Spirit Airlines, the United States' flagship ultra-low-cost carrier (ULCC), halted operations early this month, hitting some local airports hard. Rival airlines are moving quickly to secure the routes and takeoff and landing rights Spirit left behind.
According to the Wall Street Journal (WSJ), Spirit Airlines entered a permanent shutdown of operations on the 2nd. The industry cites high oil prices and intensifying price competition from major carriers as the main reasons for Spirit's collapse.
Some U.S. airports are taking a hit from Spirit's bankruptcy. One of the hardest hit is Atlantic City International Airport in New Jersey. Spirit had accounted for about 75% of all passengers at Atlantic City International. There are even concerns that the suspension could effectively turn the airport into a "ghost airport."
Competitors moved quickly to secure routes. For low-cost carriers, absorbing the routes Spirit left behind offers a chance to expand. Breeze Airways, a low-cost carrier, agreed to take over most Atlantic City routes immediately after Spirit ended service. Breeze had already been preparing to start service at the airport this month, so its on-site operations were already in place.
Other low-cost carriers also moved to fill the gap. Frontier Airlines added nine new routes from Orlando, Florida. JetBlue expanded more than 10 routes from Fort Lauderdale. Allegiant Air is likewise reviewing an expansion of routes centered on regional airports.
The industry is also eyeing the major airport slots (takeoff and landing rights) Spirit held. The value of slots at New York's LaGuardia Airport is estimated at about $87 million (about 120 billion won). Slots are considered key assets that determine the number of flights at major U.S. airports.
Spirit was the only large carrier using "Terminal A (Marine Air Terminal)" at LaGuardia. Right after Spirit's bankruptcy, the terminal was largely empty except for staff guiding passengers from canceled flights, the WSJ reported.
However, the WSJ reported that rival carriers are not rushing into reckless expansion. The low-cost sector as a whole faces rising fuel costs and pressure on profitability due to instability in the Middle East.
Some low-cost carriers have recently asked the U.S. government and Congress for airline ticket tax cuts and a $2.5 billion (3.76 trillion won) support package. However, President Donald Trump said in a recent CBS News interview that "airlines are doing well," adding that "a bailout proposal has not, in effect, been formally raised."