Major US carrier Spirit Airlines goes bust after surge in jet fuel prices

Dozens of passengers have been stranded and thousands of employees have been laid off following the closure of US low-cost carrier Spirit Airlines.

“All Spirit flights have been canceled and Spirit guests are not allowed to go to the airport,” the airline said in a statement.

Passengers arrived at airports across the US this morning to find check-in counters cleared and signs announcing that all flights had been canceled and customer service was no longer available.

Spirit cited rising jet fuel costs, which have more than doubled since the war in the Middle East broke out in February, along with “other pressures on the company” due to the shutdown, which will leave 17,000 employees without jobs.

“In March 2026, we reached an agreement with our bondholders on a restructuring plan that would have enabled us to grow into a progressive company,” said Dave Davis, President and Chief Executive Officer of Spirit.

“The sudden and sustained increase in fuel prices in recent weeks has ultimately left us with no other alternative than to pursue an orderly wind-down of the company.”

Keeping the company alive would have required hundreds of millions of dollars that the airline “simply doesn’t have and couldn’t acquire,” Davis said.

“This is hugely disappointing and not the outcome any of us wanted,” he said.

Spirit’s bankruptcy has raised concerns that other low-cost airlines could be next.

But the airline faced major challenges before the conflict broke out, including large debts, two bankruptcies within a year and a failed government bailout bid just weeks ago.

After failing to recover from the COVID-19 pandemic, the airline filed for bankruptcy in November 2024 after losing more than US$2.5 billion ($3.5 billion) since the start of 2020.

Spirit sought bankruptcy protection for a second time in August 2025, reporting $11.2 billion in debt and $11.9 billion in assets.

A major restructuring followed, seeking to reduce flights and operating costs by firing and demoting pilots and flight attendants.

Spirit told creditors that the restructuring would allow them to post a net profit of $304 million by 2027.

But just six months later, on April 18, the airline asked the US government for an emergency response operation.

Rescue negotiations with the Trump administration, reportedly worth $500 million, have collapsed in recent days, prompting the airline’s collapse today.

The airline served destinations in the US, Central America, the Caribbean and South America.

According to Cirium’s analyses, around 9,000 flights were planned until the end of May, potentially impacting millions of passengers during the month.

Refunds will be processed for affected customers who booked directly with the airline, Spirit said, while passengers with third-party bookings should contact their travel agent.

“Compensation for guests who booked flights using another method, including a voucher, credit or Free Spirit points, will be determined at a later date,” Spirit said.

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