Tailwinds and the call
Beyond my personal issues with Spirit’s business model, there do seem to be some outside factors that bode well for the company going forward. As mentioned in a recent interview on CNBC, Spirit CEO Ben Baldanza believes the merger between American Airlines and US Airways Group, Inc. (NYSE:LCC) will increase prices for legacy carriers and widen the gap between discount airlines and the others, thus creating a bigger runway for growth.
From my understanding of the merger, this could happen, but it’s not a guarantee. Both American and US Air reps have said multiple times that this does not necessarily equal an increase in fares, though analysts have often disagreed. Assuming Baldanza is correct, though, passengers may be more inclined than ever to try out Spirit and its Evian-priced tap water.
In a recent article, I touted Alaska Air Group, Inc. (NYSE:ALK) as the airline to go with if you’re intrigued by the “renaissance” period of airlines and want to invest. I like Alaska’s doubleheader of growing routes while earning more per seat per mile, its profitable West Coast niche, and, most importantly, its free water.
The article Is Spirit Air Worth the Water? originally appeared on Fool.com and is written by Michael B. Lewis.
Fool contributor Michael B. Lewis has no position in any stocks mentioned. The Motley Fool owns shares of Spirit Airlines.
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