Key aspects of the Spirit Effect include:
Lower Overall Fares: The presence of Spirit often meant competitors introduced "basic economy" options, sometimes referred to as the "Spirit match fare".
Price Increases on Exit: When Spirit exits a market, fares frequently rise by 5.7% to 30%, as noted in studies of their, as of May 2026, anticipated service cuts.
Industry Disruption: The model forced major, higher-cost airlines to unbundle their services, such as charging for carry-on bags or seat selection, to match ultra-low-cost pricing.
Economic Impact: The phenomenon was so significant that it was heavily cited by the U.S. Department of Justice to block a potential merger with JetBlue in 2024, arguing it would hurt consumers by removing the competition.
On a related note, yesterday Allegiant Air announced Allegiant Travel Company announced it has successfully completed its acquisition of Sun Country Airlines Holdings, Inc., bringing together two complementary carriers focused on affordable leisure travel - the exact kind of merger that Pocahontas was so vehemently opposed to between Spirit and Jet Blue.
The transaction closed following satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by the shareholders of each of Allegiant and Sun Country.
If you believe in the Spirit effect then you have to agree that the best thing for the consumer (you and I) was to keep Spirit independent from other carriers.
ReplyDeleteThe same applies to Allegiant and Sun Country.
Fewer options lead to less competition and higher prices.
If we had 200 airlines I would be ok letting them merge. We are down to less than 10 airlines controlling 90% of the traffic.
How much consolidation is too much consolidation?
Don't forget that Pocahontas is in the pocket of airlines who pay her to STOP the competition.
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