Spirit Airlines Collapse: A Lesson in Accountability
Twenty years after Al Gore’s stark predictions about the world’s fate, it seems the left is now facing another inconvenient truth. Their policies are driving up air travel costs and making it less accessible during this summer’s travel season.
So, keep this in mind next time a left-wing politician bemoans travel expenses or attributes it to international conflicts. Ironically, these same policies are being pushed into various segments of the American economy, potentially leading to detrimental impacts.
The recent closure of Spirit Airlines on May 2 marks a regrettable development that many saw coming. This isn’t just about one airline going under; it leaves travelers stranded and puts as many as 15,000 employees out of work. Smaller airports are losing one of their few travel options. And, conversely, this situation has resulted in even more consolidation among the major carriers—Delta, American, Southwest, and United now account for around 75% of the air travel market.
How did we arrive at this point?
Consolidation and Controversy
In 2022, JetBlue and Frontier Airlines engaged in a bidding war to acquire Spirit, which had long been financially unstable. Together, these three low-cost airlines represented less than 15% of the total market.
Ultimately, JetBlue and Spirit struck a merger agreement aimed at creating a serious competitor to the Big Four. However, the Biden Justice Department, spearheaded by Assistant Attorney General for Antitrust Law Jonathan Cantor, intervened with a lawsuit seeking to block this merger. Notably, Senator Elizabeth Warren has been vocally against such business consolidations, pushing the Department of Transportation to take action against the deal.
A federal judge sided with the administration, effectively blocking the merger. Consequently, JetBlue withdrew its acquisition plans. Following this decision, Cantor labeled the outcome a win for American travelers seeking lower prices and more options.
Shifting Blame
Now that Spirit has folded, the individuals responsible for blocking the merger seem eager to deflect responsibility. Just two years after celebrating the halted merger as a victory, Warren has accused Trump’s administration of “putting the nail in the coffin,” conveniently overlooking that Spirit had filed for bankruptcy long before.
This situation isn’t isolated to airlines. There are similar cases, like the blocked Kroger and Albertsons merger, which involved smaller companies trying to compete against a larger entity. The interference by the left often leads to reduced competition, increased pricing, and job losses.
Some politicians also seem intent on disrupting domestic success stories. A group of left-leaning lawmakers—backed by a few misled Republicans—are working on legislation to break up large companies such as Amazon and Apple.
Biden’s Federal Trade Commission is under the leadership of Lina Khan, previously an advisor to a socialist mayor, and has collaborated with European authorities to impose severe restrictions on American businesses abroad.
The Consequences of Intervention
For those in the current Democratic Party, it appears that success is viewed as a problem, necessitating government intervention. There’s a prevailing sentiment that the government knows better than market forces or private innovation.
If Spirit had been allowed to merge with JetBlue, the scenario today might have looked much different. Yet, we’ll never know.
What is evident is that, even if you’ve never flown Spirit, the repercussions are now impacting you. With low-cost airlines vanishing, an increase in prices is likely across the board.
This upcoming election cycle is likely to pivot around the theme of “affordability.” Candidates who profess to hold the keys to lowering expenses should reflect on their stances regarding Spirit Airlines. Those who opposed the merger need to acknowledge the fallout they’ve contributed to.
