How Spirit Airlines’ shaky future could make American travel worse

A federal judge’s order blocking a $3.8 billion-dollar deal that would have JetBlue Airways purchase rival Spirit Airlines leaves Spirit with an uncertain future. But the ruling didn’t just leave the airlines with uncertainty; it sent shudders through some of Spirit’s key constituencies.

Few places will feel the impact harder than the Arnold Palmer Regional Airport (LBE) if Spirit can’t keep flying. About an hour east of downtown Pittsburgh in the city of Latrobe, Pennsylvania, the airport serves the gritty coal towns east of Pittsburgh but also lures in travelers from a three-state area with free parking, short TSA lines, and low fares from Spirit. The Arnold Palmer Regional Airport has almost all the amenities of any major airport, just on a smaller scale. There’s a baggage claim, car rental counters, and DeNuzio’s Chophouse to feed travelers while waiting for their flight. But all the travelers in the passenger area hold boarding passes for one airline: Spirit.

That is because Spirit Airlines is the only commercial carrier to provide service to LBE.  

“Being that they are the only one, they are really important; it would be devastating if they would go belly up,” said Gabe Monzo, executive director of the airport.

Spirit has trimmed its schedule at LBE from several daily flights to one direct flight to Orlando. 

But Monzo says service will likely resume to Myrtle Beach in the spring.

A 2022 study by the Pennsylvania Department of Transportation put the regional economic impact of arriving and departing passengers from LBE at $213.9 million. Monzo says $100 million of that is from Spirit Airlines travelers.

Spirit’s bargain-basement fare fliers

LBE won’t be the only one left in the lurch if Spirit can’t find a path forward.

Spirit Airlines fills a niche for leisure travelers, college students, missionaries, and others seeking bargain basement, no-frills fares.

Professor Jase Ramsey, a Florida Gulf Coast University management professor in Fort Myers, has two stakes in Spirit Airlines: he uses the airline for family vacations from service at nearby Southwest Florida International Airport (RSW), and incorporates Spirit into his courses.

From a family perspective, he said a Florida without Spirit hurts in two directions. Its absence from the market will likely raise prices for incoming tourists from the north. But it will also cut off affordable vacation options for South Florida families heading to the Caribbean.

“This will be bad for our region if something happens to Spirit from a price perspective. They are usually our low-cost leader. If you want to do a family vacation out of here, that is your go-to airline,” Ramsey said. 

From a tourism perspective in South Florida, Spirit is a lifeline.

“This isn’t good for us. South Florida really depends on them. It is a healthy market with two low-cost providers that compete with one another,” Ramsey said, referring to Southwest Airlines, which also flies into RSW and that he says also keeps fares low. He just returned from a Caribbean vacation with his wife and young child, enticed by their low fares and offbeat destinations that some other airlines avoid.

Offbeat destinations, small margins

For instance, when civil unrest pulsed through Haiti in 2018, Spirit — which offers direct flights from Port-au-Prince to Fort Lauderdale and New York — was a lifeline for some.

“They kept on flying, and that was a good thing for us because we were able to keep some programs in place,” said Lisa Stutzman, who organizes travel for Ohio-based Christian Aid Ministries. “They were a plus for Haiti,” she said, noting that both American and Delta canceled service to Port-au-Price at the time, leaving Spirit as the only option.

But not everyone in Port-au-Prince is a fan of Spirit.  

Wadestrant Jean-Baptiste, president of the Evangelical Theological Seminary, which has approximately 300 students and is located in Port-au-Prince, said Spirit is a good option for some Haitians, but that often the price isn’t worth it for those who are economically struggling, and that may be part of the reason Spirit is experiencing problems.

“Spirit sounds like a good option because our economy is dying, and they offer low-priced tickets, so people tend to go to Spirit, but in the end, they end up wasting time and money,” says Jean-Baptiste.

He said Haitians who travel to the United States like buying items that are cheaper than in Port-au-Prince. And they like to take those items back home but are then stymied by Spirit rules about bag dimensions and weight.

“They measure every bag, and it’s stressful,” Jean-Baptiste said. Exceeding the bag weight, which often happens after shopping in the U.S., can be costly. “In the end, you pay more for the item you pay more than if you bought it in Haiti,” he said, adding that he has flown Spirit a couple of times but prefers American Airlines. But he added that for Haitians just wanting to leave, Spirit is a good option.

Paul Vaaler, a professor at the University of Minnesota Law School and Carlson School of Management, says Spirit’s attention to offbeat destinations like Port-au-Prince sets it apart from other airlines. However, he says their margins are so small that it makes it difficult for Spirit to compete.

Vaaler thinks the judge’s ruling against the JetBlue and Spirit merger wasn’t sound and could be overturned on appeal. On Friday, the airlines formally appealed the decision.

“It was a very wooden ruling of the Clayton Act,” Vaaler said, referring to the competition statute on which the judge based his ruling. Rather than stifle competition, a more muscular Jet Blue could make prices more competitive, he said.

“What I think the judge missed is that there is an offsetting beneficial effect of a merger; a large JetBlue could put more pressure on the legacy airlines,” Vaaler said. This is especially true in mixed markets like Los Angeles that attract both leisure and business travelers. 

Part of Spirit’s challenges is that its prices are so low that it isn’t just competing with airlines but also with buses and trains.

“They bring out a whole new set of travelers,” Vaaler said, adding that having the ultra-low cost carriers around keeps everyone’s prices lower. “There is a role for those players, and it is really important to provide those choices; they go to places that the legacies airlines don’t,” he added.

Meanwhile, back in Latrobe, airport director Monzo just hopes to see Spirit stay in the sky.

“Spirit has kept us alive, that is for sure, but no matter what happens, we will keep plugging away,” Monzo said.