Spirit Airlines pioneered the ULCC model in the US – now its survival is highly questionable
Now that a judge has sided with the US Department of Justice (DOJ) to block the JetBlue-Spirit merger, those airlines are left to engage in a bit of soul-searching now that their plan to become the country's fifth largest airline has vanished.
Both airlines now need to pick up the pieces, but time is of the essence for Spirit Airlines. For approximately the last two years consolidation has been the airline's only growth path, and its financial performance has languished during that time.
There's a certain irony in US District Court Judge William Young's decision to ensure that Spirit's ultra-low cost model is preserved. But Spirit, which ushered in the ULCC era in the US, faces the possibility that it could exit the US market due to its shaky financial state.
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