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Transit Tangents
The Podcast where we discuss all things transit. Join us as we dive into transit systems across the US, bring you interviews with experts and advocates, and engage in some fun and exciting challenges along the way.
Transit Tangents
RIP, Spirit Airlines
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Spirit Airlines didn’t just sell cheap tickets, it reshaped how Americans think about flying. Now it’s shut down, and we’re asking the uncomfortable question: if the biggest ultra-low-cost carrier disappears, do all of us end up paying more even if we never flew Spirit once? We unpack what Spirit’s May 2, 2026, closure signals for airfare prices, route competition, and the future of budget travel in the United States.
We walk through Spirit’s surprisingly weird origin story, from a trucking company to charter vacation flights to a scheduled airline that grew up in Florida. Then we get into the real turning point: the post 9/11 era, when airline “service” started getting stripped away and the industry learned to survive on efficiency. Spirit’s CEO Ben Baldanza bet big on unbundling, asking why a passenger with a backpack should subsidize someone with two suitcases. That logic led to the fee-heavy, bare-bones fare structure that later showed up everywhere as “basic economy.”
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Spirit Shuts Down, Fares Go Up
SPEAKER_01The meme, the myth, the legend, Spirit Airlines.
SPEAKER_02Whether you loved them or you hated them, Spirit Airlines abruptly ended their operations on May 2nd of this year, unfortunately leaving quite a few stranded passengers in the process.
SPEAKER_01Known for their deeply discounted fares and their annoying fees, Spirit Airlines was the largest ultra-low-cost carrier in the US.
SPEAKER_02But what will this closure actually mean for Americans flying? Unfortunately, whether you flew Spirit Airlines or not, the answer is probably going to mean higher prices.
SPEAKER_01So this week we are going to get into the history of Spirit Airlines, their model, and why they closed and what this means for the future of airlines in the U.S.
SPEAKER_02Yes, and if you're wondering where we're sitting, uh we just wrapped up several days of shooting a lot of new content in the state of Florida. We're currently in Miami at Bayside Park. We made an episode in St. Petersburg riding their brand new BRT. We did Orlando using only public transit. We did a great interview with folks from Sunrise, Orlando, talking about uh all sorts of different plans that they have who are advocates in Orlando, as well as doing Miami in a day yesterday, and then finally meeting folks from the Transit Alliance Miami this morning. So it's been a very jam-packed couple days here, and we've got a lot of fun stuff that you
Florida Field Updates And Subscribe
SPEAKER_02all can look forward to.
SPEAKER_01We have to maximize Lewis' time when he is visiting from Derby. So really happy that you're here and that we're able to get as many episodes as we can.
SPEAKER_02Totally. So uh if you're not subscribed already, please consider doing so and you'll be able to check out all those episodes uh coming up over the next couple weeks with a few different things sprinkled in between as usual.
SPEAKER_01So, for many of you, you may not actually know the kind of bizarre history of Spirit Airlines, but they weren't always an airline or had anything to do with air travel. Uh, in fact, they were founded in the 60s as the Clippert Trucking Company.
SPEAKER_02Interesting. And if you go back, I feel like we did an interesting episode, and Greyhound has some interesting history as well with all sorts of different things. So uh some similarities in the fact that uh Spirit, which is known as an airline today, well, not known as an airline airline today, was something different before, and Greyhound also has some weird stuff in their background.
From Trucking Company To Airline
SPEAKER_01Yeah, so actually it was the 80s when Spirit Airlines was kind of officially born as some type of air carrier service, but it actually started as a company called Charter 1 Airlines, and they just focused on these travel packaged charter flights. They were based out of Michigan, and most of those flights went to destinations like Las Vegas, Atlantic City, and to the Bahamas.
SPEAKER_02And then it wasn't until 1992 when eventually Spirit started to begin offering fixed route services. So uh normal folks would be able to book it like a regular ticket. They were operating in traditional airplane sizes, not the smaller charter planes that you might have found before that time period.
SPEAKER_01Yeah, and it was 1992 that they adopted the name Spirit Airlines, and as you said, with that scheduled service, they started actually competing with other airlines in the industry. Now they didn't initially start out trying to compete with the really large airlines. Think of this more like jet blue, uh Southwest at the time, kind of before some of the controversial changes that Southwest is making nowadays. Uh, AirTran and other airlines like that.
SPEAKER_02That were like kind of on the aiming for the lower cost uh crowd there. Yeah. Yeah.
SPEAKER_01In 1999, Spirit Airlines also moved from Michigan to Miramar, Florida, where they have been headquartered since and where they really expanded their base of operations to include destinations all over Florida, the southeast, and uh really focusing a lot of Caribbean destinations as well.
SPEAKER_02Yeah, and if you've flown Spirit before, which I actually never had the opportunity to fly Spirit, I think I was always a little bit afraid of it. And I it was normally like a little bit tricky on price comparison for me in a few instances where I almost did it. But uh, if you have flown Spirit though, oftentimes your flight was gonna connect in Fort Lauderdale, not too far from here, actually.
SPEAKER_01Yeah, and as we said a minute ago, Spirit operated as a low-cost carrier, but they weren't exactly the ultra low-cost carrier that we know them as today. And to get to that point, there's actually some interesting history, and you really have to look back at how airlines operated in the 1990s. Back then, airline competition was really focused on service. So, how could your meals be better? How were the seats better? How was your in-flight experience? All of that sounds like something really nice and nostalgic compared to today.
SPEAKER_02Now it's just like herding sheep, getting like get on the plane, get off the plane. Like, would you like your really tiny bag of not peanuts? Uh peanuts and anymore, whatever. Yeah. Yes. So after 9-11, a lot of the airlines had to fully rethink what was going on. Obviously, passenger demand really dropped as people were afraid to fly in a lot of instances. Uh, you know, security ramped up, and folks were reconsidering whether they wanted to fly different places.
SPEAKER_01And the passenger recovery took anywhere from like two to four years, depending on the region of the country. But these airlines that had been operating at pretty high levels up until 9-11 suddenly had no passengers for four or five years.
SPEAKER_02Yeah, it was so bad that at the time, between 2001 and 2007,
Post 9/11 Resets Airline Business
SPEAKER_02six major US carriers actually had to declare bankruptcy. Among them are names that you're familiar with, including United Airlines, Air Canada, Delta, as well as a few other airlines that don't exist anymore today and have either been merged into some of the big four airlines, uh, as well as a handful of airlines just fully going out of business and were never to return.
SPEAKER_01Yep, those airlines, especially the smaller carriers, were airlines that were very similar to uh the services that Spirit was providing. So, fast forward to 2005, there is a lot of volatility in the airline industry, and Ben Baldanza steps in to Spirit Airlines as the president and then eventually as CEO. And he has some, I would say kind of radical ideas for passenger service, air passenger service in the US.
SPEAKER_02Yeah, he basically was asking the question of why should a passenger who is traveling on the plane with just a small backpack be essentially subsidizing the cost of someone who is traveling with two big suitcases? Is there some sort of balance that
The Ultra Low Cost Rulebook
SPEAKER_02can be made here so that the person who just wants the absolute basics can pay the smallest amount possible while making the passenger who wants all of the extra frills essentially included can do so but at an extra fee.
SPEAKER_01Yeah, because ultimately he believed that passengers were more concerned about the price of airline tickets than the services that they actually received. And there were a lot of services bundled into that ticket, like you said, including your baggage and food and a lot of other amenities.
SPEAKER_02Right. And thinking back to, I mean, food used to be a much bigger offering on Sony Planes. Like now, again, like we're saying, for free on most airlines, you're getting like a tiny little snack, but even on fairly short flights in the past, you would be provided like a lunch or a sandwich or something like that at least. Whereas today, all of those are add-ons, even for the most part on the bigger airline.
SPEAKER_01Yes, they even offer a lunch. Yes. Because most US airline routes do not offer a lunch. No, no, no, no. It should be noted that Ben's ideas were not unique globally. In the US, they were kind of radical, but this sort of proven assumptions of what passengers are willing to put up with, what they're willing to pay, had already been proven by Ryanair and to some extent EasyJet in the UK.
SPEAKER_02Yeah, and even today I love seeing clips of the Ryanair CEO. I occasionally I feel like I see him on my Instagram and TikTok feed. And there's one that I have to mention right now where he's asked, like, oh, like I heard that you were thinking about charging customers to use the bathroom. And he's like, Yes, of course I want to charge customers to use the bathroom, and then just had all the economics of like, well, if I can remove two of the three bathrooms on the plane, just have the one, people will not want to pay, so they're gonna use the bathroom at the airport beforehand, and I can replace those two bathrooms with five more seats that I can charge X amount of money for, and I can bring everybody stick it down by even more and be more competitive. So it is interesting to see that carryover.
SPEAKER_01I also don't know the validity of the validity of this, but I did once read something about uh a similar CEO of a different airline, it was an Asian airline, stating that if they encouraged all the passengers to use the restroom before they got on the flight, it was actually cheaper for the plane to take off because there was less weight. Yeah, I mean, yep, it's it's those it's those tiny little like marginal changes that really can affect the profitability of the airline. Yeah, absolutely.
SPEAKER_02In addition to having kind of a stripped-down fare for passengers to be paying with all the different add-ons, there were other efficiencies that were being focused on here by Baldanza, including focusing on one single aircraft family. So instead of what many of the big airlines have, which is multiple different air airplanes, some from Boeing, some from Airbus, that all required different parts, have required different skill sets for maintenance, uh, different uh gate configurations too.
SPEAKER_01That's a huge one.
SPEAKER_02Yep. Uh you would focus specifically just on one plane. So uh in the case of Spirit, it's the Airbus A320 series.
SPEAKER_01And this is something that we also have seen on Southwest Airlines and a couple of other airlines. If you fly Southwest, you know that every plane is pretty much the same, and that is a cost-saving uh sort of efficiency with the airline industry. Um, other things that he introduced was a denser seating layout, so packing as many people as you could. You have your knees and your chests basically for as long as you're yeah. Yeah. So packing as many people as you could into the cabin as well as faster turnarounds, higher aircraft utilization, uh, and just really trying to make the operational complexity just a lot more simple. Yes.
SPEAKER_02His big bet ultimately did pay off from 2006 to 2019. Speared Airlines was one of the fastest growing and most profitable airlines in the entire country.
SPEAKER_01Yeah, in fact, in 2019, their profit, their net profit now, not revenue, net profit was $335 million. And that was with a profit margin of about 9%. Yeah. If you go back and look at other airlines like Delta, for instance, they are going to outperform net uh profit by billions of dollars compared to Spirit Airlines. But where Spirit was clearly working well is that their profit margins were matched or even better than the big four airlines. Yeah.
SPEAKER_02Yeah, definitely impressive. And as a result, those big airlines were taking a look at what Spirit was doing and trying to figure out ways that they could compete because they did not like to see some of their market share getting gobbled up by this low-cost carrier. So that is when we start to see the introduction of things such as basic economy tickets. Uh, you're probably familiar with seeing these if you booked a flight anytime in the last five, 10 years or so. Um, and it is basically like buying a spirit ticket on one of the bigger carriers. So oftentimes you're limited to just the personal item. You don't get to put a carry-on bag above you without paying for a fee, no baggage fees, you don't get to choose your seat, you're randomly assigned one and things like that. So these other carriers essentially were trying to get their costs down a little bit to be competitive with spirit. And oftentimes it would get close to them,
How Big Airlines Copied Spirit
SPEAKER_02but not quite at the same level. But trying to make customers make that decision in their mind of do I want to go down and try Spirit or do I want to stay with the bigger carriers for just a slightly higher price point?
SPEAKER_01So one that really sticks out to me is the baggage fees because on some of the airlines, if you have any type of status, you're part of the membership program, you get two bags included, which is great. So sometimes if I were to look at a spirit airline flight or other airlines too, and I'm like, I have to pay for a bag, I don't really want to do it. But for a lot of people, if you, you know, didn't have bags, it was a cheaper uh ticket for you overall. And as you said, many of the airlines did start to compete on price, and that actually had a huge impact on Spirit Airlines and started to even pull back some of their customer base and uh really hurt them financially in the long run.
SPEAKER_02Right, because you have to think these big airlines are much bigger companies overall. They're also operating essentially as like credit card companies in a lot of cases, and they're okay with making less money in the short term to try to force a company like Spirit to suffer a little bit more and winning some of that market share. Capitalism's gonna capitalism. Yes, yes. And that that will continue to happen later on in this story as well.
SPEAKER_01Another defining feature of Spirit is that they really try to capture leisure passengers. And what I mean by leisure passengers is like people who are going on vacation, they're going to go see family, they're not traveling for business. And most of the big airlines were making a lot of their profit off of really focusing on business travelers. So, what Spirit would do is they would identify a market that was pretty much underserved, and they would move into that market uh to offer this service at a reduced price, and then they would suddenly unlock all of this demand. And it's probably something uh everyone has experienced before where you have to fly into a smaller city that's only served by maybe the big four, and tickets are really expensive. Yeah. When I was uh living in Mobile, Alabama, and I wanted to fly out at like 18 or 20 years old, I really struggled to find flights because I was only served by Delta and American and United, and they aren't competing against each other on price. Right.
SPEAKER_02So, like we said at the start, unfortunately, Spirit did ultimately close on May 2nd. But what are the reasons that it actually failed?
SPEAKER_01And one of those reasons we've already hinted at, and that was competition. A lot of these larger airlines started to try to match their fare structure, and it really did pull back some of the customers who would have considered Spirit, uh, who would go with these larger airlines.
SPEAKER_02Like the one flying over us right now, trying to trying to make sure you can't hear. In addition to that, costs were just going up as they are on everything. We're not even talking about
Competition, Costs And Fuel Shock
SPEAKER_02fuel yet in this case, but the cost of food, the cost of parts, the cost of access at a lot of airports, all of these sorts of labor labor, exactly, um, all play a factor. And when you are a low-cost carrier like this, I feel like some of those costs eat into your margins more than they would on the the for the bigger airlines.
SPEAKER_01But probably one of the biggest, if not the biggest, of the reasons why Spirit Airlines failed is the price of fuel.
SPEAKER_02Yeah. So uh unless even living under a rock, you probably are aware of the fact that since the start of the unnecessary Iran war, in my opinion. I'll leave it at that, sorry. The price of fuel of any kind, whether it be filling up your car, paying for heat, uh, or filling up a plane, has gone up astronomically. Just for context here, uh, jet fuel was was selling for $85 to $90 per barrel uh in the beginning of February of this year before the Iran War. And today it is selling between $150 and $200 per barrel. So fuel costs have essentially doubled in the span of about three months.
SPEAKER_01Yeah. So an incredible increase in cost to operate an airline, and that's gonna hit you even harder if you are an ultra-low cost carrier like Spirit. Yes. And we have to say the financial troubles didn't start with the fuel crisis. It definitely started beforehand. There was an effort for Spirit Airlines to be acquired by Jet Blue. This was happening back in the Biden administration, and the Biden administration actually did block that merger, which continued to prolong some of Spirit's you know already difficult financial challenges they were having.
SPEAKER_02Right. And a lot of folks on the right side of the political spectrum at this point are kind of placing blame on the Biden administration and even uh this would go through the Senate, and Elizabeth Warren was a big proponent of trying to prevent this merger from happening uh and saying that this is ultimately the reason. What I will say to that is that JetBlue is also not a profitable company. So a not profitable company merging with another company that at that point was beginning to really struggle to me doesn't sound necessarily like a recipe for success. Now they would say, oh, you could have your operational efficiencies and things like this uh to kind of help the two companies, you know, grow together and compete. But ultimately, what really was the final nail in the coffin here is just undoubtedly the fuel costs. Had the Iran War not started three months ago, Speared Airlines would definitely still be operating today. When your fuel costs double essentially overnight, obviously that's gonna create a huge problem. Yeah. And I think that this could have not necessarily saved the airline, right? They were obviously having issues, but it would have at least extended the the lifespan to the point where maybe they would be able to figure something out had this not happened.
SPEAKER_01Yeah, I think that I think the the idea here is that they would have had more time to figure something out. The likelihood of them failing was still pretty high. Yeah. You know, the financial struggles were gonna be really hard to overcome. And there was an effort with the current Trump administration to draft some type of bailout for Spirit Airlines, but it just didn't come to fruition before the airline finally had to cease operations. Yeah. With the way of Spirit Airlines, we may see this happen with other low-cost carriers because the economy is changing. You know, when we started talking about this episode, one of the questions that we had was who fills the gap for ultra-low cost service and what happens to some of the communities where prices had dropped when Spirit Airlines moved into their you know local regional airport. Right. And the unfortunate answer is it doesn't seem like any carrier is really going to try to capture this market.
SPEAKER_02Yeah, uh, and it's a little nerve-wracking to see. I mean, obviously in the United States, there are other low-cost carriers,
The Future Of Cheap Flying
SPEAKER_02but they were smaller than Spirit. So I'm thinking Frontier, I'm thinking Allegiant, uh, some country low-cost carrier at low cost, yeah. So I like, you know, right now it's I don't think that they're necessarily in as dire of situations, but I know that they're not necessarily thriving at the moment. And again, the the fuel cost issues here are also going to be hitting them very hard. So uh I'd be a little bit worried if I were operating one of those countries right now, or if I even had flights booked for one of those companies. Um, but I unfortunately don't expect United or American or Delta to try to come in and be like, oh, well, we're gonna offer these low-cost fares of these places. I think collectively, as you said earlier, like capitalism at work here, I think these airlines are probably going to work together to make sure prices just stay where they're at or go up if they're able to.
SPEAKER_01If they're able to. Sorry, yeah. Sorry, too and gloom here. I understand.
SPEAKER_02Remember who you're listening to and you're talking to me, unfortunately.
SPEAKER_01But it it is unfortunate, and there's there's a larger um economic force that's at play here since COVID, which I would say has been the second biggest disruptor to the airline industry, definitely the largest disruptor since 9-11. Since COVID, passenger travel has also changed dramatically. And now, if you look at the numbers, leisure travel actually did have a faster recovery. And so Spirit Airlines was looking really good coming out of the pandemic, whereas business travel had really, really halted. And a lot of that was because businesses were cutting costs, reducing travel budgets. We started working remote, so there was less reason to have to travel to another city to have a meeting. And so air travel had fundamentally changed, but there's also this emerging, I would say emerging, it's it's existed for a long time, but this accelerating K-shaped economy.
SPEAKER_02Yes, and that K-shaped economy is translating to a K-shaped airline industry dramatically right now, uh, where you're really seeing these airlines, and it's really clear when they're showing the renderings of all of their new planes that they're getting ready to roll out this year and next, and with the planes that they're refurbishing and kind of re-outfitting, you're having the plane have more and more of it be taken up by uh first class and premium seats, uh, leaving just a uh kind of a much smaller section to economy seats where like half the plane is now being taken up uh by these premium seats, whereas before it might have only been 20% of it. Um so it's a really dramatic shift there.
SPEAKER_01And it's something we should say about the K-shaped economy, if you're not familiar with that term, it's you can literally think of it as the shape of a K. The top earners in the country, their incomes are continuing to grow while the lower incomes, and not even necessarily lower, but the middle to lower incomes in the country are really stagnant and somewhat of a decline depending on what region you're in.
SPEAKER_02Right. And with that, companies are now looking at that and realizing we can make a whole lot more money while serving less customers at the top end of that than by trying to cater to folks on the bottom of end of that. Because especially when you're talking about airlines, people who are traveling multiple times of a year are gonna be at the top end. Like, and when I say multiple, I mean like business travelers often are 15, 20, 30 flights a year, which sounds like a lot, but in a lot of cases their companies are paying for it. And then, you know, those folks are making higher end on the income spectrum. So when they're getting ready to go on vacation, they're likely flying somewhere as well, versus folks who are gonna be on the bottom end of that are maybe flying once or twice a year, and it is less profitable for the companies to be trying to attract those travelers.
SPEAKER_01Yeah. And then my best uh Kai Rizdall of uh NPR. Let's do the numbers. The International Air Transport Association has actually estimated that since 2003, premium traffic has increased by 43% on airlines.
SPEAKER_02Yeah, and when you compare that to the economy riders, it's grown by less than half as much. So we're at about 23% versus at 43% of travelers.
SPEAKER_01In addition to that, domestic business and first-class seats have actually increased by 27%, while economy has only increased by 10% since 2020. So we are seeing this higher focus on premium services, premium seating, and I only think this trend is going to continue to accelerate. Agreed. Yeah, and I'm sorry, Kai Rizdal, I only had two sets of numbers. Yeah, that was a boom. You gotta work on that. Little snap, little week. But if you ever watch our show, hit us up. I would love to have a conversation with you.
SPEAKER_02So while airline costs are probably about to go up, I think it is worth talking a little bit about other ways that folks could potentially travel between these cities. Now, obviously, in the US, if you're going These super long distances right now. Your option is just to essentially book on another one of these airlines for a higher price point. But in some markets, regional buses and trains are an option. Unfortunately, though, it's like not as big of an option as it could be. And I think it is a good point for advocating for better regional bus networks, better regional rail networks as a check
Rail, Buses And Final Takeaways
SPEAKER_02on the airline industries in this case. Because right now, when you've only got these couple big airlines, it is going to be easy for them to raise prices. Whereas if you had more robust bus and rail networks, we could potentially see some pressure on the airlines with folks kind of choosing a different mode.
SPEAKER_01And it seems like the demand is already there. As we've talked about in a couple of previous episodes, rail ridership is generally trending up in the United States, not only within cities and transit systems, but also for some of these slightly longer distance city to city routes. So we see the success with the Borealis line, we see the success with the Amtrak Mardi Gras service. We see the success at least in ridership for Brightline. Yes.
SPEAKER_02We did ride Brightline on this trip and we will have more to talk about it because, like Chris said, ridership is going up there, but unfortunately, they are struggling on the financial side of things there. We will have more to say about that in another video. But Spirit is one player that may actually benefit from this situation at the moment. So yeah.
SPEAKER_01We are going to wrap this up because we are starting to get rained on. And we just want to say thank you so much for watching. If you have not liked this video, please go ahead and hit that like button, subscribe, and share it with your airline enthusiast friends.
SPEAKER_02If you want to support the show, the best place to do so are via our Patreon. You can buy us a coffee or check out the merch store at link down below. But without further ado, thank you all so much for watching and enjoy the rest of your Trans Tangents Tuesday. In the rain. Let's go down there.
SPEAKER_00I'm saving that go. Public transit wherever we're set. Watch me go.