The largest low-cost airline in the U.S. is shutting down immediately, leaving thousands of passengers and employees in limbo. The decisive factor was the sharp rise in aviation fuel prices due to the U.S. war with Iran.
American budget airline Spirit Airlines has announced an immediate cessation of operations.
According to NBC News, all flights were canceled by Saturday morning, and the check-in counters at airports were empty, with no staff or assistance for passengers. The company's statement on its website simply said that "all flights are canceled, and customer service is no longer available."
This refers to a de facto instant halt of business, affecting thousands of scheduled flights and about 17,000 employees.
The company was struggling even before the war in Iran
Spirit Airlines was unable to recover from the COVID-19 pandemic and had been experiencing a prolonged financial crisis for a long time. Over the past year, the carrier went through bankruptcy twice and attempted to find a way out of its debt burden. However, as NBC reports, the decisive factor was the sharp rise in aviation fuel prices amid the war with Iran. The company acknowledged that the spike in oil prices and overall pressure on the business severely worsened its financial outlook.
CEO Dave Davis stated that hundreds of millions of dollars were needed to continue operations, which the company did not have and could not raise. Negotiations with investors and attempts to secure support from U.S. authorities literally just before the closure ended without results.
Chaos for passengers
The closure of Spirit Airlines was sudden. Many learned about it at the last moment and were forced to urgently search for new tickets at significantly higher prices. One passenger told NBC that she was supposed to fly to a wedding but learned about the closure just before heading to the airport and is now unsure if she will be able to attend the event due to expensive alternative flights.
The company promised to automatically refund passengers for tickets that had already been purchased directly from Spirit Airlines; however, additional expenses, such as hotels or urgent purchases of new tickets, will not be reimbursed.
Reaction from authorities and the airline market
U.S. authorities and major airlines began to respond urgently to avoid a transportation collapse. Other carriers agreed to cap ticket prices for Spirit passengers and offer so-called "rescue fares." At the same time, efforts are underway to employ the staff of the closed airline. Some carriers have already announced the expansion of routes and an increase in the number of flights to fill the vacated destinations.
Spirit Airlines was a symbol of ultra-low-cost flights in the U.S., offering the lowest ticket prices and charging for any additional services. In the mid-2010s, the company was among the most profitable carriers in the country and was valued in the billions of dollars. However, an attempt to merge with JetBlue was blocked by regulators, after which the financial situation began to deteriorate rapidly. Rising costs and declining demand for budget flights ultimately undermined the sustainability of the business.
Overall situation: pressure on aviation is increasing
The story of Spirit fits into a broader crisis in global aviation. Due to the conflict surrounding Iran, aviation fuel prices have sharply increased, and oil supplies through the Strait of Hormuz are under threat. This leads to higher ticket prices, reduced flights, and increased financial pressure on airlines. Experts warn that if the current situation persists, the industry may face new bankruptcies, reports "Deutsche Welle."
