Popular US budget carrier Spirit Airlines has officially shut down its operations, citing massive financial losses driven by soaring global fuel prices linked to the ongoing Iran war.
The airline confirmed the closure in an official statement on Saturday, adding that all flights have been cancelled and ticket refunds are being processed. Analysts say the shutdown marks a major shock for the American aviation industry, where Spirit was known as a pioneer of low-cost air travel.
Financial Collapse Despite Bankruptcy Protection
Spirit Airlines said it had twice filed for bankruptcy protection in 2024 and 2025, but failed to recover from mounting losses. The company cited unprecedented jet fuel price increases as the final blow.
Chief Executive Officer Dave Davis said:
“Business required several hundred million dollars to survive.
But we were unable to raise the funds.”
Oil Crisis and Global Impact
The crisis has been linked to the Iran war and disruption in the Strait of Hormuz, through which nearly 20% of global oil supply passes.
According to JPMorgan analysts:
“If oil prices continue rising, the airline’s costs would have increased by $360 million this year alone.”
Failed Rescue Attempts
US President Donald Trump reportedly proposed a $500 million bailout plan, including the possibility of the government taking up to 90% ownership of the airline. However, the plan collapsed after failed debt restructuring negotiations with bondholders.
Political Blame Game
US Transportation Secretary Sean Duffy blamed previous policy decisions, stating that the airline’s fate could have been avoided if regulatory approval for its merger with JetBlue in 2023 had not been blocked during the Biden administration.
Wider Aviation Crisis
The shutdown puts nearly 14,000 employees at risk of unemployment. Experts warn that the crisis is affecting global aviation, with airfares rising by around 37% worldwide.
Other airlines, including Ryanair and Vietnam Airlines, are reportedly considering route cuts due to rising operational costs.
