Spirit Airlines' struggle to navigate post-pandemic trends lands it in bankruptcy

Spirit Airlines was expected to be one of the big travel industry winners after the pandemic. But the no-frills pioneer never found its wings in a changed business and operating landscape. On Monday, the Florida-based carrier filed for bankruptcy protection. While speculation about Spirit's future began swirling immediately after a federal judge blocked its $3.8b merger deal with JetBlue Airways in January, analysts say its Chapter 11 filing was longer in the making. Before the pandemic, Spirit was outpacing the market, luring price-sensitive travelers and forcing larger carriers to introduce their own versions of budget offerings. The airline's business model of an integrated fleet, keeping planes flying more hours in the day and putting more seats on every aircraft, helped optimize its resources and kept costs down. Its high fleet utilization produced double-digit operating margins for nine straight years until 2020. But the global health crisis changed the operating environment and travel patterns, and Spirit struggled to adapt. Spirit's average daily aircraft utilization is down 16% this year versus 2019, fueling cost pressures. Consumer demand has shifted in favor of full-service airlines in the past two years as middle- and upper-income households were vacationing extensively, while inflation hurt lower-income spenders.<br/>