“Expect Increased Prices” - Spirit Airlines Devastated by Judge’s Decision
Valuetainment
Valuetainment Episodes
4.8 • 1.7K Ratings
🗓️ 5 February 2024
⏱️ 10 minutes
🧾️ Download transcript
Summary
Patrick Bet-David explains the shocking situation that recently took place with Spirit Airlines. JetBlue agreed to buy Spirit for $3.8 billion in a 2022 deal that would have created the country's fifth-largest airline. U.S. District Court Judge William Young blocked the merger, citing reduced competition. Did this decision hurt or help the free market? Purchase a “Future Looks Bright” Purple & Gold signature hat and t-shirt, and receive one additional “Future Looks Bright” hat for free (red, white, black & camo). Use promo code “pbdpodcast” at checkout: https://bit.ly/3Sgbrnf Purchase Patrick's new book "Choose Your Enemies Wisely": https://bit.ly/41bTtGD Register to win a Valuetainment Boss Set (valued at over $350): https://bit.ly/41PrSLW Get best-in-class business advice with Bet-David Consulting: https://bit.ly/40oUafz Visit VT.com for the latest news and insights from the world of politics, business and entertainment: https://bit.ly/472R3Mz Visit Valuetainment University for the best courses online for entrepreneurs: https://bit.ly/47gKVA0 Text “PODCAST” to 310-340-1132 to get the latest updates in real-time! SUBSCRIBE TO: @VALUETAINMENT @vtsoscast @ValuetainmentComedy @bizdocpodcast @theunusualsuspectspodcast Want to be clear on your next 5 business moves? https://bit.ly/3Qzrj3m Join the channel to get exclusive access to perks: https://bit.ly/3Q9rSQL Download the podcasts on all your favorite platforms https://bit.ly/3sFAW4N Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller “Your Next Five Moves” (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
Transcript
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| 0:00.0 | You ever flown on Spirit before, you know, you kind of like I have but I don't want to tell anybody. |
| 0:03.6 | You know the airline that you go on and you pay $55 and you're like, oh, but this is nothing. |
| 0:06.8 | Check in the back, $55, $55. |
| 0:08.8 | Can I get your wife for? |
| 0:09.8 | $7, $12, can I get some food, $15? |
| 0:12.1 | Wait a minute, it's the same as the other guy's bought. $12 can I get some food 15 dollars? |
| 0:12.6 | Wait a minute it's the same as the other guys but still market-wise spirit is known for being the cheapest out there. |
| 0:18.4 | To the point where the industry average margins are 2.6% plus profit 2.6% the last two years, spirit, |
| 0:26.3 | minus 8.5% this last year, year before, minus 11%, they're not making any money so recently they wanted to do a merger with |
| 0:35.8 | jet blue and guess who stopped the merger from taking place the US government you might |
| 0:41.2 | be asking why here here's why. |
| 0:43.2 | So Spirit Airlines faces uncertainty after an antitrust ruling |
| 0:48.0 | blocked its sale to JetBlue for $3.8 billion, a federal judge in Boston concurred with the Justice Department citing |
| 0:55.4 | consumer harm through reduced choices and increased fares. |
| 0:59.4 | So the judge sounds like he's coming from a noble place. |
| 1:01.7 | We don't want spirit to go away because let's help |
| 1:03.8 | him right? From the moment he says this, the judge, this is on the 16th, here's what happens to the Spirit stock. |
| 1:08.8 | It plummeted by over half since the ruling, prompting consideration of debt refinancing, it shares closed |
| 1:14.9 | Thursday at $5.70, down more than 60% from the previous week. |
| 1:20.4 | And by the way, they have a loan due in September of 2025. |
| 1:23.0 | This is a $1.1 billion loan at 8% which by the way this whole thing that corporate debt. |
| 1:28.0 | Corporate debt, corporate debt is coming out. |
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