Spirit Airlines shuts down, blames cost of fuel due to Middle East war
Bankrupt discount carrier Spirit Airlines ceased operations on Saturday, the industry’s first casualty linked to the Iran war, after failing to secure creditor support for a U.S. government bailout plan.
The collapse of the first carrier due to a doubling in jet fuel prices during the two-month-old war will cost thousands of jobs.
It is a blow to U.S. President Donald Trump, who had proposed $500 million US to save Spirit despite opposition from some of his closest advisers and many Republicans in Congress.
No U.S. carrier of Spirit’s size — it accounted for five per cent of U.S. flights at one point — has liquidated in two decades. Spirit helped keep fares lower in markets where it competed against major carriers.
A Spirit board meeting had ended without an agreement to rescue the company, a person close to the discussions told Reuters late on Friday.
Budget carrier Spirit Airlines ceased operations on Saturday after failing to secure creditor support for a U.S. government bailout plan. The airline’s collapse is the industry’s first casualty linked to the U.S.-Israeli war on Iran and a blow to U.S. President Donald Trump, who had proposed $500 million US to save Spirit.
“Unfortunately, despite the company’s efforts, the recent material increase in oil prices and other pressures on the business have significantly impacted Spirit’s financial outlook,” Spirit said in a statement announcing “an orderly wind-down of operations.”
Spirit built its brand around affordable fares for budget-conscious travellers ready to eschew add-ons like checked bags and seat assignments. That demand tapered off quickly after the COVID-19 pandemic, as passengers preferred to opt for comfort and experience-based travel, leaving ultra-low-cost carriers struggling to adapt.
Customers left in the lurch
All flights have been cancelled, the statement said, asking passengers not to go to the airport.
Spirit had 4,119 domestic flights scheduled between May 1 and May 15, offering 809,638 seats, according to data from aviation analytics firm Cirium.
U.S. Transportation Secretary Sean Duffy said in a statement on Saturday that the government is taking action to secure relief for those affected by the shutdown.
United, Delta, JetBlue and Southwest will be capping ticket prices for Spirit customers who now need to rebook cancelled flights. Also, United, American and Delta airlines will offer reduced fares on high-volume Spirit routes.
Most major U.S. carriers will also be extending travel pass benefits and spare jump seats to Spirit pilots, flight attendants and other employees who need to return home, and they will also offer “preferential employment,” according to Duffy.
Five Spirit flights were still showing as “on time” on Saturday morning on the departure board in Atlanta. A trickle of passengers who hadn’t heard the news…
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