had proposed US$500 million (S$635 million) to save Spirit<\/a> despite opposition from some of his closest advisers and many Republicans in Congress.<\/p>\nNo US carrier of Spirit\u2019s size \u2013 it accounted for 5 per cent of US flights at one point \u2013 has liquidated in two decades. Spirit helped keep fares lower in markets where it competed against major carriers.<\/p>\n
A Spirit board meeting ended without an agreement to rescue the company, a person close to the discussions told Reuters late on May 1.<\/p>\n
\u201cUnfortunately, despite the company\u2019s efforts, the recent material increase in oil prices and other pressures on the business have significantly impacted Spirit\u2019s financial outlook,\u201d Spirit said in a statement announcing \u201can orderly wind-down of operations\u201d.<\/p>\n
All flights have been cancelled, the statement said, asking passengers not to go to the airport.<\/p>\n
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.<\/p>\n
A spokesperson said Spirit had notified the Federal Aviation Administration before halting operations, declining to comment further.<\/p>\n
Global carriers are contending with surging jet fuel prices after the US-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz. <\/p>\n
Spirit, which built its brand around affordable fares for budget-conscious travellers ready to eschew add-ons like checked bags and seat assignments, had already been struggling to turn a profit before the fuel shock. <\/p>\n
Demand for such flights 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.<\/p>\n
Spirit\u2019s shutdown will benefit its rivals like JetBlue Airways and Frontier Airlines, which themselves are reeling from the cost shock. <\/p>\n
Spirit\u2019s volatile over-the-counter stock plunged 25 per cent on May 1, while Frontier rose 10 per cent and JetBlue gained 4 per cent.<\/p>\n
Mr Trump said on May 1 that the White House had given Spirit and its creditors a final rescue proposal, after talks hit an impasse over a US$500 million financing package that would have helped the airline keep operating through bankruptcy.<\/p>\n
\u201cIf we can help them, we will, but we have to come first,\u201d Mr Trump told reporters. \u201cIf we could do it, we\u2019d do it, but only if it\u2019s a good deal.\u201d<\/p>\n
The collapse shows how the Iran war\u2019s fuel-price shock has exposed weaker airlines.<\/p>\n
Spirit\u2019s restructuring plan assumed jet fuel costs of about US$2.24 a gallon in 2026 and US$2.14 in 2027, but prices had climbed to around US$4.51 a gallon by the end of April, leaving the carrier unable to survive without fresh financing.<\/p>\n
Transportation Secretary Sean Duffy told Reuters he had tried to get many airlines to buy Spirit but found no takers. <\/p>\n
\u201cWhat would someone buy?\u201d Mr Duffy asked. \u201cIf no one else wants to buy them, why would we buy them?\u201d<\/p>\n
A creditor close to the deal said: \u201cThe Trump administration made an extraordinary effort to try and save Spirit, but you can\u2019t breathe life into a corpse. <\/p>\n
\u201cGiven that, the company should make its intentions clear for the sake of its customers and employees.\u201d<\/p>\n
Spirit had reached a deal with its lenders that would have helped it emerge from its second bankruptcy by late spring or early summer. But those plans derailed after the war triggered a spike in jet fuel prices, upending Spirit\u2019s cost projections and complicating its bankruptcy exit.<\/p>\n
The airline flew around 1.7 million US domestic passengers in February, with a 3.9 per cent market share, down from 5.1 per cent in 2025, Cirium data showed.<\/p>\n
After Spirit\u2019s announcement, major US carriers rolled out rescue-fare options for affected passengers. <\/p>\n
Frontier announced systemwide discounts and plans to add summer routes, JetBlue offered US$99 fares through May 6, Southwest Airlines introduced special fares, United Airlines capped prices on one-way tickets and American Airlines added rescue fares while reviewing options to boost capacity on key routes.<\/p>\n
In April, Mr Trump said his administration was looking to buy the embattled carrier at the \u201cright price\u201d.<\/p>\n
Sources said that the administration had proposed US$500 million in financing in exchange for warrants equivalent to 90 per cent of Spirit\u2019s equity.<\/p>\n
There had been disagreements inside the Trump administration over whether and how to fund the bailout, The Wall Street Journal reported, citing people familiar with the matter. REUTERS<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON \u2013 Bankrupt American discount carrier Spirit Airlines ceased operations on May 2, the industry\u2019s first casualty linked…\n","protected":false},"author":2,"featured_media":645242,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[43,44,41,39,42,40],"class_list":["post-645241","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-headlines","tag-news","tag-top-news","tag-top-stories","tag-topnews","tag-topstories"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/645241","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=645241"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/645241\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/645242"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=645241"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=645241"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=645241"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}