But without this deal they will go bankrupt and then there will be no Dollar General of the skies and the customer loses. Maybe allowing private markets to work would have been a good idea?
Can we even say that JetBlue succeeding and/or the merger moving forward would be a win for the consumer though?
The problem with aerospace is that it has a very high barrier to entry, so consolidation ends up hurting the consumer more often than not. Same as other infra related industries like telcos and civil engineering work that require fairly massive upfront capital and regulatory investments to operate.
Better to leave a hole in the market to encourage new entrants, even if it means consumers suffer in the short term.
I agree with you even though I think some will view this as a hot take. It is interesting that the US government has historically subsidized both smaller telcos and airlines to fill these types of small gaps where they exist.
It's utterly clear that free markets can fail and can eventually lead to all kinds of additional problems like wealth inequality and monopolies. This is clear.
Nobody is clear about the right move on how to deal with this problem. There's no sure fire conclusion.
Spirit runs with a 28 inch seat pitch, which is often physically shorter than the distance between someone's rear end and knee caps[1]. It's an unusual choice. Most other low cost carriers have 31 inches or more. I'm not sure Dollar General is the right comparison.
[1] Once you account for the padding, the angle you have to sit at, etc. Even if you aren't unusually tall, it is noticeably awkward and cramped.
I have never flown Spirit due to being 6'5". 30 in seat pitch is anatomically the limit, and that hurts. JetBlue having 33 in makes it a good choice for me.
There’s not a lot of room for effective restructuring here — for Spirit it’s more of a revenue problem rather than just a debt service problem. They’d probably end up in Chapter 7 (liquidation) pretty soon after starting Chapter 11 proceedings
I don't feel sorry for shareholders here. There are risks with all investments and its not as if Spirit mislead investors or acted fraudulently. Sometimes, investments go bad, thats the risk.
We shouldn't prioritize shareholders over the general health of a marketplace
The problem with aerospace is that it has a very high barrier to entry, so consolidation ends up hurting the consumer more often than not. Same as other infra related industries like telcos and civil engineering work that require fairly massive upfront capital and regulatory investments to operate.
Better to leave a hole in the market to encourage new entrants, even if it means consumers suffer in the short term.