Goodbye You Big Yellow Spirit in the Sky
Goin’ up to the spirit in the sky
That’s where I’m gonna go when I die
When I die and they lay me to rest
I’m gonna go to the place that’s the best
– Norman Greenbaum, Spirit in the Sky (1969)
My first Spirit Airlines flight was in 2015. It may have been late summer or early fall. All I remember is that I didn’t need a jacket. A friend was getting married in Cleveland, and I was a poor grad student trying to figure out how to make my budget work with tickets and sharing an Airbnb with a half-dozen of my friends. The ticket was less than $49 each way, and I remember this because I remember paying less than $100 or air fare. I might have worn a suit on the plane because I had decided that was the most efficient to travel, I might not have. I know for a fact that I did wear a suit on a Spirit flight to DC while still in grad school, just so that I could travel with a personal item (my backpack) and not need to pay for a carry-on. Thousands of miles flown internationally and the occassional trips on Spirit (and later in basic economy on other airlines) had taught me how to pack efficiently. Spirit has a way of teaching all of their repeat customers that. When the bag fees start dwarfin the airline fare (excluding tax), it tends to have a clarifying effect on what is ‘nice to have’ vs. what you need. A second pair of shoes became a luxury good, but I couldn’t wear sneakers to a wedding. So, it turned into brown oxfords, wearing the suit on the plane on the way there, the wedding day, and the trip back and nice button-down shirts and slacks while there.
I flew them a few more times after that. DC once. Florida a few times. The $49 fares, the $55 fares,the $63 fares were great at that point in my life when I didn’t have airlines credit cards that gave me free checked bags for each passenger. The bag fees were not subtle either. I have a wonderful memory of my wife’s first trip on Spirit as we laughed at the ridiculous announcements on a timeline from the Spirit agent at the gate (we were flying to her first trip to Disney and decided cheap hotels and flights were the only way we could make the math work). It started of as $35 for a bag if you have prepaid, and do so online, but $45 if you do it now, and then it started going up the closer we got to boarding. Almost like an auction. The nickel-and-diming was genuinely, impressively audacious. I remember people offering tips on how it was cheaper to go to the airport itself and to buy tickets there because it was cheaper than buying it online and I did it, and it was true.
Still, Spirit played a significant part in the both of us being able to go to Disney and Universal while still being in grad school. They offered the kind of prices that makes a trip feel possible rather than aspirational. There were occassional delays here and there for me, nothing catastrophic, not the horror stories you sometimes hear from other people. Just the kind that make you remember what you paid. . But the base fare was really cheap, and it got me where I needed to go.
So do I feel a little nostalgic and sad when I heard that Spirit finally shut down yesterday? Yes, of course yes. After two rounds of bankruptcy in two years, and a failed attempt at a merger with JetBlue. After jet fuel costs spiked on the back of the Iran war and a last-ditch government bailout collapsed, the airline announced it was winding down all operations. Thirty-four years it had been in operations. I learned that from the half a dozen videos I watched people post of tearful flight attendants and pilots making similar announcements to passengers. And honestly, I missed that – the flight attendants were genuinely the most fun part of the Spirit Airlines experience. Their self-deprecating humour, the straight talk as they would remind you that you are not flying Delta so not to expect hot beverages or a face towel, and then them going down the aisles pushing credit card applications.
I have seen some folks push the narrative that it’s no big deal. That if you look at Spirit’s national numbers, they were only 3.4% of domestic market share. It sounds small, doesn’t it? And yes, it is small. But that framing misses how airline pricing and how airline markets actually works. There is not one national/domestic airline market. There is not even regional markets in that sense like the Northeast to Florida. Airlines don’t set ticket prices nationally or regionally. They set them route by route. And on the routes Spirit flew – Fort Lauderdale, Orlando, the Caribbean islands, and from the primary and secondary airports that budget travelers actually used – Spirit wasn’t a marginal player. Sure it was shrinking, but it still held about a quarter of the market at Fort Lauderdale. A major airport. And there are dozens of smaller regional airports where their presence was essential. That’s not a small number. Spirit was a carrier that forced competition and drove prices down. I would never recommend someone take a connecting flight on spirit with multiple legs. But if it was a direct trip between Boston to Florida and Spirit’s tickets were $70 and Delta and JetBlue were selling the same tickets for $200 each, I would never judge you for picking the former option.
So Spirit ceasing operations will have quite the impact in some markets.
This matters because of what the economics literature has documented clearly about what happens when a low-cost carrier enters a route. The most well-known (and the earliest) version is the Southwest Effect where fares drop sharply and capacity increases when Southwest enters into the market (a specific route between airports or cities). This effect was identified and measure on other low-cost carries like Jetblue and Spirit too. So more seats on offer, more people flying and cheaper fares all around. Yes that would mean less profits for the legacy carries (Delta, American and United) but it was a win for consumers.
To explain this further in the form of an example – you don’t have to fly Spirit to benefit from Spirit being there. The $55 Spirit fare is what keeps the $109 Delta basic economy fare from becoming $149. That’s how competition works on a given route. Remove that competitive pressure, and there is no reason for Delta to sell those seats at $109 any longer. The floor rises.
And this isn’t simple speculation from a frequent traveler – I’ve seen this dynamic up close in my own research, what the effects of a sudden decrease in supply can do to ticket prices. When the FAA grounded the Boeing 737 MAX in 2019 after the two crashes, American, Southwest, and United – the three carriers that had deployed MAX aircraft – suddenly had fewer planes than planned. On the routes those planes had flown, fares jumped up to 7 percent. But it wasn’t just these routes that were affect, the more interesting finding was the spillover on other routes. Ticket prices rose on other routes too, routes where the MAX had never operated but where the affected carriers still flew. And the carriers that weren’t affected at all – Delta and JetBlue – they raised their fares the most. When capacity tightens and competition decreases, prices go up and consumers are worse off.
Some people are making the arguement that Frontier is still flying and Frontier is still there. But Frontier doesn’t have the same route density or spread to replace Spirit in the markets that mattered, and it never had the same ambitions. Allegiant and Breeze are small competitors, serving thinner niche markets and have fundamentally different strategies. None of them will occupy the role Spirit did. And people might not notice or connect the events, because it will not happen overnight. The fare that used to be $99 will becomes $140 twelve months from now, and most consumers won’t realize that Spirit’s absence caused that. And in the end, consumers will be worse off – either because they are paying higher ticket prices, or because some will be priced out of a vacat
The JetBlue merger outcome deserves honest acknowledgment here too. The DOJ blocked it in 2024, arguing it would harm budget consumers by absorbing Spirit into a larger carrier. The judge agreed. The theory was that less competition is bad for travelers – it was a sound decision at that time. Eliminating Spirit as an independent competitor would harm price-sensitive travelers and research showed that Spirit’s presence put downward pressure on other airlines’ prices reducing them by 7 to 11 percent on average. But what actually happened yesterday was that Spirit collapsed and the entire competitive pressure it exerted disappeared.with it entirely. Whether a merged JetBlue-Spirit would have been better or worse than in the long-run is genuinely hard to say with. Counterfactuals are hard, and it is true merged airlines do not preserve the same level of ocmpetition as independent carriers. But there are few economists who would argue against the fact that this worse for consumers in the short-run.
This is not an argument for easier merger approval. In fact, I strongly believe we do too little to stop more mergers from happening. But it is an argument for economists and courts to consider the financial fragility of smaller firms when considering such cases.
I am not writing a eulogy for Spirit Airlines becaues I will miss the experience. There is a reason I have not flown Spirit since grad school. But I am writing something close to a eulogy for what Spirit did – for the function it served, imperfectly, sometimes maddeningly, but consistently for three decades in helping lower prices and air fares for everyone where they operated.
The people who flew Spirit weren’t flying it because they loved Spirit. They flew it because $49 to Cleveland was $49 to Cleveland. For a grad student trying to make a friend’s wedding while balancing budgets, or a family piecing together a first vacation, or a college student flying home for the weekend, that low price was the difference between going and not going.
And now that seat is gone now. And the price of the others just got a little higher.
Also if you want to look at how ridiculous Spirit Airlines baggage fees could be, google “spirit airlines + skateboarder + baggage fees.”
