John Ostrower

airlines to more rapidly adapt and absorb the parts of their model that were most successful.

And so a few things happen.

Number one, I think you have to start with sort of how did Spirit grow as quickly as they did?

And the big answer is cheap money, low interest rates, right?

You know, they were able to get their planes for low capital costs, and that allowed them to build capacity quickly.

And the airline business is a scale game, especially in the US, where you've got huge carriers that you have to go up against.

And so when the pandemic happens and inflation skyrockets after the pandemic and interest rates go up, airplanes become a lot more expensive.

Capital becomes a lot more expensive.

And oh, by the way, with inflation, you have really taken a hit to the bottom 30 percent of the market.

Most price sensitive travelers really need cheap tickets.

That's how they travel.

That's how they want to travel.

And, you know, whether it's for vacation or for business that, you know, people

Price sensitive makes sense, right?

There is still a big portion of the industry that does pick on ticket price.

Okay, we know that part of it.

Here's the wrinkle here that I think is not well appreciated.

During from like the period of like 2012 to 2020, the major airlines tried to take their business model, Spirit's business model, which was these basic economy tickets.

By the end of last decade, they were pretty well adopted.

Get ready for middle seats.