Spirit Airlines, a U.S. ultra-low-cost carrier, has announced it is ceasing operations after oil prices surged due to the Iran war, worsening its already poor situation.
Foreign news agencies reported that Spirit Airlines, a budget carrier in bankruptcy, ceased operations on Saturday, 2 May 2026 GMT+7. It is the first airline in the industry to shut down for reasons linked to the "Iran war" after failing to obtain creditor approval for a U.S. government financial rescue plan.
The collapse of this first airline was caused by jet fuel prices doubling during the two-month-long Iran war.
This event is considered a political loss for President Donald Trump, who proposed a $500 million bailout to save Spirit Airlines despite opposition from close advisors and many Republican members of Congress.
Spirit Airlines, which once held a 5% share of U.S. flights, is the largest U.S. airline to close in the past two decades. It had played a significant role in helping to keep fares low in a market competing with major carriers.
"It is regrettable that despite the company’s best efforts, the rapidly rising average oil prices recently, along with other business pressures, have significantly affected Spirit’s financial outlook," the airline said in a statement announcing a "phased cessation of operations."
The statement also said all flights have been canceled and asked passengers not to travel to airports.
Data from Cirium, an aviation data analytics company, showed that between 1–15 May, Spirit had scheduled 4,119 domestic flights with a total seating capacity of 809,638 seats.
Airlines worldwide have been facing soaring jet fuel prices since the U.S. and Israel launched attacks on Iran on 28 February, prompting Tehran to respond by closing the Strait of Hormuz, a critical global oil shipping route, triggering an energy price crisis.
The war represents the most severe crisis for the aviation industry since the COVID-19 pandemic. Spirit had already been struggling to turn a profit before confronting this fuel price crisis.
Spirit Airlines built its brand reputation by offering low fares to value-conscious travelers willing to forego add-ons such as checked baggage or seat assignments.
However, demand for such services declined after the COVID-19 pandemic as passengers shifted focus toward comfort and experience, forcing ultra-low-cost carriers like Spirit to struggle to adapt.
Spirit’s closure will benefit competitors JetBlue Airways and Frontier Airlines, which are also struggling with high costs. On Friday, Spirit’s volatile over-the-counter stock plunged 25%, while Frontier’s rose 10% and JetBlue’s increased 4%.
To signal readiness to fill the void, JetBlue announced an expansion at Fort Lauderdale Airport, one of Spirit’s main hubs, adding routes to 11 new cities and increasing frequencies on existing routes.
On Friday, Trump said the White House had made a final bailout offer to Spirit and its creditors after negotiations stalled over a $500 million support package aimed at keeping the airline operational during bankruptcy proceedings.
"If we can help them, we will, but we have to put the country's interests first," Trump told reporters. "If we can do it, we will, but it has to be a good deal."
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Source:cna