dailynewsnblog
Spirit Airlines On The Chopping Block
Gaining more slots at LaGuardia will significantly improve the market share of any airline that wants to increase its traffic in and out of the New York City area. If one airline were to purchase all the gates, it could add a turnkey operation of 12 daily flights to its base at LGA. Ultimately, whichever bidder does win the auction must still be approved by the bankruptcy court before they could be transferred.
In addition to Frontier and AA, Allegiant Air, Breeze Airways, Delta Air Lines, JetBlue, Southwest Airlines, and United Airlines have all been acquiring parts of a former Spirit network since its liquidation began. Spirit was the primary carrier operating out of LaGuardia’s historic, Art Deco-style Terminal A, also known as the Marine Air Terminal.
The asset package will go to the bidder with the “highest and otherwise best” offer. Robert Isom, CEO of AA, was quoted by the Points Guy, remarking on the carriers’ interest in acquiring Spirit’s LGA footprint:
“If there are assets that become available in the marketplace, American has a long history of being aggressive. We’re going to be at the forefront of that.”
One Less Affordable Airline For American Flyers
LaGuardia is one of only three heavily restricted, slot-controlled airports in the United States due to its extreme air traffic. Frontier is considered a strong candidate to replace Spirit at LGA, as The Cranky Flier spotlighted. They currently hold only four daily slot pairs at LGA, and taking over Terminal A would allow them to easily fill the budget-travel void left by Spirit. FAA Administrator Bryan Bedford told the Wall Street Journal that he would prefer other budget LCCs to fill the vacancy left by Spirit.
The agency wants to preserve ticket competition and prevent dominant major airlines from monopolizing New York airspace, like the legacy ‘big three’ of AA, United Airlines, and Delta Air Lines. The FAA’s preference is so intense that they have issued a rare ultimatum. Airline Geeks reported that Bedford said that if a low-cost carrier does not acquire the slots, the FAA would prefer to retire them entirely.
Both AA and JetBlue are actively exploring bids to capture the slots to expand their New York network dominance. Southwest Airlines is also a potential contestant for the auction as it would strengthen the budget-conscious carrier’s position at LGA. Cutting the slots from the system would reduce New York’s persistent flight delays and airport congestion, which the FAA views as a better alternative than letting a legacy airline get further entrenched.
United Airlines Sees 103,000+ Bookings & 17,000 New Loyalty Members After Spirit’s Collapse
The legacy carrier reported dramatic increases in ticket bookings and loyalty memberships following Spirit’s closure.
The Fade Out Of The Spirit Effect
In the aviation industry, the ‘Spirit Effect’ refers to how the presence of an ultra-low-cost carrier forces major legacy airlines to lower their own base fares to remain competitive. Because Frontier operates an identical budget business model, the FAA views it as the most suitable replacement to keep downward pressure on New York airfares.
Because Spirit abruptly cut 1.8 million seats off the nation’s monthly calendar overnight, demand has heavily outpaced supply in the time since it shut down. Historically, when Spirit entered a new city pair, average airfares on all competing airlines on that route dropped by an estimated 15% to 19%. With Spirit now erased from the market, legacy airlines have regained immense pricing power, removing the baseline floor that kept domestic travel affordable.
