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.
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.
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.)
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.
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.
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.
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.
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.
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.
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.
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.
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".
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.
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?
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.
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”.
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.
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.
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."
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.
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.
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.
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?
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.
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 .
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.
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.
> 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.
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.
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.
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.)
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.
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.
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?
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.
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.
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!)
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.
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.
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.
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.
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.
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.
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.
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.
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?
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_.
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.
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.
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.
> 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.
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.
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.
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.
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.
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.
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!
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
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.
> 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.
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.
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.
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?
“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.
> 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.
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.
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.
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?
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?
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.
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.
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.
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 .
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.
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.
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!
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.
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.
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.
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.
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.
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.
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.
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.
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)
> 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.
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.
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
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.)
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.
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.
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’ve not flown them and stick to Alaska and the local puddle jumpers to get off the island.
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?
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.
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.
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?
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.
Btw you don't need to completely disregard other modes of transport to appreciate bus :)
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.
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.
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.
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 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.
[1] https://en.wikipedia.org/wiki/Civil_Aeronautics_Board
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.
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.
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.
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.
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.
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_.
They used to be. Read up on "Civil Aeronautics Board".
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 you want to be a millionaire, start with a billion dollars and launch a new airline."
Don't know where I read that, but it seems apropos.
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.
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)
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...
You are not forced to play it. That is a just story you tell yourself. You can make a different choice.
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.
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?
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.
Talk about damning with faint praise
https://www.yahoo.com/news/articles/american-airlines-worst-...
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.
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.
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.
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.
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.
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.
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.
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.
> *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?
How could it do anything but fail?
Nobody is buying spirit air... a bunch of gamblers just want to pump the price monday morning.
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.
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.
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…
https://cofree.coffee/~solomon/InhaleLabs_PitchDeck.pdf
https://www.reddit.com/r/charts/comments/1psiwws/us_airlines...
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.
Great idea in theory but…
It saddens me that people will buy into this mindless populist drivel.
https://www.thebignewsletter.com/p/who-killed-spirit-airline...
- Warren Buffett (Comedian)
Brilliant.
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 $270M line of credit secured by assets Spirit needed to survive (an RCF was backed by their right to take-off and land at LGA amoungst other thinfs)
1 week before the 2nd bankruptcy, Spirit drew against the entirety of that line of credit.
During the 2nd bankruptcy, besides rolling large amounts the debt owed to them from the 1st bankruptcy (so Spirit would need to pay it back before other creditors), they had the proceeds of plane sales go towards... interest payments on their RCF and paying back additional financing from the 2nd bankruptcy.
The creditors leading the 2nd bankruptcy also sold the lease to Spirit's largest hangar on April 2nd, but did a similar thing again: instead of the cash going towards operations, it went to the creditors who'd led both bankruptcies.
-
Seeing as they refused the government's bailout, I'm guessing this is doomed as well, but interesting stuff for a non-finance person
*and fail to
And it was cheap, so you could book a next day flight without paying multiples in premium.
It was fun and affordable to fly out of state in the morning, spend a day exploring another place and get back at night.
When the Packers upgrade their stadium and charge higher prices for tickets, I can promise you that they won't use the profits to buy back your shares or pay you a dividend.
1) Pledges being non-binding means there is no proof of funds. This means they can't actually make an offer, presumably they will have to email everyone who pledged to put in cash and hope it resembles a solid offer.
2) How much is Spirit worth? Their market cap was ~50M a few days before they shut down. Where are we getting 1.75B$ 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.