Spirit declares bankruptcy, cancels all its flights, and leaves thousands of travelers stranded at airports

Spirit Airlines, the leading American low-cost airline, announced its bankruptcy and the immediate liquidation of its business, canceling all its flights, leaving thousands of passengers stranded.

This collapse, which came as a result of two previous bankruptcies and failed attempts to obtain a government rescue plan, represents the first case of the collapse of a major American airline in decades, as the fate of about 17,000 employees and contractors is up in the air.

According to the “Axios” website, the company’s CEO, Dave Davis, attributed the reasons for the collapse in an official statement to “the sudden and continuous rise in fuel prices in recent weeks,” noting that maintaining business continuity required hundreds of millions of dollars of liquidity that the company no longer possesses.

The company’s crisis is directly affected by the large jump in jet fuel prices resulting from the repercussions of the Iran war, which represented the straw that broke the company’s back, after it was preparing to implement a deal to emerge from bankruptcy.

Refunds for customers

The company assured its customers who booked their tickets using credit or debit cards that their money will be refunded automatically. While it called on travelers who booked through travel agents to review their agents directly. As for those holding reservations through vouchers or points, the mechanism for their compensation will be determined later through bankruptcy procedures.

Major airlines, including United, American, and Southwest, were quick to intervene and offer exceptional discounted prices to help Spirit passengers stranded at airports.

High ticket prices

Aviation experts expect that the exit of Spirit – which controlled a large share of the American market and was considered the eighth largest airline in the country – will lead to a significant increase in air ticket prices, given the absence of the fierce competition that the company was imposing by offering very low prices.

Billion-dollar losses and political controversy

The company – which was founded in 1964 and changed its name to “Spirit” in 1992 – suffered from chronic challenges, and incurred losses amounting to about $5.9 billion between 2020 and 2025.

This collapse has reopened the door to political controversy in the United States, where the Trump administration blames the Biden administration for obstructing the merger of Spirit with JetBlue in early 2024 under the pretext of preventing monopoly, which was seen as a last lifeline for the company.

It is now expected that the company’s assets, which include 166 leased aircraft and 48 owned aircraft, will be liquidated, which will create new opportunities for the remaining competing companies in the market, but at the same time, as experts see, it marks the beginning of “a new era of high aviation prices.”