quite a bit less about worker-owned co-ops, but generally speaking aviation is incredibly capital intensive. Starting a worker-owned co-op airline is probably not possible. A single, say, 737 Max 8 costs $121M. That capital's gotta come from somewhere.
fragmede 10 hours ago [-]
Starting one from scratch, sure, but Spirit already has the airplanes, no?
tonyarkles 7 hours ago [-]
Has some, yes, although it looks like at least 75% of the fleet is actually leased and not owned. Looking, though, it seems like they currently have an incredibly small market cap of only $7M (with a huge spread), so maybe you could get enough "founding members" together to make a go of it. Buy out the current assets for pennies on the dollars (the leases have value too, but much less than the actual aircraft)
Are you thinking worker co-op or member co-op?
empath75 7 hours ago [-]
I'm disappointed at how gullible people are about this.
Spirit as an asset is worth less than $0. Buying it would be a commitment to set money on fire for a decade.
pm90 19 hours ago [-]
The real solution should be a massive intercity bullet train program that connects major transit hubs, like the interstate highway buildout. The massive infrastructure spend would kickstart the US economy and provide thousands of jobs.
Brendinooo 10 hours ago [-]
Bullet trains would be good in tighter networks of cities. Southern Cal, Acela corridor.
But I'm just not sure the demand would be there for longer distances unless it's so cheap that it's worth the extra time.
Like what's China to Kunmung, a 6 hour flight vs a 12 hour train, at a comparable cost?
foolfoolz 8 hours ago [-]
even SF to LA would have trouble with a high speed rail because the price would likely be the same as a flight
tecleandor 8 hours ago [-]
In Spain, a similar length high speed train route would be Madrid-Barcelona, that's 400miles and takes 2h 30min.
If you offer me the same price for flying than for taking the high speed train, I'll take the train every time.
In practice it'll take less travel time, no security lines or theater (no problem bringing your water bottle or whatever), you can bring more luggage, you can stand up/walk/visit the bar during the trip, you go from city center to city center so you don't have to spend an extra in taxis... I just arrive there 20-30 minutes before the train leaves and that's all.
ehremington 7 hours ago [-]
there will be no theater until a terrorist attacks it and then it will be exactly the same
pahkah 8 hours ago [-]
Oh I don't know — I travel the Boston-DC route a lot and fly only because it's significantly cheaper than taking the train. If prices were comparable I would take the train even without it being "high speed", I think there's a market for high speed rail if the prices were as low as flights!
999900000999 18 hours ago [-]
Sounds good if you live on the East Coast.
Even with Japanese level high speed rail NYC to LA still takes much much longer than flying.
You need to buy land. Disrupt wildlife, and various ecosystems.
The government should of bailed out Spirit instead. They served a public good.
Allowing lower to middle income people to travel helps everyone.
nerdsniper 17 hours ago [-]
Trains have been proven to be able to go at least 375mph [0]. That would make NYC->SF take 6.9 hours to travel the 4162 km. The current average flight time from NYC to SF is 6.7 hours.
So, it's at least technically possible.
China is doing R&D on a partial-vacuum train (basically Musk's hyperloop thing) with a target of 1,243 mph[1]. That's probably a pipe dream, but worth mentioning nonetheless.
> The government should of [sic] bailed out Spirit instead.
I'd be okay with this if all the taxpayers were granted equal shares that their collective money could have purchased at an imputed no-bailout price.
0: L0 Series SCMaglev
1: T-Flight train
haldujai 16 hours ago [-]
> The current average flight time from NYC to SF is 6.7 hours.
What's your source for this? I take this flight a lot and I find it hard to believe it's more than 5.5-5.75 on average. Looking at the last few weeks for one of them[0] supports my experience.
It's probably scheduled times. I find that time in the air ends up being about an hour less than the time on the ticket.
999900000999 10 hours ago [-]
That's straight math. Not assuming any stops or slow downs.
According to Gemini this hypothetical train would take about 18 hours.
It would also cost hundreds of billions of dollars and a decade to build.
Doesn't do much for seeing Uncle John next Tuesday.
I like trains. I like them a lot. But they don't work over long distances. Particular when you have dozens of state and city jurisdictions to cross.
Each of them get a vote.
Honestly I'd be happy just to have quality HSR on the East Coast. Boston to Richmond takes like 12 hours right now.
Maybe the West Coast could get a Seattle to San Diego route.
goda90 8 hours ago [-]
18 hours with seats comfortable enough to sleep in, easy to get up and move around to lounge cars, wifi, and plenty of pretty views? Add some showers onboard and you're totally set. I think there are plenty of people who would take that over flying. A direct flight from NYC to San Francisco is almost 7 hours, not counting the wildly variable time needed to get to the airport and make it to your gate, and then you're still facing delays and prolonged discomfort.
testing22321 9 hours ago [-]
> It would also cost hundreds of billions of dollars and a decade to build.
Doesn't do much for seeing Uncle John next Tuesday.
You just described the building of the interstate highway system, but I doubt there’s a person alive who would say it wasn’t worthwhile.
I fear Americans are simple to selfish to have any desire to do time consuming expensive things that will improve their country long term. They just want benefits for themselves , now.
999900000999 4 hours ago [-]
I would like to fix our health care system first.
Meanwhile, the government could announce a bailout of Spirit tonight.
Wouldn't take nearly as much effort.
testing22321 3 hours ago [-]
> I would like to fix our health care system first
Good ol Zoidberg once again says “why not both?”
If you don’t fix anything else until healthcare is fixed, you’ll be fixing nothing until the end of time
10 hours ago [-]
17 hours ago [-]
hnhnhnhnhnhnhn 5 hours ago [-]
Far too expensive
bravoetch 19 hours ago [-]
Why do people want to generate jobs? I'd rather generate a jobless utopia where we all do art.
Jtarii 10 hours ago [-]
Hate to break it to you but the average guy that does manual labour would more likely become a criminal than a musician if you deleted his job.
What's that saying about idle hands.
Jobs root people to their communities and give them purpose in life.
HWR_14 19 hours ago [-]
Because today the options are "jobs exist" or "people starve in the street".
Jtarii 9 hours ago [-]
Starvation is not a likely outcome from job loss in the western world.
brookst 19 hours ago [-]
Check out the etymology of “utopia”
antoniojtorres 23 hours ago [-]
Random side note. Why do many of these (presumably) LLM stamped out sites have the same aesthetic where they all need a pulsating indicator at the top as if to indicate some sort of urgency aesthetic?
grahamnorton39 21 hours ago [-]
Or the thing where they have a bombastic display of numbers, rehashing either emphatically trivial information, or information presented elsewhere, as if they’re the most important figures in the universe. e.g.
> *0* hedge fund owners. Zero
or including the date Spirit collapsed (despite already mentioning it earlier on the page!). Why not also include “*6* letters in ‘Spirit’” while you’re at it?
addandsubtract 20 hours ago [-]
Templates need to be filled. Breaking template rules requires actual thinking.
mplewis 21 hours ago [-]
You know the answer. An LLM wrote it.
danaw 18 hours ago [-]
assuming it's an llm site, the implication here is some action needs to be taken before private equity buys it for scraps (inferred from the homepage copy)
whether it's an llm, a template or bespoke made from bytecode doesn't really matter does it?
sMarsIntruder 18 hours ago [-]
I agree, but I started noticing the em-dash usage spike.
danaw 12 hours ago [-]
i was one of the weirdos that used em dashes pre-llms but yeah it can def be an indicator
drabbiticus 10 hours ago [-]
We may be getting off-topic, but I despise how LLMS made em-dashes a thing that people associate with slop posts.
danaw 6 hours ago [-]
it's because they were trained on lots of stolen fluff pieces in major publications, also part of why they have such an annoyingly positive tone
tbrownaw 19 hours ago [-]
But without a sense of urgency the marks might stop to think first.
testemailfordg2 19 hours ago [-]
A similar large scale success in India decades ago:-
AMUL is an Indian multinational dairy cooperative, founded on 19 December 1946. With a turnover of US$6.2 billion (2022) and 3.6 million farmer-members, it is the world's largest dairy cooperative and a household name for milk and milk products across India.
The cooperative was born out of exploitation: farmers in Kheda, Gujarat, were forced to supply milk to Polson Dairy, which held a monopoly and paid farmers unfairly through commission-taking agents.
AMUL returns 85% of every rupee earned back to farmers — far above the global average of 33% — and procures milk at rates 15–20% higher than private dairies.
AMUL's democratic governance ensures farmers elect board members who represent their interests, and the Managing Director of each unit is appointed by this farmer-led board — not the state government — preventing political interference and corruption.
AMUL demonstrates how a business can achieve large-scale commercial success while prioritising social justice and environmental care — through collective ownership, democratic governance, equitable profit-sharing, and community investment — offering a powerful model for cooperatives worldwide.
xenadu02 2 hours ago [-]
Spirit has filed bankruptcy twice in the past year. Bondholders aren't going to accept any purchase plan unless the buyer is going to vastly overpay.
They probably believe they'll get more money back from selling the aircraft. If American or United want a new airplane they place an order and wait 5 or more years for delivery. No airline has excess airplanes available to take new routes. They are so expensive just a handful being idle (outside of expected maintenance winodws) would erase all profit. That means if there is a new opportunity it can take a very long time to go after it.
Airlines from around the world will line up to buy every single one of Spirit's airplanes because it means they can have one _today_. A few might even pay premium prices for them.
Airlines are a cyclical business. Boeing and Airbus gobble up every spare dollar on the back end and customer pressure eats up the front end. Then you're subject to all sorts of random shocks outside your control without much ability to adjust your fixed costs. A difficult business to be in.
drumttocs8 22 hours ago [-]
Sorry, why would I invest in a failed airline with an anonymous collective with no defined leadership?
How could it do anything but fail?
bombcar 21 hours ago [-]
It's almost always better to create a new airline ex-nihilo as you get brand new planes, which are better than older ones.
ivraatiems 17 hours ago [-]
This is almost exactly the opposite of what most new airlines do. The fastest, cheapest way to get a good plane is to buy an old plane from an existing airline (preferably one going out of business, so you get a deal) and renovate it a little.
reddalo 17 hours ago [-]
Ryanair is the best performing budget airline in Europe and they only buy new planes, because it's way cheaper to run them. Less time on land for maintenance = less wasted money.
ivraatiems 7 hours ago [-]
Ryanair was founded more than 40 years ago. An established budget airline choosing to strategically make an expensive choice isn't the same as a new airline starting up.
danelski 14 hours ago [-]
OK, but are you able to put an order on 100+ brand-new hauls if you're just starting out without the enormous capital to back you?
MarchApril 7 hours ago [-]
Used, high quality machinery is always in demand, but I think "used" and "planes" have the ability to subconciously sow some doubts in many people. I personally never heard of any airlines with 100% used planes in their fleets. I definitely would choose an airline with 100% new planes. I guess I'm another victim of marketing.
fakedang 21 hours ago [-]
Good luck trying to get any planes with the current backlog. Unless you enjoy flying in the 737 Max.
toast0 20 hours ago [-]
The 737 MAX is fine enough. But it's not like you can order those for immediate delivery either. There's almost 5,000 pending orders, and Boeing can make on the order of 500 of them in a good year.
bombcar 20 hours ago [-]
We'll call it Apple Air™ and the 737 Pro Max - 99% of our budget will be legal fees.
skarz 7 hours ago [-]
Is this real? I examined to their source code and found an exposed TypeScript RPC which indicates the following:
totalMembers: 4954
totalPledged: 5678872
averagePledge: 1146.320549
However the numbers on the website appear to be hardcoded in with very dramatically different numbers.
Boss0565 7 hours ago [-]
This is vibe coded as fuck and anyone can submit a pledge, so no
Yeah, I'm starting wonder if this is bs. They don't have a twitter account like the pledge form indicates. The youtuber that purportedly started the campaign only has like 36k subscribers, so it's not clear where such a high level of pledges would be coming from and the rpc endpoint response vs page count is pretty suspicious.
skarz 7 hours ago [-]
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KaiserPro 5 hours ago [-]
[dead]
corvad 23 hours ago [-]
I get the idea but this seems very much something not credible, like who's behind it, what are the guarantees, etc.
Sounds like someone is selling securities without a license tbh.
apublicfrog 17 hours ago [-]
> Important Legal Notice: This is a non-binding pledge of intent. No money is collected at this stage. All references to profit-sharing, dividends, voting rights, and ownership are proposed concepts only — not confirmed arrangements. Nothing on this site constitutes a securities offering, investment contract, or financial instrument of any kind. The final cooperative structure must be reviewed and approved by qualified securities and aviation counsel. Participation does not guarantee ownership, financial return, or membership in any final entity. This is a movement, not an investment product.
From skimming, I see at least 5 places where this is reiterated on the page.
fny 9 hours ago [-]
It's also not a sale of any sort. They're asking for pledges and have an accredited investor question.
burnt-resistor 20 hours ago [-]
LLMs make time-sensitive frauds easier and faster to stand up to take money from idiots.
I'm surprised they don't also include a team page with a bunch of ChatGPT-generated photographs of fresh-faced fake people to really sell it.
directevolve 20 hours ago [-]
Not that this isn’t a scam, but they’re currently asking for pledges to contribute, not cash.
wewtyflakes 23 hours ago [-]
Maybe it is better to let the airline that treats people like adversarial cattle to die; maybe it is a good signal that that is a bad business model.
corvad 23 hours ago [-]
Yes, but also one less anything in a highly competitive industry is a bad thing overall. Not saying I think it's a good idea but I seem a grain of reasoning behind it however misleading it might be.
alex43578 23 hours ago [-]
If the industry is already highly competitive, which the US airline market is by any measure, one more marginal carrier accounting for just 3% of passenger miles, makes very little difference.
amelius 12 hours ago [-]
But we can't just let the adversarial cattle get away with it.
s5300 21 hours ago [-]
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washingupliquid 21 hours ago [-]
This is reminiscent of the CHAZ takeover in Seattle when the protesters planted like 4 potatoes in a urine-soaked park and called it "the People's Garden" or whatever.
Spirit was an objectively terrible airline. Their business model failed. They folded. The end. This is why you can't fly Braniff or Southern Airways anymore in 2026. Failed businesses go under, they don't live on in perpetuity.
ab_testing 21 hours ago [-]
I am not sure what the site intends to do, but doesn’t spirit have eight billion in debt with about one billion in payments due immediately.
The planes and other assets belong to the debt holders. Unless this site plans to raise a couple of billion, I don’t think they are buying any airline .
thekoma 11 hours ago [-]
What do you think the debt holders will do with the planes and the other assets?
lokar 7 hours ago [-]
Spirit, like many airlines, leases most or all of the planes
17 hours ago [-]
kylecazar 23 hours ago [-]
Average pledge size is $666 (from 40k pledges). That strikes me as a lot. And obviously cursed.
19 hours ago [-]
danpalmer 23 hours ago [-]
That's like 39,900 people pledging at the minimum $45, and 100 investors pledging at $250k. Averages can be misleading.
corvad 23 hours ago [-]
Agreed, a median would be a better indication.
kylecazar 23 hours ago [-]
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chrisss395 6 hours ago [-]
Interesting idea as someone who spent a lot of my career in aerospace and airlines. If I were running the transformation my initial shortlist would be:
1) Revenue/Route management: re-think the routes with a ruthless focus on sustainable routes with defensible margins.
2) Customer experience and Brand: being an LCC can't come at the expense of customers, i.e., the fare is so cheap we get to treat you like shit.
3) Capital-structure & cost base: you need to right-size the debt, fix liquidity, and ensure you have a durable cost structure (fuel-risk management, etc.)
anonymouscaller 23 hours ago [-]
Seems like an interesting idea. Wish I could get some more information on who is behind this website for credibility purposes
godzillabrennus 23 hours ago [-]
Looks like an AI-generated site that says it's not for investment purposes but basically makes the case for investment... I'd run from this.
corvad 23 hours ago [-]
Yeah it honestly seems like an opportunity scam.
kqr2 18 hours ago [-]
SEC should investigate this.
zaptheimpaler 22 hours ago [-]
Awesome, I hope we see a lot more of this. Co-ops do work, REI is one, Modo is another and we could have many more. Over and over again companies are slowly destroyed by extractive shareholders or PE firms, the current structure of a public company is not the only possible shape.
A period documentary about the Meridian Triumph motorcycles co op. Sad, thoughtful take on a particular bit of British manufacturing history. That the co op started with a strike, had to trade exclusively with a single customer, and that the senior workers became the managers they hated.
Due to the structure of that co op there was no way for them to access the capital they needed to redevelop their products and it ended up in private hands as a result, leaving the workers with nothing. I don’t think I would wish a co op on anybody.
zaptheimpaler 19 hours ago [-]
Thanks I will watch it, looks interesting. But i would say there's also a million documentaries, movies, news reports, examples and more about insane, evil, stupid shit that goes on in various corporations or how organizations turn to shit when acquired by PE as well. We know for example that cigarette companies knew their products caused cancer and other health problems for decades(!) while denying it publicly, and this is the bar regulators expect today - that they will do absolutely anything including letting people die through smoking or pollution or blocking access to healthcare to make a profit. So a co-op going poorly doesn't invalidate the concept.
smackeyacky 17 hours ago [-]
No doubt there is evil in the corporate world. I do think there is something in that documentary that changed my mind about a few things. It might not be representative o today since we’re talking 1970s UK but thought provoking anyway.
neilfrndes 21 hours ago [-]
Tangential. If you're interested in the history of airlines and the intense power struggles, I highly recommend the book Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines Into Chaos by Thomas Petzinger Jr.
divbzero 18 hours ago [-]
> The only thing missing is ownership that answers to the people — not to shareholders.
To be clear, the proposed Spirit Air 2.0 would also be answerable to shareholders. A structural difference is that each shareholder would have one vote regardless of capital contribution. But the real substantive difference is the spirit of what they’re fighting for: worker ownership, affordable fares, transparent operations, no golden parachutes, etc.
happyopossum 20 hours ago [-]
“It failed because Wall Street loaded it with debt”
Bullhockey. Wall Street doesn’t assign debt. Poor management and bad risk-assessment leads to assuming bad debt.
This is like saying it’s the car’s fault that you drove to work today…
lefrenchy 21 hours ago [-]
Can someone help me understand the argument that the FTC blocking the merger was bad?
The argument I have seen is that blocking it resulted in Spirit dying and people losing their jobs and there being less competition.
Wouldn’t the same exact thing have happened regardless? Am i supposed to believe that Jet Blue would have kept all of those employees? There would be one less competitor anyway, and in the merger case they’re even more powerful now meaning competing is harder.
It seems to me it’s just that creditors want to be paid out by a merger rather than paid our for cents on the dollar when it died on it’s own.
sephamorr 20 hours ago [-]
JetBlue is a small rival (JetBlue at ~5% of US traffic, Spirit at ~3%) to the big 4 United/American/Southwest/Delta (each with ~17%). At least on the surface, a larger JetBlue might be more competitive rather than forcing them into the unequal partnerships like they have with United at the moment.
Certainly, some jobs would be lost, but I do think that Spirit dying is a worse outcome than joining another small airline.
tbrownaw 19 hours ago [-]
A merger would be more orderly, especially if overall capacity only needed to go down by part of what's in the chunk being cut out.
21 hours ago [-]
midnitewarrior 21 hours ago [-]
The straw that broke the camel's back is the fuel spike due to the Iran War. That drained the remaining liquidity.
No idea if the extra time "normal" fuel prices would have allowed Spirit to find a way to stay afloat, but the fuel price spike stole any time they had to figure it out.
roshin 21 hours ago [-]
I was okay with most of the skimping with spirit airways, but what really annoyed me was their delays. I can plan ahead not to bring luggage and to sit cramped. But arriving at my destination 5 hours later was a deal breaker for me. I don't know if there are statistics for how delayed they are vs competitors, but after my second flight with them, I decided to fly with airlines that are more punctual.
ninjalanternshk 20 hours ago [-]
Looks like Spirit is #5 out of 21 for most on-time flights, so, top 20%.
> PROPOSED ONLY: Profit shares would scale with pledge amount under the proposed structure. This is not a confirmed financial instrument. Nothing here constitutes an offer of securities.
There's no way they could get away with something significantly different, right? Like anything else they'd just be liable for being sued?
CWwdcdk7h 9 hours ago [-]
I guess Spirit will have most of assets liquidated before site author even finds a way to actually accept payments, and SEC won't care until that happens, it is too crazy even to waste time on investigating it.
joeblogsmomma 7 hours ago [-]
Tiktok weirdo doing this for clout and popularity feel for the people and families effected by spirit shutting down, the communities and local economies. Why can't people donate directly to those who need then pledge "theoretical money" for clicks.
warbaker 6 hours ago [-]
This is one of the worst ideas I have ever heard.
ho_schi 15 hours ago [-]
Reading from Wikipedia Spirit sounds like a horrible low-cost Airline like Ryanair. Why should we rescue something which hurts employees and passengers?
If it would be TWA or PanAm my reaction would be positive.
danelski 14 hours ago [-]
Many people, myself included, will gladly be 'hurt' on a 2-3 hour flight, if that means we can save some noticeable amount of money on the fare.
solumos 6 hours ago [-]
“Horrible” and “low cost” are contradictory for many consumers
extraduder_ire 3 hours ago [-]
The "low cost" in Ultra-Low-Cost-Carrier refers to the operating costs to the company, not the cost they charge for goods and services. Though they usually come in tandem.
newuser94303 22 hours ago [-]
If the employees bought it, it would probably make more sense. Random people don't seem invested enough.
jumperabg 15 hours ago [-]
Interesting, what will happen to the current planes and crews, why would I want to invest and bring back Spirit?
johnnyApplePRNG 20 hours ago [-]
This REEKS of /r/wallstreetbets manipulation... I vote to remove it entirely.
Nobody is buying spirit air... a bunch of gamblers just want to pump the price monday morning.
danaw 18 hours ago [-]
devils advocate with no skin in the game: they're not taking any money, just "pledges". if it were a scam why not take a "pledge fee" of some kind?
johnnyApplePRNG 5 hours ago [-]
To give the guise of "serious investment about to take the company back towards a course of profitability and numba go up" of course.
LetsGetTechnicl 8 hours ago [-]
Why don't we have a nationalized airline
mlmonkey 18 hours ago [-]
I'm wondering why an airline like Ryan Air (which is similar in spirit to Spirit Air) didn't buy them out ...?
meltyness 20 hours ago [-]
Let's see the pool's at $88M with $670 average buy-in, so each of the 132k buyers will owe $15,000-$60,000 of outstanding debt so they can support solvency and to keep airline prices down, and become buyers in the not particularly exciting and highly regulated, volatile capex and opex expensive, fuel consuming and definitely not particularly environmentally friendly, with much larger competitors passenger air transport industry. What an opportunity!
tyjkot 20 hours ago [-]
Feels scammy… that’s all I’ve got to say.
consumer451 21 hours ago [-]
> if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down. The airline industry’s demand for capital ever since that first flight has been insatiable.
- Warren Buffett (Comedian)
opengrass 23 hours ago [-]
Looks like well-worded scam.
swaits 23 hours ago [-]
Let’s throw good money after bad!!!
Brilliant.
11 hours ago [-]
williamDafoe 16 hours ago [-]
What a foolish mistake!
On Our maiden voyage aboard spirit, they dumped us halfway home, in las vegas. No compensation, no meal voucher, no overnight accomodation - they just DUMPED US (along with 30 other connecting passengers).
Spirit seems incapable of holding a flight even 5 mins for connecting passengers delayed via spirit's incompetence!
We saw them slam the door 50FT away to our connecting plane as we got off our plane. We watched in horror - our faces against the airport glass - as our next-leg pilot looked up at us and sat on the tarmac 30ft away doing NOTHING for 20 minutes as Spirit told us "nothing could be done" and "you missed your connecting flight" and "see the agent to get DUMPED AND NOTHING, later".
rootsudo 22 hours ago [-]
It’s kinda dumb. They don’t own any planes, and buying the spirit name means the bank/hesge fund gets paid because that’s probably the most valuable piece of property spirit has.
The employees are all gone and shuttered, even if you go try to rehire them they are all jumping to any other company if they stayed to the end. The pilots and cabin crew lost seniority and you won’t be able to afford ALPA union pay or AFA pay.
So while they somehow raised 26 million, it feels like a hollow gesture so that the creditors get paid but not really be realized into an actual airline with an AOC
At 26 million raised it’s actually better to make a new airline and run it lean. Get a good route or two and it could work, but 26 million is lean but doable. The liquidators want to get spirt planes released asap.
directevolve 20 hours ago [-]
They haven’t raised a cent. They’re asking for pledges, not actual cash contributions.
bombcar 21 hours ago [-]
It would be simpler to contract with Spirit Halloween to start a new airline.
hellojimbo 19 hours ago [-]
why not just start your own airline instead of buying one that is dysfunctional and losing money
Ekaros 17 hours ago [-]
In current era of regulation for starting airline is huge amount of paperwork. All sorts of permits, plans, filed documents and so on. So much so that just buying parts from collapsed one is cheaper option.
danaw 18 hours ago [-]
because airplanes, routes, employees, pilots etc arent exactly easy to come by without a whole lot more time and capital expenditure
burnt-resistor 20 hours ago [-]
If business people couldn't run it as a business, what hope do a bunch of random fools on the internet have?
Plus, it's a carbon-polluting business that props up dirty, corrupt petrochem industries and regimes.
Let it die.
BoorishBears 20 hours ago [-]
I was looking into Spirit's bankruptcy(s) and it's really fascinating.
One of the creditors that piloted their exit from the first bankruptcy also provided on $80M out of a $270M line of credit secured by assets Spirit needed to survive (an RCF was backed by their right to take-off and land at LGA amoungst other thinfs)
1 week before the 2nd bankruptcy, Spirit drew against the entirety of that line of credit.
During the 2nd bankruptcy, besides rolling large amounts the debt owed to them from the 1st bankruptcy (so Spirit would need to pay it back before other creditors), they had the proceeds of plane sales go towards... interest payments on their RCF and paying back additional financing from the 2nd bankruptcy.
The creditors leading the 2nd bankruptcy also sold the lease to Spirit's largest hangar on April 2nd, but did a similar thing again: instead of the cash going towards operations, it went to the creditors who'd led both bankruptcies.
-
Seeing as they refused the government's bailout, I'm guessing this is doomed as well, but interesting stuff for a non-finance person
wonnage 21 hours ago [-]
Kinda sketchy that all of the base stats are hardcoded in the JS (foundingPatrons is 36605, totalPledged is 22816377). Then it fetches some "live" stats and adds values to that.
Teever 23 hours ago [-]
I'm not American and I've never flown Spirit Air so can someone explain where all the loyalty to this airline is coming from? Like isn't this another big corp biting the dust?
wincy 22 hours ago [-]
I could fly from the middle of the USA to Orlando round trip for $90 if I just packed a backpack. Unbeatable value, that’s cheap enough for a spur of the moment weekend trip for the whole family.
williamDafoe 16 hours ago [-]
Only on a nonstop. Spirit dumps passengers all the time on vonnections.
TheCondor 10 hours ago [-]
Not a fan of spirit. I used to kind of like Frontier, but they ended that.
I was doing a two hour flight monthly for business, 2 hours each way. Frontier was about half the cost of more premium airlines. The times were good and predictable. I never checked anything and maybe rarely I’d buy a snack. Now I won’t claim that it was “comfortable” but it was predictable, inexpensive and kind of efficient all of which sort of creates a ‘comfort.’ It was a flying bus and it was ok at that.
Somewhere, I think when there became competition for the ultra discount airlines, the staff culture changed and it seemed not uncommon to encounter an employee that resented the customers. Spirit had multiple reported incidents of crew filming customers and just being generally antagonistic. Basically they hire service people that generally don’t have to provide much service and it becomes ”extra work” when they do;worse they often see a price tag associated with the “extra work” and it’s not reflected in their compensation
ceroxylon 23 hours ago [-]
They had affordable flights between places like LA and Vegas / Florida and Cancún so it became almost like a bus route for some people.
pRusya 22 hours ago [-]
It had good departure times both mornings and evenings.
And it was cheap, so you could book a next day flight without paying multiples in premium.
It was fun and affordable to fly out of state in the morning, spend a day exploring another place and get back at night.
soared 22 hours ago [-]
For clarity, absolutely nobody did or does this. Spirit is bottom of the barrel cheap - it made flying accessible for many people, who otherwise would not fly (think Ryan air). Absolutely nobody was interstate day tripping, especially on spirt, besides this poster.
phainopepla2 21 hours ago [-]
I'm not sure why you're downvoted. You're definitely right that it's extremely rare behavior.
fragmede 9 hours ago [-]
This is based on access to their passenger records and having done data science analysis on it, or just vibes?
Not sure, maybe people like the underdog or just like the business model, you pay for what you get. I flew them a couple times and it wasn't great.
icco 23 hours ago [-]
It and Frontier were the only affordable airlines.
loloquwowndueo 22 hours ago [-]
No, it’s a small corp biting the dust.
bigstrat2003 21 hours ago [-]
I am American and it baffles me as well. Spirit was one of the worst possible choices for flying, where every little thing was an upcharge. Why people willingly submitted to that insanity I will never understand.
AlexandrB 20 hours ago [-]
They often had the cheapest fares. That's basically the reason for all the shitty upcharges in the airline industry. Many folks don't care enough about that kind of thing to pay more for a flight on a different airline.
12 hours ago [-]
metalman 12 hours ago [-]
100% guarantee of years of uncertainty, so
any large venture built on disposable income
is a non starter.
The Cruise Ship industry is precarious, and with a hanta virus outbreak on one ship pointing to just how shoddy the whole thing
needs to be for profit, a surge of sick ships is likely.
Fuel for planes and ships could cost much more, and then become unavailible in certain locations, which would be part of the recipie for a full crisis involving a sick ship or resort, some small country refusing
(legitametly) a quarantiened ship, whatever scenario, the point is that running these huge tourist operations requires significant EXCESS capacity, not missing pieces and ultra slim margins.
13 hours ago [-]
mohamedkoubaa 21 hours ago [-]
We are just not a serious country anymore are we
22 hours ago [-]
anovikov 18 hours ago [-]
It's a lot simpler. They were providing cheapest service in the era when almost 50% of spending is from top 10% consumers. Inequality made no-frills model unprofitable, no airline without a good premium product and good public image is viable today.
shevy-java 18 hours ago [-]
The orange king is incompetent on just about every level, save for his cronies pocketing away money into private pockets. You have to ask the people who voted for him why they support this.
Vaslo 19 hours ago [-]
We can barely make an mmo with a bunch of kickstarters who threw in 50 bucks 5 years ago complaining about “the excessive money they laid out” squeaky wheeling the games to death, this is going to be even worse.
Great idea in theory but…
mrcwinn 20 hours ago [-]
Please be sure to start a second site that raises money to bail out the first site.
alex43578 23 hours ago [-]
LOL. Will this be the first AI-slop to earn an SEC investigation?
dmitrygr 22 hours ago [-]
So many airline crashes were traced back to “poor company culture” by NTSB that I would never consider flying a company owned by random internet people. Having someone with a lot to lose in charge of things is a feature.
crooked-v 23 hours ago [-]
I wonder how much money I could get from starting a Kickstarter to attempt to* buy up as much of Spirit as possible.
*and fail to
thrill 23 hours ago [-]
Let’s not.
bombcar 21 hours ago [-]
letsnotandsaywedid.net
tbrownaw 19 hours ago [-]
This, um, seems kinda sus. An obvious AI-generated site trying to raise money for something implausible?
abacadaba 21 hours ago [-]
i got 5 on it
president_zippy 20 hours ago [-]
There's a crucial flaw in the dishonest "story" on this little web page of the Green Bay Packers being owned by the public: that "stock" is just a novelty piece of paper that carries no entitlement to a equity in a company.
When the Packers upgrade their stadium and charge higher prices for tickets, I can promise you that they won't use the profits to buy back your shares or pay you a dividend.
westmeal 14 hours ago [-]
How much you wanna bet they're going to take the money and run lol
fragmede 9 hours ago [-]
They're not taking money, people are pledging it.
Rover222 12 hours ago [-]
Isn’t Elizabeth Warren the one who famously killed the merger a couple years ago that would have saved the company?
Warren and Sanders are just reflexively against big businesses.
cuuupid 22 hours ago [-]
This isn't really a scam because no money moves and this is non-binding. Here are a list of glaring issues I see here:
1) Pledges being non-binding means there is no proof of funds. This means they can't actually make an offer, presumably they will have to email everyone who pledged to put in cash and hope it resembles a solid offer.
2) How much is Spirit worth? Their market cap was ~50M a few days before they shut down. Where are we getting 1.75B$ from?
3) Since these are non-binding pledges I'm inclined to believe most of these numbers are bots / fake. Especially as accredited investors skew older and make up less than 1/5th of the population!
4) 666 is a very specific significant number for the average pledge size to consistently stay at. I've watched the number of patrons go up by thousands and yet the average pledge size stay the exact same. The total pledged is certainly fake as a result, although see [3] pretty sure these are all fake numbers.
5) You get nothing in return for your pledge and definitely nothing in return for your money. They go to great lengths to add disclaimers that everything is proposed and subject to change at their discretion.
6) Just like the entire site is AI slop, the disclaimers are too, not worded correctly like regular financial disclaimers, in many places not required and in other places not good enough.
7) They pretend to care a lot about disclaimers and legal verbiage yet there is no mention of the entity or who is working on this bid so missing the most basic mark when it comes to financial disclosure!
8) It says "Spirit didn't fail because people stopped flying. It failed because Wall Street loaded it with debt and extracted every dollar it could." This is just a lie, no matter how Wall Street trades your stock it doesn't affect your treasury. Spirit failed because of horrible financial mismanagement and both an inability to maintain solvency under operating costs (which rose even further recently due to jet fuel shortages) as well as an inability to secure a line of credit. Technically you could also blame their corporate strategy although this was pretty good with the Jet Blue merger, so blame here also lies directly with Elizabeth Warren and Ted Cruz (unlikely duo!) for championing blocking the merger. You can find this from a simple Google search or asking your AI of choice.
9) While we're on the subject of financial mismanagement, whoever wrote this clearly has not much idea of how the finances for something like this would work. _It's not just AI generated — it's AI slop._
10) Whoever made this has no idea whether the assets are actually still there nor do we. Spirit may already be under binding agreements for asset sales.
11) Whoever wrote this also does not understand how companies run. First of all they think they are doing something revolutionary with equity, when almost every company has ESOPs/EIPs. Profit-sharing relative to ownership is also literally how shares work and Spirit already regularly paid these out prior to beginning their financial crisis. Every publicly traded company has open books and openly reports their financials each quarter.
12) "One member, one vote — your voice is equal regardless of pledge size." What incentive would anyone have for pledging more? Also, voice in what? Vote in what?
13) "No golden parachutes — executive pay capped at a fair ratio to median worker pay." First of all, this is not what a golden parachute is. Secondly, either the fair ratio will be ridiculous to allow properly compensating execs, or they will be underpaying by a large margin and find it difficult to get any proper execs in place. Then they can speedrun the last few years of mismanagement at Spirit.
14) "The cooperative model has worked: REI, Ocean Spray, Land O'Lakes, the Packers — all people-owned." These organizations all have well thought out models. This is not the same as AI slop.
15) "Private equity is already circling the wreckage." First of all, Spirit is freely undergoing an asset sale. Their operations etc. are shut down. Not only is this not appetizing to PE, but in general PE firms stay very far away from airlines which are famously low margin difficult to operate businesses with limited potential for growth once established. PE normally focuses on airports and airport services, neither of which Spirit has (their airport assets are limited to slots at LGA which are useless to anyone except airlines). The much more obvious buyer is other airlines looking to expand control and consolidate aircrafts.
16) It is common for a company facing insolvency to shut down, do an asset sale of expensive assets, and then come online in a much smaller form with remaining assets, funding itself with the sold off assets. I don't see why Spirit would not do the same thing, in which case even if a cooperative bid is put together it would be much weaker than disjoint buyers (e.g. Frontier and JetBlue separately buying some aircrafts).
17) Lastly whoever wrote this has absolutely no plan to deal with the high operating costs and failing industry here, which is really much more important than ownership incentive structures. No amount of kumbayah we're all in this together is going to drive jet fuel prices down or change the economics of commercial aviation.
wonnage 21 hours ago [-]
17: don't worry, i'm sure they'll just ask their LLM to figure it out
rootsudo 21 hours ago [-]
Exactly
dukeofdoom 20 hours ago [-]
The "Butthurt" airline, where you fly once remember for a life time. I still remember how much my ass hurt sitting in their seats, and it's been a decade.
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brendanjbond 19 hours ago [-]
Care to elaborate with some evidence that this statement is "mindless populist drivel?"
csallen 8 hours ago [-]
The website tries to paint Spirit as some sort scandal where greedy traders drove it into the ground. Most of Spirit's debt was for financing expensive planes and surviving the pandemic. Literally every airline borrowed to survive the pandemic. Spirit has an ultra thin margin business, trying to compete on price, flying competitive routes, in an industry already known for losing money.
To my knowledge, there was no Wall Street villain here, and the creator of this page just inserted this sentence to arouse populist sentiment, because he/she knows a certain % of the population is primed to unthinkingly accept any narrative that the 1% have ruined something for the 99%.
NetMageSCW 9 hours ago [-]
“Wall Street” doesn’t load companies with debt or extract value from anything.
exabrial 21 hours ago [-]
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Dutchless 11 hours ago [-]
Why not hooking up with a tribal Nations!? I am sure the indigenous nations would be more than excited to help get get a airline back to the people
Dutchless 11 hours ago [-]
Try connecting with the tribal nations!! I'm sure some of them would love to have an opportunity to work on this effort with you!
solomonb 23 hours ago [-]
I have a pitch to buy American Spirits and American airlines to bring back smoking on airplanes. I would be happy to pivot to purchasing Spirit Air.
Spirit was killed by illegal predatory pricing!! There's no reason the corporate criminals who do this stuff would go easy on competition run by different people. The answer is anti-trust enforcement (and related enforcing of the law) and much stronger regulation of businesses in general (if not outright public/government airlines)
Unless this initiative will turn into a credit card company (which nobody likes or wants to do) it won't go anywhere
Private equity will likely sell the company for parts. There is no operational improvements for cash flow that they can do.
Useful watch (skip to 2:20): https://youtu.be/ggUduBmvQ_4?si=cyysP7aH_CIEDZRq
Company makes too little money: "there's no money in this industry! They need to be a regulated utility!"
The core part of air travel doesn’t really feel any different to a bus or metro or train. Off the tarmac then yes it absolutely feels like a Verizon store, as does some of the in-flight service, but there’s always been this weird feeling as a traveler that every carrier is basically the same thing but with different decals on it. Airline alliances are surely the ultimate example of this.
It very much is a different experience than flying a legacy domestic mainline carrier. I’m not alone amongst people i know who will happily fly the cheap seats on United/Delta/AA but won’t even look at a ticket from Spirit or Frontier even at a significant discount.
Compare it to a flag carrier like Singapore air and it is a shockingly different product.
All that’s an aside: we know what regulated airlines look like since we already tried it, much more expensive, with airlines competing not on price but on amenities.
One other difference I can think of is that carry-ons are more rarely included in the base fare in the budget airlines than the legacy airlines, though maybe that has also gone away since the changes where bags must be included in the listed price that Southwest pushed for.
I’m not from the US and have never flown any of the airlines being discussed here.
I’ve never heard of this, is there some YouTube videos you can point me to.
United even has commercials before the safety video; combined with the "if you're watching explicit content on this flight, please mind the children" announcement, those flights onestly honestly felt pretty surreal to me.
The flight attendant also makes an announcement about the United-branded credit cards near the beginning of the flight.
But this is really just an illustration of what the top-poster of this thread said: flying people places doesn't make enough money, so they have to pursue other revenue streams.
Does it not make enough money for viability, or does it not make enough money for sociopath types in C-suites?
If it’s the latter, there will never be enough money for them and will keep pushing increasingly absurd customer-milking initiatives.
United is the closest, with only a 0.04¢ loss on every seat mile.[1] the other airlines lose 1-2¢/mile.
The jets are a loss leader for credit cards.
https://finance.yahoo.com/news/big-airlines-lost-money-flyin...
[1] There's two metrics airlines report: Cost per Available Seat Mile and Passenger Revenue per Available Seat Mile.
This is the cost/revenue for flying a seat, which may or may not be occupied by a person, to a destination. If the seat is empty it gets $0 in revenue but still costs money.
You can calculate the profit made from selling tickets per seat mile by PRASM - CASM.
The cabin crew stand at the front of the plane, and either play a recording or make an announcement saying you can buy a lottery scratchcard for €2 or whatever, with some of the money going to charity. They then walk down the plane "scratchards? scratchcards?"
They repeat this with a collection for charity (no scratchcard), a promoted drink, and some sort of food.
I think this is mostly unique to Ryanair (in Europe), I don't remember Wizz Air, Norwegian or EasyJet doing this. Part of Ryanair's marketing is to make the experience worse than it needs to be, so you know you're saving money.
The only bad upsell they do is in the booking process. Are you sure you don't want a hire car?
If you search "Ryanair scratchcards" you'll see recent news articles about them.
I've used Ryanair once in the previous 5 years, so my experience might be out of date. There was a time my job was taking me to "holiday" destinations for meetings, back then I used Ryanair more often as they often had the only direct route. Maybe the scratchcard sales are more common on those flights.
...while other low-cost carriers try to distinguish themselves by not being quite as bad as Ryanair.
Now Wizzair is "mostly not an airline" for me, because they have all the negative traits I hinted above. E.g. they'll happily advertise flights they have no intention of flying, make refunds hard, are as misleading as they can be about pricing, make it impossible to checkin online a few hours before the flight so that you have to pay their high fees, etc.
I wouldn't want the Ryanair experience for long-haul flights; but for short 2-3h ones within Europe, they're fine, I'm always considering them. Not for the perceived cheapness, but for the "I expect them to actually fly AND be on time" part.
Generally I agree with your view that Ryanair is decent at what it does, but COVID refunds happened only after the regulator stepped in to threaten them over their original "no refunds" and then "refund in the form of a voucher, with a short expiry date on it" policies actually being unlawful, and even allowing for the scale of its operations it received more complaints to the UK CAA than anyone else about refund handling during COVID.
Literally how regulators should work. They look at the outrageous things they try to do and make laws to prevent them. It’s worked very well and also hasn’t ended Ryanair (which is the usual anti regulation argument , that we can’t have cheap things with regulations).
I personally never fly Ryanair because I’ve had to sue them (and won) in the past, they really do suck.
"Wizz; Not the worst airline you've ever flown on"
After they made this change years ago, they said so explicitly in their marketing around continuous improvement.
They have an entire theory of marketing based on people believing that "if it feels cheap, it is cheap", and so they deliberately build in a bunch of annoyances (scratchcards, arbitrary baggage restrictions, checkout hoop-jumping, endless PR about removing toilets or running standing-only flights) which serve to make their service seem as cheap and nasty as possible.
And it works: some people simply ignore the nasty aspects, others are willing to put up with them in order to get a bargain, and yet others actually take pride in wading through the crap - usually expressing it in "I beat the system" terms. And here we are talking about it on a barely-related thread - carrying their marketing message further!
Spirit or another super-low-cost? They don't have the extra air frames and number of flights to do that. You get to wait even longer, losing valuable vacation days (or missing work meetings).
First, as someone with relatively long thighs, I literally don't fit in their sardine can seats. But more relevant to most people, while things may be OK if everything goes perfectly and nothing is delayed or cancelled, you are completely SOL with Spirit/Frontier if something goes wrong (and "something" may just be they themselves decide to cancel an undersold flight at the last minute). It's nearly impossible to get someone to talk to, I feel like the employees know how shitty their companies are so they all have an attitude like they DGAF, and it's a mad (expensive) scramble to find alternative arrangements at the last minute.
I've never had as abysmal experiences as I've had on Frontier compared to any other airline.
But it's great they are not regulated utilities. Because either everyone would have to pay for extra legroom, even if they don't need it, or some freakishly long people would not be able to pay for the extra legroom that they need.
I don't pay a flat fee for my water, electricity, or gas usage, regardless of how much I use. I pay for the gallons, kWh, and therms I actually use. (Yes, there are other fees on those bills, but my usage actually matters.)
Airline regulation doesn't have to specify standardized seat pitch, etc.
I have no difficulty believing you when it comes to customer service. I’ve never had any issues requiring anything beyond the most basic customer service, so I just haven’t been exposed to differences between airlines in that regard. I also understand that a bad experience can leave an exceptionally bad impression. I suppose the only thing that might surprise me is if the higher-cost airlines don’t also have terrible service.
I still avoided them like the plague because the legacy carriers are selling you operational performance and the ability to usually get you where you're going within a reasonable timeframe if you're delayed or canceled. Spirit, Frontier, Allegiant, whoever else, do not do nearly as good a job when something goes wrong. Although they should get a lot of credit - none of them have ever had a fatal crash.
Yes, if you ignore the part where things are different, it's basically the same. Trouble is, those differences do meaningfully make a difference. There's no objective measure for misery and happiness, but flying Jsx is nicer than Spirit. You can put a dollar value on misery, that's why one's so much more expensive than the other.
Also, here in Europe, traditional aircraft carriers have been migrating their quality towards bottom end (ie Swiss not giving any beers for free even on intercontinental flights, microscopic legroom also on intercontinental) while for example Easyjet is for me at this point a high quality reliable carrier with no bullshit. Ryanair is a dumpste3r but luckily they don't serve my nearest airport well.
Never flown one of these, can you describe the difference? Hard agree about what you said about the others.
I’ve not flown them and stick to Alaska and the local puddle jumpers to get off the island.
https://en.wikipedia.org/wiki/Singapore_Airlines
In other words, do we need to make sure everyone can afford to take a flight somewhere?
Or is air travel a luxury that we can allow the market to set a price for?
Maybe flights are simply too cheap, and we should just allow airlines to fail, which will limit supply enough to bring ticket prices back up to a level that is sustainable for airlines as a business.
Of course, this means that a lot of people are going to be priced out of being able to fly places for non-essential reasons. Which, given the environmental impact, might not be a bad thing, although it will make life very different for most people.
Anywhere I can get to by train in the USA I can go faster and cheaper by plane. By bus I can go "cheaper" if I ignore the value of my time and the people offering me meth at the bus-stop.
Worse yet, you buy a ticket for carrier A, then discover that due to xyz partnership agreement you are actually flying on carrier B.
Try flying Delta. It isn’t the cheapest option, but you really do get better service.
If you want to feel special, do Aeromexico first class. The checked bags are waiting for you before you can even walk there on a domestic flight.
Spirit was cheap. And if you’re poor, you need cheap. If you aren’t, buy better service and don’t complain that it’s just Greyhound on a plane.
As long as the required crew of flight attendants doesn't assault me, I've never really got off a plane thinking anything at all about the service. Just "where do I need to go next" or "I'm glad to be home".
Which of the two was the Air Canada experience?
We were clearly in line before their deadline, were certainly going to make it to the gate before they even opened for boarding, had no checked bags, and they made us buy new tickets. The cherry on top was that they ran flights every hour, so we bought the ticket for the next hour but the gate agent let us on the original flight we had- so they basically just forced us to pay double for our flight.
Not arguing against your point, but it astounds me how many airports do not have water-bottle refill stations. My home airport (SFO) does, but many in the US still do not. I feel like that sort of thing should be legally mandated, given we're not permitted to bring water through security. The paltry amount of water they give you on the flight (and at times of their choosing, not yours) is not enough to rehydrate basically anyone.
But I guess I also don't fly much, and I never had to deal with delays or rebooking with them.
The cost of EU passenger rights payouts is vanishingly small on the average ticket if almost all of them arrive as advertised.
Can you enumerate these? As far as I'm aware Ryan Air is basically more "Spirit" than Spirit Airlines.
Also, look at Ryan Air (and Wizz Air) fares. They are consistently the lowest cost per kilometer travelled anywhere in Europe. Sure, it is like a flying bus, but it gets the job done, much cheaper than anything the US.
This doesn't seem to be a antitrust issue at all, it looks like it was one company bailing out another.
https://www.justice.gov/archives/opa/pr/justice-department-s...
“Our win in court is a victory for U.S. travelers who deserve lower prices and better choices,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “We fought this case to protect consumers who, as the court recognized, ‘otherwise would have no voice.’ I am incredibly proud of the Antitrust Division’s team and our state law enforcement partners’ tireless advocacy.”
There is plenty of crap legislation and regulation about, but it doesn’t have to be that way.
I'm not against regulation, I think there are areas where it's needed (privacy is a good example), but it is fire, and fire should only be played with when you really need it because it can easily grow out of control and burn things you don't intend to get burned.
Look what it took to wrangle the cigarette industry. Look how unfettered gambling is ripping through the USA.
Or look at industries pre-regulation. Meat, building construction, medicine...
At minimum we have as much evidence that "the market" is capable of being as bad as "bad regulation."
The angle of treating transportation as regulated utility shifts the business focus away from profit onto providing services, which sometimes can cost more than your income. Similarly, would you close schools, because they didnt make enough money? Airlines are highly subsidized anyway, treating them as regulated utilities falls short of taking public ownership as public institutions, where services just cost money/subsidies.
Yes, of course. We should separate school and state.
> Airlines are highly subsidized anyway, treating them as regulated utilities falls short of taking public ownership as public institutions, where services just cost money/subsidies.
How are they highly subsidized? And where? Perhaps we should fix that, instead of adding to the problem? Two wrongs don't make a right.
Though I admit heavily taxing education on account of negative externalities is tempting.
[1]: https://www.npr.org/2016/04/18/474256366/why-americas-school...
[2]: https://www.nea.org/nea-today/all-news-articles/no-accountab...
Your comments are one-line thoughtless mic-drops, the system is working.
> "If a service cannot be provided for a cost below what someone will pay, the service should not be provided as providing that service is a lose-lose situation."
It can be a win-win situation, not everything is about profit. See also:
> "How did poor people who needed to fly fly when flying was expensive?"
If a poor person can fly somewhere to get a better job, they stop being a poor person. That's a win for them personally, and a win for society, and a win for future government tax income. It's also a win for the airline which moved them and got paid for it. The only time it's not a win is if you have a myopic focus on "but it costs money now and that's bad".
Now what is vital? Is Spirit vital? That’s the hard to define part.
2. "We won't pay for this, but we still want to have it!"
These are of course both fair points. Why should we "pay for" things, what's that all about? We should just naturally have the natural things that we naturally want, supplied by pixies.
If the airline goes bankrupt, that just means that the creditors get less than they otherwise expected. That's something to haggle out between creditors and management and shareholders.
(Or do you want to imply that if the shareholders saved money on CEO compensation, they would give the money to ordinary workers?)
There's no fundamental rule of a capitalist society that consumers have to make their choices out a narrow selection of options provided by corporate oligarchies between the criteria they would prefer to compete on. As a customer, I can choose which airline I want based on whatever criteria I want. Maybe I pick it based on pay ratio between executives and average workers, maybe I pick it based on whichever has the font I like best on their homepage.
Edit: maybe a piñata is a better metaphor. :(
Is this how you see roads? Are we entitled for wanting those to be paid for by the state? What about the police? Should we have to pay whenever a police officer stops a mugging -- or is the wage of that officer, too, supplied by pixies?
https://web.archive.org/web/20040603010444/http://awdal.com/...
So obviously there are theories about how these things can be privately funded. But I can never remember the theories. Looking at that link, it was going to be toll roads. People dislike this, understandably. One problem with private roads is that you can't exactly use a competing road, which might entail moving house, or changing your plans for the day, or your job.
I have a vague notion that roads could be funded by a group of businesses that benefit from them, sort of like the W3C or a mall. Non-profit, sponsored roads, or something. (Now I'm thinking of runestones, several of which are near bridges and say "He made this bridge for his soul" or a similar statement.)
Don't ask me about police, I don't even understand crime and punishment, really.
I should maybe add that I meant "We should just naturally have the natural things that we naturally want" somewhat unironically. I feel that way, the same as anyone else. The difficulty, as observed up the thread, is in working out what's natural, or vital, or wanted and feasible. There are no pixies to magically know the answers, to my regret, only governments, and they only pretend to know. By buying and selling we can almost figure out the answers, contingently and approximately, but a lot goes wrong with that, including the friction of having to do it all the time, and "rent-seeking", whatever defines that really.
Everybody benefits from roads. People who use the roads directly, benefit from being able to move around quickly. Companies which move raw materials around to make products benefit from roads. People who buy products that were moved and delivered by road are benefitting. People who can work because roads enable tourists to come, benefit from them. People whose decent coworkers were once children who were educated by teachers who got to work by road, are benefitting years later. People whose family members didn't suffer a massive property loss because they could call a plumber who got there by road, are benefitting. People who can engage in long distance trade and relationships by post, benefit.
Even though there are people harmed by roads, there's nobody who doesn't benefit from roads.
We have ways to charge people-who-use-roads-more, more money; they pay larger road tax for commercial vehicles, for larger wheelbase vehicles, for larger engine vehicles, they pay more fuel tax because they drive further and buy more fuel, they pay more tax on parts and labour because they wear out their vehicles faster, replace parts and vehicles more often, spend more on mechanic work.
I also don't really want it so that a business owns private roads, and if the road gets a sinkhole and traffic cannot flow, the business can just shrug. If ambulances can't get through, if garbage collection can't happen, if people can't get to work, if companies can't deliver products, the company doesn't have to hurry to fix it. They only care to the extent that their toll income has dropped by one road's worth, but if they fix it within a month or two that might be fast enough for them - but not fast enough for the rest of us to avoid serious consequences.
Good regulation doesn’t completely avoid market mechanisms it tries to tame the more brutal ones in order to maximize return to society. The roads argument is important because without roads we do not have any trade. So by collectively and somewhat proportionally, to use and income, managing the cost of road it makes everything else the market does possible.
Maybe you mean that in desperate situations - such as working out what to do about roads - we might as well resort to government. We do, so I guess you're right.
"The act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth." This is in opposition to profit-seeking, where "entities seek to extract value by engaging in mutually beneficial transactions." https://en.wikipedia.org/wiki/Rent-seeking
Friend, with respect, the mental blocks you're coming up against regarding roads, police, and resource distribution, within an American libertarian framework, are outlining exactly why American libertarianism (unregulated capitalism) is an untenable ideology.
Private roads don't make sense in capitalist framing because there's no possibility of competition - no market for a free hand to move in. Furthermore, there's ethical issues around the fact that roads won't be built to people who aren't as instrumentally valuable to capitalism, which is in opposition to the idea that all humans are equally intrinsically valuable. In plain words: poor people won't get roads built to them, won't be able to work, will get poorer. This is bad, and if you want to just be selfish about it, will lead to crime and social discohesion.
This argument extends to all the resources governments typically involve themselves in: electricity, sewage, water. We have direct evidence that when they try to privatize these things, it goes horribly wrong: see, the American healthcare industry, or, what's happening to the UK as it privatizes sewage. See the Texas privatized power grid.
All capitalist entities (corporations) are simple algorithms: Make profit go up. We like to tell ourselves that making profit go up is possibly only through mutually beneficial trades, aka the aformentioned profit-seeking, however that's not true in practice. The most profitable activity is slavery driven labor, and the most profitable state for a corporation to be in is monopoly. All optimized capitalist behavior selects for and trends towards that activity and that state, and literally the only way to stop this is through establishing some kind of hierarchy that allows for the limiting of corporate behavior - governments, and regulations.
Any example you give of a corporation in capitalism not trending towards slavery or monopoly has one of several explanations. 1. It's regulated, 2. It's led by someone who ethically doesn't want to trend towards slavery or monopoly, or isn't intelligent enough to do so. In the case of 2, that company will eventually be surpassed and consumed by someone with less morals, more intelligence, and more capital (more power).
> "We should just naturally have the natural things that we naturally want" somewhat unironically. I feel that way, the same as anyone else. The difficulty, as observed up the thread, is in working out what's natural, or vital, or wanted and feasible.
I completely agree, and there are other ways to do this other than capitalism, regulated or otherwise. I strongly recommend the most cited economist in history: Karl Marx. Peter Kropotkin is also very good, "The Conquest of Bread" is a great speculation of alternative systems.
The first scenario it harms us by under-serving and scammy practices, the second scenario it’s over-extractive and funneling money from the many to the few.
Whether or not you solve this through regulation, that's up to you.
I'm not sure it's great to have important infrastructure operated this way. Other than regulation do you see a way out?
Hacker News has become simple minded. It's embarassing.
I'm not saying that this a better outcome (power companies have their problems too). I was just commenting that this issue parallels the historical solution that was applied to utility companies.
The whole point of airplanes is that they require no physical infrastructure between point A and point B.
You can have competing power companies generating the power if the grid is owned by the state (or a regulated monopoly). Coincidentally, that is a good mental model for airlines because airports are often state-owned or if not are highly regulated.
That's why the creditors let Spirit die. Their airport slots and gates are more valuable than the rest of the company combined.
So if they tend to compete themselves into oblivion, or need to turn into banks to subsidize their product, then it might make sense that they should be regulated monopolies.
Still you're probably right, if they can turn into banks and stay profitable, then maybe that's a better market outcome overall.
I'd also feel similar I'd my primary water, electricity, or internet provider was on the brink of failing due to "free market pressures".
But also, 'Not necessary' doesn't mean 'not worth subsidizing'.
If you think the government finds value in having a connected population with easy access to information then there's value in subsidizing that. Assume the government valued it at $10 a month per person due to increased economic activity made possible from the information flowing, if the market price for it was $60 a month then you have expanded access to anyone who valued it at at least $50 a month.
You can make the same argument for air travel by the way. Why does the government value consumers flying around the country? Why would the government want to encourage people to fly from Charlotte to Florida to go to disney instead of drive to Pidgeon Forge and go to Dollywood? Or fly to NY 3x a year to see grandma for a weekend instead of drive to NY and see grandma for a whole week 1x a year?
Honestly, with the looming climate crisis, we should probably just let them fail one by one and let alternatives (who can actually be profitable) take off.
You mean every laboring slave.
No free market means corporations are allowed to engage in slavery, chattel or otherwise. Let's be honest about what a free market actually is. Factory towns, lifetime debt bondage.
https://en.wikipedia.org/wiki/Free_State_Project#Free_Town_P...
The "regulation vs. no regulation" stance is the wrong way to look at it. Airlines are still regulated, of course. Maybe some of the regulations we do have are unnecessary, some of the regulations we got rid of we should really bring back, and perhaps there are others that we never had that we need.
My guess is MANY more people fly and are able to afford to fly vs before. There are probably many others things that changed.
It's also very nice to fly.... in first class.
This is absolutely not true. If all the airlines were prohibited from making money with anything else (miles, credit cards) then airfares would rise across the board and there would still be plenty of demand. Not as much, but still plenty.
I'm clearly not the only one who thinks so, judging by both Amtrak ridership statistics and the cost ineffective nature of my attempts to travel on it.
People and goods have travelled around the world long for thousands of years before air air travel and train travel. And people have made decisions above the trade-offs of travel to see family for thousands of years before air travel and train travel.
If air travel was unavailable or unsubsidized, people would continue to make those decisions and life would go on.
Yes, and it really, really sucked back then. And the number of people who could actually do that travel was much, much smaller than today. Air travel (and train travel, to some extent, though it mostly sucks in the US) has enabled people to travel around the globe who never would have been able to in the past.
What a bizarre argument.
I'd love to take some HSR to Austin or Houston or San Antonio from DFW, but I just can't imagine the network to make a train work competitively to get from DFW to NYC or LAX.
But that's a contradiction. If they are valuable, their customers would pay more for their services - that's the definition of valuable. And if their customers would pay more, they could afford higher air fees.
Person 1. "Airline service is more valuable than people will pay for, it's a genuine force multiplier that is unaffordable without being subsidized"
Person 2. "Airlines are not magical, people and goods will move another way, so it doesn't need subsidy".
You: "Airlines are magical. Those things cannot happen another way."
There's three conclusions for what you think: 1) that airlines are special and magical and doing something which cannot be done another way, but that has no value and airlines can go away. That's incoherent. 2) Airlines are both affordable and profitable. That doesn't seem to be true and needs some supporting. 3) Airlines are doing something uniquely 'magically' valuable, they are not profitable, then they need subsidising.
If air travel didn't exist, I likely wouldn't move around the globe at all. Hell, I wouldn't move around the country even.
In the US, roads are mostly publicly-owned (the ultimate subsidy). Local bus and rail transit is usually also publicly-owned, though when it isn't, it's done through public-private partnership and/or subsidy. Regional and long-distance rail is subsidized. Why shouldn't air travel follow the pattern?
Indeed! We don't need air travel when we have perfectly good teams of oxen and covered wagons. We could even hunt and forage for our food along the way to save some money!
Btw you don't need to completely disregard other modes of transport to appreciate bus :)
Of course, we can argue that there are network effects or natural monopoly effects for fixed infrastructure like roads and rails, and thus there must be a public role. However policy rarely seems to remain at this reasonable position and instead quickly expands into something altogether different.
Aren't all modes of transportation in the US either subsidized or public-owned to some degree? We haven't arbitrarily picked one; we picked them all.
Air travel is maybe the least subsidized, though? Essential Air Service is probably the main thing? Long-distance bus like Greyhound is only minimally subsidized too.
But local transit (bus & rail), and regional and long-distance rail are all subsidized or publicly owned in the US. Most roads are publicly-owned, either locally or by the federal government. Long-distance bus and rail are actually unusual in how little they're subsidized.
A car with no gas could still be used to store stuff, or even roll downhill. A car with no land can’t be used at all for anything. And the amount of land required increases with the square of the velocity you want to travel out. But we never add that in.
As far as air travel, I haven’t done the math, but I suspect if you were to add up just the foregone property tax revenue associated with the land underneath the airports you’d end up with some pretty serious numbers.
Anyways, my basic point all of this is the same – we should be careful about subsidies because they tend to distort incentives and decision-making, whether we apply them to airplanes or horse buggies. It doesn’t mean that there’s no place for government involvement in transport, simply that we ought to be wise to the side effects and externalities. I could buy that the government should be involved in air travel, but I part ways with the idea that this should be extended such that if people get used cheap fares on Spirit then the government should guarantee Spirit operation forever. Maybe Spirit was just an anomaly, and we’ll be fine when it’s gone? Some people might fly a little less, some people will just eat the difference and not care, some people will take the bus, some people will buy a car. It’s all just normal people making normal trade-offs about decisions in their life.
But that's hard to do, because for many people/uses, they have to use those roads to get done what they need to do. The alternatives (like high speed rail) just largely don't exist in the US, or are painfully sub-par.
(And no, the market often does not provide.)
https://en.wikipedia.org/wiki/Induced_demand
There kind of is. I can make it from here in Bucharest to Paris in about 3 hours by plane, while by car I'll need about 3 days (i.e. two sleepovers till I get there). This is magical to me. To say nothing of places like the Arabian peninsula or, I don't know, the Indian subcontinent, I wouldn't even think of getting there by car as it is close to impossible (at least when it comes to a land-route to India), but taking a plane is a 6-hour flight from nearby Istanbul to Delhi.
Would love to compare the economic throughput in raw dollars of the Oregon trail vs a single flight route.
Don't forget that the whole point of transportation under capitalism is enabling and stimulating economic activity. So sure, get rid of the airlines if you want to collapse a bunch of economic activity. Personally I'd hope for it to get replaced by high speed rail, but kinda hard to do that when economic activity is highly depressed.
That's.... like a pretty shocking erasure of the idea of a demand curve given the forum here.
To be glib: no, that's not how it works. Increase the price and fewer people will fly, but the demand won't drop to zero. Decrease it and you make less money per ticket but the size of the market is bigger. At some point there is a local maximum, to which the market seeks.
But conditions change occasionally and the equivalent supply curve is moving rapidly because of the oil shock (i.e. it's more expensive to put planes in the air to service tickets you already sold). And things like the mess with Spirit are what happens when the market readjusts: the rest of the industry will (probably) backfill some of the lost capacity, but not all of it, and prices will (probably) rise a bit to a new equilibrium.
Like what?
Nearly all 'goods' are going to travel more efficiently by rail and truck. And I say nearly all to cover the outliers like maybe an organ flying across country for transplant.
So if it's not the distribution method of choice for goods, then leisure? It's probably a global positive if people fly less. People will end up going to more local vacation destinations instead of aggregating all of those resources into a few popular locations that end up being massively overcrowded. This in turn reduces carbon impact because driving 3 hours is significantly less impactful than flying for 3 hours.
If you are just talking about all of the labor that has built up to support this inefficient and wasteful enterprise, that's probably for the best to reallocate that labor elsewhere. It will happen eventually, unless you think cheap oil is a permamenent feature, so why not happen sooner than later?
Because the majority of the HN crowd defaults to "a massive government bureaucracy would do this better" unless it's even tangentially related to their industry in which case it's "regulations bad" and "move fast break things."
For a much deeper dive on this, see https://www.complexsystemspodcast.com/episodes/gary-leff-fre...
(there's a well-formatted text transcript)
This sort of thing all the time when (for example) a movie lover opens a movie theater. Running a profitable movie theater is a lot less about movies and a lot more about maximizing concession revenue.
American Airlines has the largest loyalty program.
In last week’s report to shareholders they project it will grow to $1.5B in pre tax revenue, against a total 2025 pre tax revenue of $54bn (50bn passenger revenue).
The core business of airlines is still airlines. Optimizing TRASM & CASM, with tremendous effort on upsell and cross sell of premium services (seats, bags, food), at every point in the passenger flow.
This is true for American Airlines: https://viewfromthewing.com/new-report-says-aadvantage-is-wo...
McDonalds -> leasing land to franchisees. Private equity -> saddling existing business with debt while chopping them up for parts. Stock markets -> pump and dumps. Selling anything -> rewards programs and branded CCs. Car dealerships -> captive audience for servicing. Owning real estate with the goal of leasing it out -> speculation on its value.
But just because it is made up doesn't mean it isn't real.
Best not to generalize.
The RyanAir CEO was even quoted that he expected some tickets to be come "zero-fare" Link: https://www.theguardian.com/business/2016/nov/22/ryanair-fli...
The point stands, airlines don't make money on flights. Flights are loss leaders.
I pointed out the simple fact that Ryanair can't be considered a counterexample to airlines tending not to make money on flights since it relies on upsells to make a profit.
Spirit was designed to be ultra low cost, which attracts flyers that are much more price sensitive. Higher Jet A costs means higher ticket prices, which means lost customers, which means lost revenue. Pulling a JetBlue and adding higher tier product offerings to attract the business travelers that _actually_ makes money for airlines would've required an overhaul of their entire business, which they couldn't afford to do.
I agree that Spirit will be chopped up by whoever buys them. It happened to Braniff, PanAm, and a whole bunch of other airlines that weren't thrown a lifeline.
(JetBlue tried to acquire Spirit to prevent this outcome, but the acquisition didn't pass antitrust. Everyone knew that that acquisiton failing was a death sentence to Spirit, but it was what it was.)
But that's not necessarily a bad thing. If the company is worth more to the market and society when sold as pieces, so be it.
It sounds like there’s a problem with having too many flights that are barely full and hence unprofitable. AFAIK the federal gov spends significant money subsidising many “small airport” routes even if they’re barely used.
Spirit and the other LCC’s problem is that the legacy airlines are now offering a similar product in their basic economy that has less hassle, higher frequency, is sometimes eligible for earnings on their massive loyalty programs, etc.
Before them Alaska Air was similar, and is now similarly bad.
Having the customers actually own the airline seems like a reasonable approach. The trick is kicking all the assholes off the board, so they can’t fire leadership for treating customers decently while turning a sustainable profit.
I can't fathom how this airline was allowed to keep existing.
However, if you wait till your competition goes broke, you need to ensure you survive long enough and stay big enough so you don't get bought. That's not exactly easy.
I wonder if this will be the next "market" to exploit if ad revenue ever dies down too much, or if it's one that's always been there, and I've simply never been a part of.
If that's the case then how RyanAir survived and is thriving?
Some flights make money.
Some flights lose money.
Some finance structures make money while looking like losses to acrue tax benefits for other activities.
Sometimes the money is being made by holding companies not operating companies. Sometimes the assets are worth more as spares than operating.
All companies are complex. I do not think "flights don't make money" is true for all airlines, all flights.
Air France, British Airways, Finnair, Turkish Airlines, just to name a few, all have miles programs.
They just aren't tied to credit cards because the EU caps interchange fees to 0.3%, so there simply isn't enough money to have a meaningful credit card point system.
[1] https://en.wikipedia.org/wiki/Civil_Aeronautics_Board
What's your point?
Did airlines get cheaper due to deregulation or because technology and engineering made operating them cheaper?
Case in point: Old Perry Mason shows where characters regularly drive to the airport, pay for a ticket and get on a plane. Flying was actually faster than driving back then, even when measured by time between deciding to leave and arriving at destination!
(Yes, tickets used to cost a bit more. Whatever. Figure in the price for camping in the airport for 4-5 hours, and then tell me the current system is cheaper!)
Tickets used to cost 4-8x what they cost now, depending on route. It wasn't a couple percent extra. A lot of what made flying seem like such a glamorous activity was that everyone but the upper classes was excluded.
An economy class round trip from the US to Japan in the 1970s with Pan-Am was $8,900 in 2026 dollars. About $15,000 if you flew first class.
Deregulation also allowed international carriers to sell to us too. An ANA round-trip on economy class is a couple hundred dollars cheaper. Their business class is similarly cheaper than Delta One.
Air travel is so much cheaper than it was back then that it is affordable for most people to take one international trip a year if they really want to. Even to exotic places in Asia or Southern Europe.
But you have to follow the same model: use cheaper airports, a single modern aircraft type to simplify operations, high turnaround speed, charge a lot for extras.
Southwest has 30B in assets and makes $441M in profit. Like most airlines it’s a miracle of modern economics and should practically be considered a charity or a nonprofit. You would make more in treasuries or corporate bonds.
https://en.wikipedia.org/wiki/Largest_airlines_in_the_world
Obviously their model is different to the big American carriers. Perhaps there’s something about the homogeneity of the US domestic market compared to the EU market that favors loyalty based airlines versus budget airlines.
It suggests we'd be better of eliminating the absurdly high hidden taxes paid to the credit card companies, that in turn act to gamify the business. In the end they raise the cost of doing business, for virtually no benefit at all. It's a monopoly extracting as much wealth they can get away with.
The question at the heart of this: How can "the shining light on a hill" be so stupid? It's digging its own demise.
Traditional airlines are very much like Starbucks nowadays in that they are essentially banks, but low cost carriers are closer to movie theaters where they essentially make nothing selling the actual seat so the more people they get in the door, the more they can make on ancillaries.
Member-owned co-ops don't need to make money. Structuring an airline as a member-owned co-op is not a fundamentally-stupid idea.
Spirit has been doing this since it's inception. The collapse of their business can't be through lack of this alone.
I don't get it. Why should they have been turned into utilities? Just because the current iteration loses money?
Please be aware that airline pricing is endogenous. That means, it's not set from the outside, but a reaction to market conditions and feeds back into market conditions. Eg airlines might be on the edge of profitability at time X, but when at time Y fuel prices drop a bit (or rise a bit) that doesn't mean that airline will suddenly all make lots of money (or all go bankrupt): the pricing of their product will adjust.
That doesn't only go for fuel prices, but also for loyalty programme revenue. If such revenue is available and competition is fierce, then prices will go down until airline can just about stay afloat after taking that extra revenue into account.
> Private equity will likely sell the company for parts.
You say that like it's a bad thing.
Regulation won't magically save low margin businesses.
Nationalizing might, but then you make it difficult to compete for others. And of course, there's plenty of precedence of nationalized airlines failing catastrophically and having to be sold off to private or foreign entities to keep functioning.
Even in this "airlines as point program companies" view of the world, flights don't make money in the same way that electricity going into data centers don't make money. It's a place where you have major costs and you want to try and gamify it, but at the end of the day it's pretty necessary for successful operations!
Consider why airline points even work as a model in the first place! Airlines have blackout dates and don't offer every seat in a plane for points because _they can make money selling a seat for more than what the points are worth to them_.
Enough money for who? One person has a pay package north of $30 million.
I heavily doubt PE firms are interested here as there is no potential for growth or a multiple. Spirit's assets are mainly their fleet, there are like 4 maybe 5 people who could buy, of these 2-3 are facing similar financial crises.
In the US I think nobody except United can afford to make a move, more likely some Asian airlines will move; many have grown and have route demand they can't service due to lack of aircraft. If you fly to Asia often you'll note that much of the time Asian airlines have to operate an aircraft from a US airline.
If they can build a model similar to REI, count me in.
They used to be. Read up on "Civil Aeronautics Board".
"If you want to be a millionaire, start with a billion dollars and launch a new airline."
https://youtu.be/ggUduBmvQ_4?t=2m20s
Bonus: auto-jumps to 2:20
yeah in the US airlines are fintechs.
There's another more fundamental problem with airlines like Spirit, which is they can't effectively make this change. Loyalty programs / credit card tiers require differentiated service. This is one of the drivers for why Southwest changed their entire seating model to match the other big players in the industry even though their Ops data showed faster boarding times using unassigned seating.
When you're on the lower tier of the market like Southwest and other budget airlines, creating differentiated service mostly means making things worse for most passengers, not better, in order to have loyalty programs provide a pathway to avoid the suck.
Don't know where I read that, but it seems apropos.
Unions are one of the more effective ways for workers to fight back against "divide and conquer". Unions work to slightly adress the massive power imbalance between employer and employee; that's why the wealthy hate them and spread negative propaganda about them.
Be sure to actually go read the read the contracts and what they contain.
I primarily use my favorite's airlines credit card because it gives me perks such as priority seating, and free checked bags. I am pretty certain that the credit card fees (that is passed on to the merchant) does not come close to the value that I gain for my credit card loyalty. It is a stupid game that I am forced to play, because the credit cards also provide other benefits, such as fraud protection.
I am wondering right now if "Spirit Air 2.0" even has a fighting chance if they are not able to subsidize operating costs by also being a credit card company.
[1] https://www.thestreet.com/personal-finance/delta-air-lines-m...
Just to be clear, that isn't what the article says. It says more than what "most" airlines generate in ticket sales. Not Delta, or any major US carrier. As interesting as that sounds, it couldn't logically make sense and it only represents about 15% of Delta's revenue. It's not even a straightforward revenue stream, it works for profitability because they are able to book most of the revenue immediately and able to mark down the future expense because of how loyalty rewards are obligated.
It's really just a surprising morph of their economic model in the post regulation era.
You are not forced to play it. That is a just story you tell yourself. You can make a different choice.
You're subsidizing everyone else if you're not trying to get the best loyalty program.
Quite the mentality...
You’re taking a 2%+ loss on every purchase if you’re not playing the game. But you better carry debit cards and cash because some vendors charge extra for credit cards, and some charge extra for using cards at all!
Here is a decent video explaining it https://www.youtube.com/watch?v=ggUduBmvQ_4
That's a reason to have an airline credit card, it's not a reason to use it (other than for purchasing that airline's tickets)
Anyway, point is they failed and went under and my recollection is that just selling gasoline alone was not profitable. The extra coin comes from selling snacks, beer, smokes, etc.
And it was Swifty - definitely a no frills experiences!
this isn't unique to airlines. this applies to all exceptionally mature companies/industries who believe there is no more room for growth. any significant profit they make gets paid out as dividends to investors who then put the money elsewhere instead of reinvesting into the company
Generally it's the interchange fees that fund reward programs (charged between banks), not the merchant fee.
https://stripe.com/au/resources/more/interchange-fees-101-wh...
It generally depends on the contract the merchant has with payment provider:
- some have relatively high merchant fees to cover for interchange fees
- others (generally called IC+) have the merchant pay the IC fee plus some other (generally much smaller) fee to the payment provider
In both cases it's the merchant that ends up paying them. It's not a concidence that in Europe (where there are caps to IC fees) the fees that merchants pay are generally lower.
The $8.2billion from American express pays basically is buying tickets and ticket extra, it buys them some points, lets ignore multiples for now, it buys them 8.2billion points, which they give to customers which then buys tickets.
If Spirit accepts USDC instead it wouldn't be that much different.
Other airlines also have cramped sits, what little they did better than Spirit isn't worth the price, and the experience was inconsistent: some times you'll get nice flight attendants, a comfy plane, and a good check-in/check-out, other times you didn't. can't plan around them. With Spirit I could plan around exactly how bad my experience would be reliably. Just about any inconvenience was some fee away to address it.
Frontier was the cheap airline that just wasn't worth it. On the flip side, AA was overpriced with snobbish (just my experience, very limited) staff. Because it's a "cheap" airline, Spirit came with low expectations, and it only exceeded them to the most part.
I shop at walmart compared to whole foods and other "better" chains for similar reasons. "great value" as walmart's motto goes, it isn't about the price, it's about the value you get for what you pay for. Spirit was the "great value" airline.
I don't think this effort to buy it will prevail, I only wish the GME betters were in on this action. The airline's value hasn't gone away, similar to Gamestop. The people like it, the demand for it there, the airlines assets and staff haven't lost their value. I don't see how it isn't a good investment. This attempt to buy it is to little, too late. but if it came in actual stock purchase agreements, I'm down for it. But donating random cash to some site as a pledge, I don't know about that.
So much this. I regret that I have but one upvote to give.
- People using devices without headphones
- People having loud phone calls on speakerphone with vulgar language
- People with bad body odor
- People looking to optimize their outcomes, even at the expense of others and net deleterious. (Speaking in numbers, willing to take +1 point of selfish outcome at the cost of several others' -1 leaving a net negative for the group)
I always wondered who paid for that.
I had much worse experiences with Frontier and promised myself never to fly them again. On one occasion we had to wait for 2h on the plane on tarmac after landing at MacArthur airport because... the airport staff was not responding to pilots' calls. Somehow they didn't know the plane was landing. It was 1 AM or so and while it might not have been Frontier's fault, to not be able to sort it out for 2 hours was telling. Had other issues, too, this one was most ridiculous.
I liked Spirit, though, great cost savings, and I didn't mind the minor inconveniences that came with it.
Aside from being known for being a cheap airline, the brand itself was pretty solid... I think it had everything working to its advantage. The bright yellow exteriors of the planes, a catchy name. I think people knew exactly what Spirit was and what they offered, which is the sign of a good brand.
wait a minute... what if?
Talk about damning with faint praise
The only people surprised by Spirit were people who don't read warning labels and then you should only be surprised once. Heck, I paid 3$ for coffee on spirit but they would gladly bring refills and were proactive about almost like a restaurant. On AA and United, you usually had to go up and ask.
On top of that, you could get the big front seat (tm) which wasn't first class but pretty good about 150$ if you waited until your flight to bid. I got it a bunch and it came with free snacks and drinks and it was much cheaper than buying business
I'm gonna miss it.
https://www.yahoo.com/news/articles/american-airlines-worst-...
This is exactly why I would never be caught dead on Spirit. Sartre got it right, "Hell is other people." My issue with Spirit and other budget airlines as a frequent traveler was never about the planes, the staff, or the operations, it was always the other passengers. It's bad enough dealing with people in general in the circumstances we all find ourselves in stuffed into an airplane, but budget airline travelers are generally exactly the sort of folks who ride the bus, which is why nobody wants to ride the bus in the US.
I say all this as someone who enjoys public transport when I'm in Europe and has no problem flying budget airlines in Europe like KLM Cityhopper or EuroWings, because everyone across society uses public transport and budget point airlines in Europe. In the US though, public transport and budget airlines are nearly only used by people who you'd rather not be stuck near for hours at a time for fear of being attacked, coughed on, or otherwise somehow harmed even if minimally which is entirely avoidable by just not.
I would rather deal with someone putting up their nasty leg on the chair next to me, or listen to a movie with speaker on for the whole flight, than deal with rude flight attendants that won't respond to my needs, or dirty looks from other passengers because I'm wearing something comfortable.
Aside from what I see on social media posts though, I've never seen anything extreme like that flying on spirit in all the years.
Yeah it's not a secret that you can get by in life on the cheap if you have cheap, trashy tastes.
And you sort of made another point I had: people like you, and companies who cater to people like you come with all that haughty snobbishness that's just unpleasant and degrades the experience. Good taste has to do with appreciation of value and quality, not polishing of one's ego, or pretending you're superior to others.
Noble, but this will fail. Why would anyone do this? No incentive.
These sorts of initiatives forget the toil of actually operating a business. You might as well get more pledges given that you'd have more control and the same profit share. It will regress to the same as the status quo.
> These sorts of initiatives forget the toil of actually operating a business.
For most businesses the size of Spirit Airlines, the owners typically do not operate the business. They pay people to do that. I don’t operate REI, even though I’m one of its many owners.
I've no idea if the proponents of this plan are reputable, but the concept reminds me of the early years of WestJet, when they made a big fuss about being employee owned and had (back then) a markedly better customer experience. For US residents reading this, I'm told they were a bit like Southwest Airlines.
Even if the naysayers are correct and the probability of this panning out is low, you'll never hit the pitches you don't swing at, right?
https://en.wikipedia.org/wiki/List_of_government-owned_airli...
Also, any evidence or reason to believe that an extraction-based capitalist model is more aligned with customer interests (where the customer is the thing value is extracted from, and where corporate leadership salaries are directly tied to how much they can grift from the customers) than a government where the incentive is to get the maximum number of happy fliers to vote for you?
Or the government may want to give their airline unfair advantages, which would decrease real competition and create a brittle industry. Or the government might want to strangle their own company, in order to declare that it is “bad and dumb” in order to manufacture popular support to privatize the public company.
One could make an argument that "Well look, it was costing the government taxpayer money!", and that's a valid point. But given how little the variation in prices are across airlines in India, it's similar to saying "The govt shouldn't do public transport if it loses money, even if society gains".
Customers hated them. They were top examples of when public management fails. They were expensive for the customers and costed the tax payers billions to be kept alive, and basically everyone rejoiced when they were let go (Alitalia being reborn as ITA Airways and effectively operated by Lufthansa, Malev just disappeared).
The problem with state run enterprises is that the accountability to voters is very removed. You elect parliament and government which chooses some administrator at random times which chooses some managers etc..
It's not impossible to do well (many state run companies are fine!) but it's hardly a guarantee.
Just recently HN discussed the „ban anonymity on the internet“ initiatives of various governments and who was behind it because nobody wants that. Certainly not the citizens.
Yeah! They're doing their best! They definitely aren't fascist stooges trying to expand the surveillance state.
The masses are mostly inert, elites and counter elites move the needle. Those who can manufacture consent win.
Like, all people in the world?
Customers? Employees?
What does this mean?
EDIT: It’s shareholders, but each person has one vote regardless of share count.
Focusing strictly on shareholders (value) has been en vogue since the 1970s:
* https://en.wikipedia.org/wiki/Friedman_doctrine
Before that the general thinking was along the lines of:
* https://en.wikipedia.org/wiki/Stakeholder_theory
Somehow companies managed to survive and grow before the 1970s.
It's been in vogue, in circles, since the 17th century. We're not talking about for-profit structures here.
"Investor heterogeneity" is a thing.
There is no Platonic "shareholder" with one set of needs.
If you assume there is an airplane — great, run the airline for the customers and employees. But the cost of the airplane can’t be handwaved away.
MEC was the only co-op I have ever been part of. I'm pretty sure they stopped being a co-op and sold it to private equity.
See perhaps: https://en.wikipedia.org/wiki/Consumers%27_co-operative
Fidelity is still better in some metrics, however.
It sounds more like a credit union. (first $5 goes to your ownership share / vote, and the rest of your money goes to your account).
I'll lay out the specifics here from what I learned. I'm not convinced either way, yet, that it could work for an airline.
So here's the ownership structure:
- Co-op Refinery Complex (CRC) - produces fuel
- Federated Co-operatives (FCL) - owns the refinery, also owns food and agriculture distribution warehouses, negotiates bulk pricing
- 200-ish independent regional Co-ops jointly own FCL
The CRC is highly profitable. FCL is profitable. The independent regional co-ops are not, on their own, all individually profitable. Some of these exist in small rural centres, some of them exist in larger cities. The urban ones are generally profitable, the smaller ones not so much. The rural ones, though, are largely the lifebloods of their communities; it's not unusual for the Co-op Grocery Store and Co-op Gas Station to be the only sources of food and fuel for miles and miles. While these do sometimes run at a loss, they make up for it with their annual Patronage cheques from FCL: when the CRC makes a profit and when FCL makes a profit (from the CRC and from their distribution network), those profits get returned back to the member co-ops on a pro rata basis: buy more from FCL, get more at the end of the year.
At the far tail end, each of these independent co-ops is a member-owned co-op. At the end of the year I end up getting a patronage cheque based on how much fuel, food, and building supplies I bought that year. It's not large, but getting a $100 cheque in the mail is always nice :).
In this situation, though, it all works because the not-so-profitable pieces own both their upstream wholesalers and a crazy-profitable refinery. (The refinery sells to other customers outside of FCL as well).
One of the other critical pieces that the strike/lockout/overall "labour dispute" really made clear to everyone: the independent Co-ops, FCL, and the upstream CRC are all member-owned co-ops, not worker-owned co-ops.
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So let's look at how an airline co-op might be structured. The first parallel that I could see would be flipping the regional airline model on its head; currently the big players like Delta and United run a bunch of their smaller routes through regionals (SkyWest, Republic, etc). If a bunch of them got together, they could in theory jointly one one of the majors. The wrinkle there, as others have pointed out, the majors aren't profitable as airlines, but rather through their credit cards and loyalty programs. Alternative, then? Do a bunch of regionals get together and buy a bank? Let the bank be profitable, let the major airline handle traffic between the regional hubs?
I know quite a bit less about worker-owned co-ops, but generally speaking aviation is incredibly capital intensive. Starting a worker-owned co-op airline is probably not possible. A single, say, 737 Max 8 costs $121M. That capital's gotta come from somewhere.
Are you thinking worker co-op or member co-op?
Spirit as an asset is worth less than $0. Buying it would be a commitment to set money on fire for a decade.
But I'm just not sure the demand would be there for longer distances unless it's so cheap that it's worth the extra time.
Like what's China to Kunmung, a 6 hour flight vs a 12 hour train, at a comparable cost?
If you offer me the same price for flying than for taking the high speed train, I'll take the train every time.
In practice it'll take less travel time, no security lines or theater (no problem bringing your water bottle or whatever), you can bring more luggage, you can stand up/walk/visit the bar during the trip, you go from city center to city center so you don't have to spend an extra in taxis... I just arrive there 20-30 minutes before the train leaves and that's all.
Even with Japanese level high speed rail NYC to LA still takes much much longer than flying.
You need to buy land. Disrupt wildlife, and various ecosystems.
The government should of bailed out Spirit instead. They served a public good.
Allowing lower to middle income people to travel helps everyone.
So, it's at least technically possible.
China is doing R&D on a partial-vacuum train (basically Musk's hyperloop thing) with a target of 1,243 mph[1]. That's probably a pipe dream, but worth mentioning nonetheless.
> The government should of [sic] bailed out Spirit instead.
I'd be okay with this if all the taxpayers were granted equal shares that their collective money could have purchased at an imputed no-bailout price.
0: L0 Series SCMaglev
1: T-Flight train
What's your source for this? I take this flight a lot and I find it hard to believe it's more than 5.5-5.75 on average. Looking at the last few weeks for one of them[0] supports my experience.
Maybe your number has TSA/airport time included.
[0] https://www.flightradar24.com/data/flights/ua1777
According to Gemini this hypothetical train would take about 18 hours.
It would also cost hundreds of billions of dollars and a decade to build.
Doesn't do much for seeing Uncle John next Tuesday.
I like trains. I like them a lot. But they don't work over long distances. Particular when you have dozens of state and city jurisdictions to cross.
Each of them get a vote.
Honestly I'd be happy just to have quality HSR on the East Coast. Boston to Richmond takes like 12 hours right now.
Maybe the West Coast could get a Seattle to San Diego route.
You just described the building of the interstate highway system, but I doubt there’s a person alive who would say it wasn’t worthwhile.
I fear Americans are simple to selfish to have any desire to do time consuming expensive things that will improve their country long term. They just want benefits for themselves , now.
Meanwhile, the government could announce a bailout of Spirit tonight.
Wouldn't take nearly as much effort.
Good ol Zoidberg once again says “why not both?”
If you don’t fix anything else until healthcare is fixed, you’ll be fixing nothing until the end of time
What's that saying about idle hands.
Jobs root people to their communities and give them purpose in life.
> *0* hedge fund owners. Zero
or including the date Spirit collapsed (despite already mentioning it earlier on the page!). Why not also include “*6* letters in ‘Spirit’” while you’re at it?
whether it's an llm, a template or bespoke made from bytecode doesn't really matter does it?
The cooperative was born out of exploitation: farmers in Kheda, Gujarat, were forced to supply milk to Polson Dairy, which held a monopoly and paid farmers unfairly through commission-taking agents.
AMUL returns 85% of every rupee earned back to farmers — far above the global average of 33% — and procures milk at rates 15–20% higher than private dairies.
AMUL's democratic governance ensures farmers elect board members who represent their interests, and the Managing Director of each unit is appointed by this farmer-led board — not the state government — preventing political interference and corruption.
AMUL demonstrates how a business can achieve large-scale commercial success while prioritising social justice and environmental care — through collective ownership, democratic governance, equitable profit-sharing, and community investment — offering a powerful model for cooperatives worldwide.
They probably believe they'll get more money back from selling the aircraft. If American or United want a new airplane they place an order and wait 5 or more years for delivery. No airline has excess airplanes available to take new routes. They are so expensive just a handful being idle (outside of expected maintenance winodws) would erase all profit. That means if there is a new opportunity it can take a very long time to go after it.
Airlines from around the world will line up to buy every single one of Spirit's airplanes because it means they can have one _today_. A few might even pay premium prices for them.
Airlines are a cyclical business. Boeing and Airbus gobble up every spare dollar on the back end and customer pressure eats up the front end. Then you're subject to all sorts of random shocks outside your control without much ability to adjust your fixed costs. A difficult business to be in.
How could it do anything but fail?
totalMembers: 4954
totalPledged: 5678872
averagePledge: 1146.320549
However the numbers on the website appear to be hardcoded in with very dramatically different numbers.
From skimming, I see at least 5 places where this is reiterated on the page.
I'm surprised they don't also include a team page with a bunch of ChatGPT-generated photographs of fresh-faced fake people to really sell it.
Spirit was an objectively terrible airline. Their business model failed. They folded. The end. This is why you can't fly Braniff or Southern Airways anymore in 2026. Failed businesses go under, they don't live on in perpetuity.
1) Revenue/Route management: re-think the routes with a ruthless focus on sustainable routes with defensible margins.
2) Customer experience and Brand: being an LCC can't come at the expense of customers, i.e., the fare is so cheap we get to treat you like shit.
3) Capital-structure & cost base: you need to right-size the debt, fix liquidity, and ensure you have a durable cost structure (fuel-risk management, etc.)
I like the approach Bob's Red Mill took.
A period documentary about the Meridian Triumph motorcycles co op. Sad, thoughtful take on a particular bit of British manufacturing history. That the co op started with a strike, had to trade exclusively with a single customer, and that the senior workers became the managers they hated.
Due to the structure of that co op there was no way for them to access the capital they needed to redevelop their products and it ended up in private hands as a result, leaving the workers with nothing. I don’t think I would wish a co op on anybody.
To be clear, the proposed Spirit Air 2.0 would also be answerable to shareholders. A structural difference is that each shareholder would have one vote regardless of capital contribution. But the real substantive difference is the spirit of what they’re fighting for: worker ownership, affordable fares, transparent operations, no golden parachutes, etc.
Bullhockey. Wall Street doesn’t assign debt. Poor management and bad risk-assessment leads to assuming bad debt.
This is like saying it’s the car’s fault that you drove to work today…
The argument I have seen is that blocking it resulted in Spirit dying and people losing their jobs and there being less competition.
Wouldn’t the same exact thing have happened regardless? Am i supposed to believe that Jet Blue would have kept all of those employees? There would be one less competitor anyway, and in the merger case they’re even more powerful now meaning competing is harder.
It seems to me it’s just that creditors want to be paid out by a merger rather than paid our for cents on the dollar when it died on it’s own.
No idea if the extra time "normal" fuel prices would have allowed Spirit to find a way to stay afloat, but the fuel price spike stole any time they had to figure it out.
https://www.reddit.com/r/charts/comments/1psiwws/us_airlines...
There's no way they could get away with something significantly different, right? Like anything else they'd just be liable for being sued?
If it would be TWA or PanAm my reaction would be positive.
Nobody is buying spirit air... a bunch of gamblers just want to pump the price monday morning.
- Warren Buffett (Comedian)
Brilliant.
On Our maiden voyage aboard spirit, they dumped us halfway home, in las vegas. No compensation, no meal voucher, no overnight accomodation - they just DUMPED US (along with 30 other connecting passengers).
Spirit seems incapable of holding a flight even 5 mins for connecting passengers delayed via spirit's incompetence!
We saw them slam the door 50FT away to our connecting plane as we got off our plane. We watched in horror - our faces against the airport glass - as our next-leg pilot looked up at us and sat on the tarmac 30ft away doing NOTHING for 20 minutes as Spirit told us "nothing could be done" and "you missed your connecting flight" and "see the agent to get DUMPED AND NOTHING, later".
The employees are all gone and shuttered, even if you go try to rehire them they are all jumping to any other company if they stayed to the end. The pilots and cabin crew lost seniority and you won’t be able to afford ALPA union pay or AFA pay.
So while they somehow raised 26 million, it feels like a hollow gesture so that the creditors get paid but not really be realized into an actual airline with an AOC
At 26 million raised it’s actually better to make a new airline and run it lean. Get a good route or two and it could work, but 26 million is lean but doable. The liquidators want to get spirt planes released asap.
Plus, it's a carbon-polluting business that props up dirty, corrupt petrochem industries and regimes.
Let it die.
One of the creditors that piloted their exit from the first bankruptcy also provided on $80M out of a $270M line of credit secured by assets Spirit needed to survive (an RCF was backed by their right to take-off and land at LGA amoungst other thinfs)
1 week before the 2nd bankruptcy, Spirit drew against the entirety of that line of credit.
During the 2nd bankruptcy, besides rolling large amounts the debt owed to them from the 1st bankruptcy (so Spirit would need to pay it back before other creditors), they had the proceeds of plane sales go towards... interest payments on their RCF and paying back additional financing from the 2nd bankruptcy.
The creditors leading the 2nd bankruptcy also sold the lease to Spirit's largest hangar on April 2nd, but did a similar thing again: instead of the cash going towards operations, it went to the creditors who'd led both bankruptcies.
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Seeing as they refused the government's bailout, I'm guessing this is doomed as well, but interesting stuff for a non-finance person
I was doing a two hour flight monthly for business, 2 hours each way. Frontier was about half the cost of more premium airlines. The times were good and predictable. I never checked anything and maybe rarely I’d buy a snack. Now I won’t claim that it was “comfortable” but it was predictable, inexpensive and kind of efficient all of which sort of creates a ‘comfort.’ It was a flying bus and it was ok at that.
Somewhere, I think when there became competition for the ultra discount airlines, the staff culture changed and it seemed not uncommon to encounter an employee that resented the customers. Spirit had multiple reported incidents of crew filming customers and just being generally antagonistic. Basically they hire service people that generally don’t have to provide much service and it becomes ”extra work” when they do;worse they often see a price tag associated with the “extra work” and it’s not reflected in their compensation
And it was cheap, so you could book a next day flight without paying multiples in premium.
It was fun and affordable to fly out of state in the morning, spend a day exploring another place and get back at night.
Great idea in theory but…
*and fail to
When the Packers upgrade their stadium and charge higher prices for tickets, I can promise you that they won't use the profits to buy back your shares or pay you a dividend.
Warren and Sanders are just reflexively against big businesses.
1) Pledges being non-binding means there is no proof of funds. This means they can't actually make an offer, presumably they will have to email everyone who pledged to put in cash and hope it resembles a solid offer.
2) How much is Spirit worth? Their market cap was ~50M a few days before they shut down. Where are we getting 1.75B$ from?
3) Since these are non-binding pledges I'm inclined to believe most of these numbers are bots / fake. Especially as accredited investors skew older and make up less than 1/5th of the population!
4) 666 is a very specific significant number for the average pledge size to consistently stay at. I've watched the number of patrons go up by thousands and yet the average pledge size stay the exact same. The total pledged is certainly fake as a result, although see [3] pretty sure these are all fake numbers.
5) You get nothing in return for your pledge and definitely nothing in return for your money. They go to great lengths to add disclaimers that everything is proposed and subject to change at their discretion.
6) Just like the entire site is AI slop, the disclaimers are too, not worded correctly like regular financial disclaimers, in many places not required and in other places not good enough.
7) They pretend to care a lot about disclaimers and legal verbiage yet there is no mention of the entity or who is working on this bid so missing the most basic mark when it comes to financial disclosure!
8) It says "Spirit didn't fail because people stopped flying. It failed because Wall Street loaded it with debt and extracted every dollar it could." This is just a lie, no matter how Wall Street trades your stock it doesn't affect your treasury. Spirit failed because of horrible financial mismanagement and both an inability to maintain solvency under operating costs (which rose even further recently due to jet fuel shortages) as well as an inability to secure a line of credit. Technically you could also blame their corporate strategy although this was pretty good with the Jet Blue merger, so blame here also lies directly with Elizabeth Warren and Ted Cruz (unlikely duo!) for championing blocking the merger. You can find this from a simple Google search or asking your AI of choice.
9) While we're on the subject of financial mismanagement, whoever wrote this clearly has not much idea of how the finances for something like this would work. _It's not just AI generated — it's AI slop._
10) Whoever made this has no idea whether the assets are actually still there nor do we. Spirit may already be under binding agreements for asset sales.
11) Whoever wrote this also does not understand how companies run. First of all they think they are doing something revolutionary with equity, when almost every company has ESOPs/EIPs. Profit-sharing relative to ownership is also literally how shares work and Spirit already regularly paid these out prior to beginning their financial crisis. Every publicly traded company has open books and openly reports their financials each quarter.
12) "One member, one vote — your voice is equal regardless of pledge size." What incentive would anyone have for pledging more? Also, voice in what? Vote in what?
13) "No golden parachutes — executive pay capped at a fair ratio to median worker pay." First of all, this is not what a golden parachute is. Secondly, either the fair ratio will be ridiculous to allow properly compensating execs, or they will be underpaying by a large margin and find it difficult to get any proper execs in place. Then they can speedrun the last few years of mismanagement at Spirit.
14) "The cooperative model has worked: REI, Ocean Spray, Land O'Lakes, the Packers — all people-owned." These organizations all have well thought out models. This is not the same as AI slop.
15) "Private equity is already circling the wreckage." First of all, Spirit is freely undergoing an asset sale. Their operations etc. are shut down. Not only is this not appetizing to PE, but in general PE firms stay very far away from airlines which are famously low margin difficult to operate businesses with limited potential for growth once established. PE normally focuses on airports and airport services, neither of which Spirit has (their airport assets are limited to slots at LGA which are useless to anyone except airlines). The much more obvious buyer is other airlines looking to expand control and consolidate aircrafts.
16) It is common for a company facing insolvency to shut down, do an asset sale of expensive assets, and then come online in a much smaller form with remaining assets, funding itself with the sold off assets. I don't see why Spirit would not do the same thing, in which case even if a cooperative bid is put together it would be much weaker than disjoint buyers (e.g. Frontier and JetBlue separately buying some aircrafts).
17) Lastly whoever wrote this has absolutely no plan to deal with the high operating costs and failing industry here, which is really much more important than ownership incentive structures. No amount of kumbayah we're all in this together is going to drive jet fuel prices down or change the economics of commercial aviation.
To my knowledge, there was no Wall Street villain here, and the creator of this page just inserted this sentence to arouse populist sentiment, because he/she knows a certain % of the population is primed to unthinkingly accept any narrative that the 1% have ruined something for the 99%.
https://cofree.coffee/~solomon/InhaleLabs_PitchDeck.pdf
https://www.thebignewsletter.com/p/who-killed-spirit-airline...