Bankrupt discount carrier Spirit Airlines ceased operations on Saturday, becoming the airline industry’s first casualty of the Iran war after failing to secure creditor support for a US government bailout plan.
The collapse of the carrier, which once accounted for 5 percent of US flights and helped keep fares competitive, is a blow to President Donald Trump, who had proposed $500 million to save Spirit.
“If we could do it, we’d do it. But only if it’s a good deal,” Trump had said.
Spirit’s shutdown follows a doubling of jet fuel prices in two months, driven by the US-Israeli strikes on Iran that disrupted traffic through the Strait of Hormuz. Global carriers are contending with surging fuel costs, with jet fuel accounting for about a quarter of airlines’ operating expenses — exposing weaker carriers.
In a statement, the airline said: “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 had built its business on affordable fares for budget travellers who did not need checked bags or seat assignments. However, demand tapered after the pandemic, when passengers began seeking more comfort.
The airline’s shutdown will benefit its rivals. After the announcement, major US carriers rolled out reduced fare options for affected passengers.
US Transportation Secretary Sean Duffy said action is being taken to bring relief to Spirit’s workforce and customers.
“Even American and United have drafted or crafted microsites for Spirit employees to potentially jump the queue and get preferential treatment in the application process for the many airlines who are now hiring — whether it’s pilots, flight attendants, baggage workers or even those who work in the call centres,” he said.
Sources: Reuters
