United CEO says he expects struggling Spirit Airlines to go out of business
Original story by
CNBC•Sep 11•Airlines, Business, Finance
📰 Article Summary
United Airlines CEO Scott Kirby predicted the closure of Spirit Airlines, stating that the once-thriving discount airline model is now obsolete. Spirit recently filed for Chapter 11 bankruptcy for the second time in a year due to inadequate operational changes and declining customer demand. Kirby criticized the airline industry’s focus on low fares and hidden fees, arguing that a model which frustrates customers cannot be viable, leading to a public backlash from Spirit's representatives.
📌 Key Facts
- Spirit Airlines Bankruptcy: Spirit Airlines has filed for Chapter 11 bankruptcy protection for the second time within a year after failing to adapt sufficiently to market demands and facing high operational costs.
- Kirby's Prediction: United Airlines CEO Scott Kirby believes Spirit Airlines will shut down, citing his mathematical analysis of the airline's situation.
- Criticism of Discount Model: Kirby has long criticized the low-cost airline model, claiming that its reliance on low fares and numerous add-ons alienates customers.
- Industry Response: In response to Kirby's comments, Spirit Airlines defended its business model, highlighting that their new offerings are appealing to budget-conscious travelers.
- Shifting Market Dynamics: As Spirit struggles, competitors like United and JetBlue are actively increasing their flight offerings in the cities served by Spirit, indicating a shift in the competitive landscape of the airline industry.
📂 Article Classification
Topic Tags: Airline Industry
📍 Location
Long Beach, California United States
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