US carrier Spirit Airlines, often described as pocket-friendly, announced that all flights have been cancelled as it began an “orderly wind-down of operations.” The move followed reports that a potential White House bailout had fallen through.
“Spirit Aviation Holdings, Inc., parent company of Spirit Airlines … today regretfully announced that the Company has started an orderly wind-down of operations, effective immediately. All Spirit flights have been cancelled, and Spirit Guests should not go to the airport,” the airline said in a statement on Saturday.
Customers holding tickets for future Spirit flights are entitled to full refunds if the airline goes out of business, US media report. Refunds for flights purchased directly from Spirit with a credit or debit card would be processed automatically by the airline.
After the announcement, major US carriers introduced rescue-fare options to help affected passengers rebook travel.
A casualty of the Middle East war?
Spirit Airlines has been described as the industry’s first casualty linked to the Iran war, after it failed to secure creditor support for a proposed US government bailout. The carrier’s collapse, following a doubling in jet fuel prices during the two-month-old conflict, threatens thousands of jobs.
Spirit had reached an agreement with lenders intended to allow it to emerge from its second bankruptcy by late spring or early summer. Those plans unraveled after the war triggered a spike in jet fuel costs, disrupting Spirit’s financial projections and complicating its planned exit from bankruptcy.
The collapse is a political setback for President Donald Trump, who had proposed $500 million to rescue Spirit despite opposition from some advisers and many Republicans in Congress. No US carrier of Spirit’s size—at one point accounting for about 5% of US flights—has liquidated in two decades. Spirit’s presence helped keep fares lower in markets where it competed with major carriers.
