A Spirit Airlines jet takes off above two United Airlines airplanes at Newark Liberty Airport on March 23, 2018 in Newark, New Jersey.
Gary Hershorn | Getty Images
LONG BEACH, Calif. — United Airlines CEO Scott Kirby on Thursday predicted Spirit Airlines is going out of business and said the once-profitable discount airline model is dead.
Spirit Airlines filed for Chapter 11 bankruptcy protection late last month for the second time in a year, after it failed to make deep enough changes during its first attempt only to be met with weaker customer demand and persistently high costs when it emerged in March.
Speaking at an industry conference here, when Kirby was asked by a moderator, airline industry journalist and podcaster Brian Sumers, why he thought Spirit was going to shut down, the CEO replied: “Because I’m good at math.”
Spirit has recently cut a dozen destinations while rivals like United, JetBlue Airways and fellow discount carrier Frontier Airlines have added flights to cities Spirit serves.
Kirby has criticized discount airlines for years, saying that the strong growth they relied on to help fuel profits wasn’t sustainable. On Thursday, he also railed against the model of charging low fares and fees for everything else, saying it sometimes surprised customers.
“You can’t have a business model that customers hate. You can’t have a business model predicated on ‘screw the customer,'” Kirby said Thursday.
Kirby also criticized the model at a different aviation event in Washington, D.C., on Wednesday, sparking a battle with Spirit.
“Scott is finally right about something – it is all about customers,” said a post on Spirit’s X account on Wednesday following Kirby’s initial comments. “Our Guests love low fares, especially our new Spirit First and Premium Economy options. Maybe that’s why United executives can’t stop yapping about us.”
Spirit didn’t comment further on Kirby’s remarks on Thursday.
Frontier and Spirit have started offering more bundles that include seats and baggage as well as more upmarket offerings like seats with more personal space. One major challenge for discount airlines is larger rivals’ success with basic economy fares, which also often come with more amenities, like carry-on bags and seat selection, as well as a broader international network.
Frontier CEO Barry Biffle late last month said the carrier wants to become the top ultra-low cost carrier in the U.S. It is currently a close second to Spirit, though Sprit has shrunk significantly over the past year.
United’s Kirby equated it to being the “last man on a sinking ship.”
“The business model doesn’t work,” he continued. Frontier didn’t immediately comment.