If you’re brainstorming your next business venture, let me save you the trouble: stay clear of the airline industry (seriously, you’re better off starting a frozen yogurt stand). Sure, it might seem glamorous—jets, exotic destinations, flight attendants handing out complimentary snacks (if you’re lucky). 

But behind the mile-high facade lies an industry riddled with bankruptcies, debt, and cutthroat competition. In fact, since 2022, over 45 airlines have permanently grounded their operations. And 2024 isn’t looking any better, with 14 carriers already folding, including Canada’s Lynx Air and China’s OTT Airlines (who? exactly).

Let’s debrief the Spirit Airlines’ story for a prime example of why this industry might as well come with a “Do Not Enter” sign.

Spirit Airlines recently filed for Chapter 11 bankruptcy, handing over the keys to the company to its lenders in an attempt to restructure over $1.6 billion in debt. The low-cost carrier (famous for its dirt-cheap fares and charging for everything short of oxygen) had pinned its hopes on a merger with Frontier Airlines. But when that deal fell apart, so did Spirit’s financial safety net.

Facing $9 billion in liabilities, Spirit announced it couldn’t meet SEC filing deadlines, which is often corporate-speak for “we’re out of money, and it’s about to get ugly.” The airline struck a restructuring deal with noteholders to eliminate $795 million in debt, but the existing shareholders are getting zilch (can you imagine having your entire portfolio in this one stock?).

Spirit isn’t alone in its struggles. Since 2022, the airline graveyard has been filling up faster than a holiday flight to Cancun. Notable casualties include ExpressJet in the U.S., Flyr from Norway, and India’s GoFirst Airlines. These aren’t just small, regional players, either. High-profile failures signal deeper cracks in the industry’s foundation.

Even when airlines survive, they’re often forced to make brutal cuts. Spirit’s CEO, Edward Christie III, secured a small $3.8 million retention bonus just days before filing for bankruptcy (a move that probably didn’t sit well with employees or Spirit’s creditors). 

Spirit, once the fastest-growing U.S. airline, found itself grappling with too many planes flying to popular destinations and not enough demand to justify them. A recall of Pratt & Whitney engines powering Spirit’s Airbus fleet didn’t help either. Add to that the endless regulatory scrutiny—like the U.S. government blocking Spirit’s proposed merger with JetBlue—and you’ve got an industry where even the biggest players are hanging by a thread.

Unless you’ve got a spare billion dollars, a law degree, and a deep love for existential dread, stay away from the airline industry. It’s the business equivalent of flying Spirit itself: you’ll pay extra for every little thing, and there’s still a good chance you’ll end up stranded.

PS: Speaking of turbulence, how’s that stock guru you’ve been following? Still calling picks like a drunk pilot? 

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Stock.News does not have positions in companies mentioned.