Monday, May 27, 2024

Spirit Airlines CEO: Airline Industry Is a ‘Rigged Game’

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Spirit Airlines CEO Ted Christie did not hold back on a recent earnings call with analysts regarding his opinion on the current state of the aviation industry following a blocked $3.8 billion merger with JetBlue Airways earlier this year.

In a Q1 2024 earnings call on Monday, Christie called out the U.S. Department of Justice for blocking the merger, calling the decision “uninformed” and a “waste of taxpayer funds” that caused significant “damage done to two proud companies” in the process.

“Today, nearly all the profits of the entire U.S. airline industry 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,” Christie said bluntly. “American consumers are the long-term losers.”

Related: JetBlue-Spirit merger: US Judge hits the brakes

He noted that though JetBlue wasn’t the company’s “first choice” for a merger, the decision still would have been “very positive for consumers and our other constituents.”

In January, a federal judge blocked a proposed merger between the two airlines, ruling that the newly formed conglomerate would harm competition and lead to higher airfare for consumers, much to the dismay of both airlines.

Christie also called out the “Big Four” U.S. airlines (American, Southwest, Delta, and United) as the “beneficiaries” of the industry — the four companies account for nearly 75% of all domestic airline seats annually.

Spirit had a less-than-stellar Q1 2024, reporting an adjusted net loss of $160 million and roughly $1.3 billion in revenue, a decrease of 6.2% year-over-year.

“We were negatively impacted by adverse weather and air traffic control-related delays, particularly along the Eastern Seaboard and in Florida,” Christie told analysts.

Related: Spirit Airlines Furloughs Hundreds of Pilots, Defers Airbus

The domestic flight environment has improved “at a slower rate than we initially anticipated,” the company added and stated that it has no plans to add new routes in the immediate future.

Spirit Airlines was down over 79% year over year as of Wednesday morning.

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