Spirit Airlines winds up biz for jet fuel price hike
The airlines announced early Saturday morning that it had started winding down its operations
ATT Desk Report
Insolvent carrier Spirit Airlines halted operations on Saturday, the industry's first fatality linked to the Mideast war, after failing to achieve support for a US government bailout plan, reports international media outet CBC.
The collapse of the first carrier due to a doubling in jet fuel prices during the two-month-old Iran war will cost thousands of jobs. It is a blow to 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 US carrier of Spirit's size, it accounted for 5 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.
All flights cancelled
A Spirit board meeting had ended without an agreement to rescue the company a person close to the discussions told Reuters late on Friday.
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.
A spokesperson said Spirit had notified the Federal Aviation Administration before halting operations, declining to comment further.
Global carriers are contending with surging jet fuel prices after the U.S.-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz.
Spirit was already struggling to turn a profit before the fuel shock.
Spirit built its brand around affordable fares for budget-conscious travelers ready to eschew add-ons like checked bags and seat assignments.
Spirit's shutdown will benefit its rivals like JetBlue Airways and Frontier Airlines, who themselves are reeling from the cost shock. Spirit's volatile over-the-counter stock plunged 25 per cent on Friday, while Frontier rose 10 per cent and JetBlue gained 4 per cent.
Fuel-price shock threatens weaker airlines
The collapse shows how the Iran war's fuel-price shock has exposed weaker airlines.
Spirit's restructuring plan assumed jet fuel costs of about $2.24 a gallon in 2026 and $2.14 in 2027, but prices had climbed to around $4.51 a gallon by the end of April, leaving the carrier unable to survive without fresh financing.
