Low-cost carrier Spirit Airlines Inc., long famous (or perhaps infamous) for its barebones service, is in dire straits. The stock price is hovering near record lows. Talk of a possible bankruptcy is growing louder after its potentially lifesaving merger with JetBlue fell apart. But while Spirit’s fate has very real implications for its employees and customers, its struggles are also a reminder that the airline business is one of the most fluid, and competitive in the world, defined by microscopic margins, high debt and ruthless battles for market share.

It wasn’t always so. Prior to the 1970s, the airline business was a highly regulated, very profitable industry, with almost no low-cost carriers. Then an unlikely coalition of lefty activists, free-market economists and publicity-hungry politicians took a sledgehammer to this arrangement, launching a mania for deregulation. How that happened offers a case study in how to unleash market forces — and the unanticipated consequences of doing so.

QOSHE - Deregulation Gave Us Cheap Flights — and Airline Chaos - Stephen Mihm
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Deregulation Gave Us Cheap Flights — and Airline Chaos

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19.03.2024

Low-cost carrier Spirit Airlines Inc., long famous (or perhaps infamous) for its barebones service, is in dire straits. The stock price is hovering near record lows. Talk of a possible bankruptcy is growing louder after its potentially........

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