Bankrupt Spirit Airlines is navigating “turbulent skies” and is expected to receive a federal government bailout of up to $500 million, according to sources familiar with the situation who spoke to CBS News Miami.
Travel experts say the potential infusion of cash is a good deal for consumers as it keeps a low-cost competitor in the market, but possibly “not a great deal for taxpayers,” according to Clint Henderson, a travel expert with The Points Guy.
“I like Spirit for its cheaper flights, for sure, especially if it’s a short one, I’m happy about it,” said passenger Kimberly Hansen.
However, there is concern about the market impact should the ultra-low-cost carrier fail. Henderson cited an example where Spirit pulled out of Minneapolis, and “Immediately, the fares went up substantially”.
An example at Fort Lauderdale-Hollywood International Airport (FLL) further illustrates the potential price hike: when another ultra low-cost carrier dropped its Fort Lauderdale to Trenton, New Jersey, flight, the fare went up 73%.
The airline has already been reducing its presence at its hub in Fort Lauderdale. On a recent Wednesday, considered a slow day by a source, there were 20 flights on the departure board from mid-afternoon until late evening. Henderson confirmed the cuts, noting Spirit is “severely cutting the number of flights in and out of Fort Lauderdale” and has “dramatically scaled back the number of frequencies on some of the routes they still fly”.
Transportation Secretary Sean Duffy questioned whether the airline can survive, even with a $500 million cash infusion, asking, “The question will be, can we do anything to save Spirit and make it viable, or would we be putting good money into a company that inevitably is going to be liquidated?”
When asked for comment, Spirit Airlines sent a statement saying, “…we decline to comment. We are operating our business as normal; Guests can continue to book, travel and use tickets, credits and loyalty points as usual”.
Sources tell CBS News Miami that an official announcement regarding the bailout may be made tomorrow.
