Spirit CEO: U.S. Aviation “Seems Ever More Like a Rigged Game”
Joe Cortez May 08, 2024
Christie made the comments during the airline’s 2024 first quarter earnings call, held on Monday, May 6, 2024.
Christie Slams DOJ and Shareholders for Merger Breakup, Says Current Normal Benefits Legacy Carriers
In his opening comments, he lauded the success of opening their new central campus near Fort Lauderdale’s airport, noting that “we thought the branding of the new facility might be blue.” He then went on to blame the government for their intervention of their previously planned merger with JetBlue.
“We still feel strongly [that] it was a serious misreading of both the evidence and the law for the Federal Court to enjoin our merger with JetBlue,” Christie said of the court decision blocking the merger. “And aside from the waste of taxpayer funds and the damage done to two proud companies through this process, the fact that the DOJ even brought a case to block a merger between two carriers with less than 8% combined market share, just shows how uninformed the government is about our dynamic airline business, particularly in the post-COVID era.”
He also took a shot at shareholders about choosing JetBlue over their first merge partner choice, Frontier Airlines. JetBlue had a massive campaign targeting shareholders to pressure the Florida-based airline to merge with them instead.
“In the beginning of our consolidation process in 2022, we advocated strongly for a merger between the two largest ULCCs and tried to outline the challenges with the proposed JetBlue transaction, but our shareholders did not listen,” Christie said. “While not our first choice, we believe the merger with JetBlue would as an alternative still be very positive for consumers and our other constituents.”
As a result of the two situations, the CEO went on to say: “The big four are the beneficiaries of this new normal, American consumers are the long-term losers.” While he noted that Spirit and JetBlue would only have 8% of the combined market share, he noted that the majority of U.S. airline profits are “concentrated in just two companies, while the smaller non-legacy carriers scrambled to restore profitability in what seems ever more like a rigged game.”
The airline reported an adjusted net loss of $160.2 million in the first quarter of 2024, for a diluted net loss of $1.46 per share.
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Only a shill that's risen up through the financial end of the business can honestly sit there with a straight face and claim the system is rigged whilst pursuing a merger which ultimately would have had zero positive impacts for consumer. The system may very well be rigged however - but more like in favor of the airlines that have merged and consolidated into behemoths that behave as a cartel that move in lock-step with one another. From unbundling to having the gall to ask the government for a bailout after years of buybacks, these clowns have only gotten more financially innovative with how they screw over the flying public.
These jack*sses should wake up in the morning with the fear of god inside of them that they could at any moment suffer the wrath of scorned customers - much like one of the millions of small business owners do that actually have some skin in the game. Bob Jordan should have been in witness protection for the SWA fiasco yet somehow he still has a job.
Amen
It's pathetic to hear an airline CEO whine like this. The ULCC model employed by Spirit is the problem. If you cannot make your airline profitable by turning it into a flying greyhound then admit it and do what you must but don't whine that you don't have a model that competes. Today I went on Spirit's website and got a round trip fare from FLL to DTW tomorrow with a return on Saturday. Price was $506 plus another $59 for a checked bag and a seat. Delta's came in at $439 including seat selection and a checked bag. Spirit's nickel and diming and absurdly uncomfortable cattle cars and staff that are nothing more than sheep herders is the problem. If you want to be one of the big boys then provide the service, clear and non-deceptive pricing and maybe you might have a chance. But don't whine and say poor me we are being discriminated against. They are not.
Amen
Beautifully said.
I agree that it was a bad decision. But, when Christie says "our shareholders did not listen," I think he is confused. He is the one who is supposed to listen to shareholders. They are the owners and it is his job to serve the interests of his company's owners. That is what he is paid to do. If he things they are ill-informed, he can inform them but, in the end, it is his job to listen to them.
"He is the one who is supposed to listen to shareholders. They are the owners and it is his job to serve the interests of his company's owners."
Hypothetical: You as an employee spot a potential major issue and advise the owner that they need to do XYZ to avoid a disaster. The owner ignores your advice and the catastrophe occurs as you predicted. You're claiming that you would never say "my boss did not listen"?
Not hypothetical, see Boeing 737...
I tend to agree with dliesse in that mergers are rarely ever good for consumers, but at the same time I feel that the ULCC model is doomed* in the US and as such, bolstering JetBlue's capacity with Spirit's assets would have been a good thing - it would have provided more direct competition against the legacies.*Why do I say this? I think more and more people are seeing that the ULCC model doesn't actually end up being any cheaper once you add in normal bags and a decent seat, and you run the added risk of being stranded for multiple days if there are IRROPS. Add in the poor service that is often publicized and I think people have learned not to bother.
He's not wrong. Life is a lot about who you know and what you pay them.
Which is corruption at its core. Sad state of affairs for us as the planet has risen to wipe our species out.