Hey, everybody, economic ninja here. I hope you’re doing great. You know who’s not doing great? Spirit Airlines. And this is something that we were speaking about on this channel two years ago about the epic cycles in this economic downturn. And one of the downturn signs were going to be travel and leisure, how they were going to get hit. And then I spoke about specifically low end travel and leisure, like the discount places, the discount hotels, discount airlines.

They are going to be the first ones to go. And the reason why is because of the type of consumer they go after, they attract, because those consumers are going to be the first to be squeezed, following the upper middle class and then the wealthy. I know it sounds crazy. Those two cycles are about to hit, too. And right now we’ve got this story about spirit. As a matter of fact, spirit’s been in the headlines for a while because of a merger they’ve been trying to do, and it was stopped.

And now it is the airline that is flying without passengers, almost like the emperor with no clothes. But this is really how these cycles play out. Check out this story. It’s outofthestreet. com. It’s entitled Spirit just made an announcement that signals more bad news. It says while its rock bottom ticket prices have earned it a following of loyal fans, the Florida based Spirit Airlines has been facing problems, serious financial problems.

Now, I’ll be honest with you, the only spirit that I see from that airline is the spirit that’s crushed when you get shoved in like a tuna, into a tuna can in their airlines and then charged for even the air that you breathe, it says. In its latest earnings call last February, the budget airline had reported a net loss of $183 million, or $1. 68 per share. While this is an improvement from the 270 million it reported for the same quarter a year ago, it adds to the series of unprofitable quarters dating back several years.

After a federal judge blocked the JetBlue Airways Hail Mary plan to acquire Spirit for $3. 8 billion this last February, the airline’s financial future landed under the microscope as several financial analysts floated the possibility of a bankruptcy, laying off pilots, delaying new planes. Spirit announces new austerity measures. This is how bad it’s getting. And I want to remind people, let me do this. Hashtag pilot, hashtag mechanic, hashtag stewardess.

If you are one of those positions in an airline, and what you need to understand is that the Supreme Court set a precedence. Back in 2005 2007, many airlines were completely broke. Why? Because they were in the exact same cycle that we find ourselves now. Consumers weren’t spending money. They weren’t traveling as much. And the airlines got completely over bloated during a housing boom. Please realize where we are right now.

And then they went broke, claimed bankruptcy, and they went to the Supreme Court and said, hey, we need, and I’m paraphrasing this, we need to steal everybody’s pension money, and then you’re going to let us do it legally and stay open. And there were many people, I’ve ran into pilots all over the country that have recognized the channel because they watched those videos of me talking about the airline industry and showing you back in history how the Supreme Court let airline companies legally steal their pension fund and then wipe people out so they could stay open.

And the message was, don’t worry, because if we go broke, yeah, you may have your pension fund money, but you’re not gonna have a job. And the situation was so dire. This is seriously happening right now before your eyes. And today it’s Spirit Airlines. Tomorrow, what airline is next? Now, it said, Spirit started the week by announcing its efforts to improve liquidity, including placing 260 of the pilots who work on it on furlough and delay laying the deliveries of new Airbus planes that it had planned to purchase from 2025 into 2030.

2031. This amendment to our agreement with Airbus is an important part of Spirit’s comprehensive plan to bolster profitability and strengthen our balance sheet, Spirit’s CEO, president and president, Ted Christine said in a statement. Deferring these aircraft gives us the opportunity to reset the business and focus on the core airline, where we can adjust to changes in the competitive environment. I wonder how many millions or even billions they lost in deposits.

Christie also added that this does not affect the delivery schedule of the spirit planes that they’d order for 2027 and 2028 because they already bought them. The affected pilots will go on furlough from September 1 and were informed in a memo that they will be called back if something changes and the airline is able to pay them again. How many airline pilots right now do you think are just walking away and going, I’m going to another carrier because I can see where this is going.

There’s something wet in Denmark now he goes on the CEO, while he’s trying to hold his company together. And this is what’s scary. And people need to understand this. Supreme Court has already set a precedent. The airlines can go and grab and steal your pension fund. This is serious stuff. This is why four years ago I started saying, prepare for this economic crash like you don’t have a pension.

I had to personally do that as a firefighter. And now I look back and I go, I never thought that I would have pulled the plug myself. Crazy times. But when you’re prepared for those times, you can make those extraordinary, crazy decisions that might lead to the greatest move of your life financially. Now it says here, this is what the president keeps on saying. I’m extremely proud of our dedicated spirit team for their focus and their resilience.

Resilience over the last few years. Christy said further, unfortunately, we had to make some difficult decisions to furlough pilots, given the grounded aircraft in our fleet and our deferral of future deliveries. Hashtag or how’s this? Hashtag no. If you don’t think for a second. The CEO and president of spirit took up a pay cut as he’s trying to calm his employees and say, hey, so nice. You’re so resilient, and I could send you home and not pay you and, you know, but I’m gonna get paid.

That’s exactly what’s going on. That’s the truth. I would almost bet money that he has not taken a pay a cut. Now, I could be wrong and let me know if I am wrong, but I’m pretty sure I see how these shake out. In 2005, 2006, United and other airlines were wrecked financially and emotionally when they were robbed of their pensions. It’s coming again. Now, he gave the usual corporate talking points, doing everything we can to protect team members, while also being mindful to its responsibility to return to positive cash flow and thrive as a healthy company with long term growth prospects.

Spirit stock immediately responded to the change and rose nearly 5%. See, isn’t that nice? Everything is awesome. The stock is doing great because we’re essentially laying people off. So we’re saving money by our stock. But let me ask you this. Where do you think the stock is ultimately headed? Higher or lower, based off of the facts? The truth is, a lot of spirit airlines employees right now are probably thinking about jumping ship and diving into another airline.

Now, I just recently checked American Airlines. They’re not hiring at all. In my region, there are other companies they’re not hiring. They’re full to capacity. This is a big deal. And I hope people wake up to this, because it’s not only if you work for an airline or you don’t. You’re seeing the signs of a collapsing economy. The CEO’s, the C suite execs, the bankers, they’re going to be fine.

Even if their banks or their airlines go broke. They’ll just fire up a new one. It’s just an entity. It’s just a placeholder. They look at you as a placeholder. We need to build businesses in America. Small to medium enterprises. We need to start up again, because these conglomerates have gotten way too big and they go to the supreme Court or they go to Congress, like the banks did in zero eight, and say, if you want to avoid blood in the streets, you’ll bail us out.

We’re in serious times, people hope people are getting ready. The economic ninja is out. .

See more of The Economic Ninja on their Public Channel and the MPN The Economic Ninja channel.