The Vultures Begin to Circle
Think of it like a popular shop on the high street suddenly closing down. It’s a sad day for its employees, certainly, but what happens next? The loyal customers don’t just stop shopping. They wander next door. The rival shops, the ones with stronger finances and perhaps a slightly less aggressive approach to pricing, suddenly find their aisles a bit more crowded. This is precisely what we could see in the American skies.
Spirit’s retreat, because a retreat is what this restructuring will inevitably cause, leaves a vacuum. They will have to cut unprofitable routes and reduce the number of flights to stay afloat. For their competitors, this is Christmas come early. Suddenly, airport slots become available, established routes are less crowded, and a whole cohort of disgruntled passengers is looking for a new airline to fly with. The question for us, as investors, is simple. Who is best placed to hoover up all that lovely, abandoned business?