Spirit Airlines no longer exists.
The low-cost airline said early Saturday it would suspend all services immediately after running out of cash amid rising fuel costs and failing to secure a government bailoutor a loan from creditors to keep it afloat.
It was a disappointing but seemingly inevitable end for the famous low-cost airline, known for its big, bright yellow planes and ultra-cheap fares (but extra fees for almost everything else).
The airline had filed for bankruptcy twice since late 2024, including most recently last August.
Spirit had hoped to emerge from bankruptcy as a restructured airline this summer, but an 80% increase in the price of jet fuel since the start of the US war in Iran meant that even if it managed to emerge from bankruptcy, the revamped Spirit likely still would not have been able to turn a profit.
The sudden shutdown left thousands of travelers stranded across the country this weekend and left thousands more scrambling to try to save their shattered travel plans.
Beyond that, Spirit has about 9,500 employees, according to a source familiar with the matter, although that number rises to 17,000 if contractors, who are now out of work, are included.
COMPLETE TPG COVERAGE: Spirit Airlines closes
Months of uncertainty
Spirit’s shutdown comes after months of uncertainty and speculation that the end of the carrier’s operations could be near.
The airline nearly ran out of cash during the holiday travel season but managed to get a last-minute injection from its creditors. Several weeks ago, other reports suggested the airline was days or weeks away from being forced to close and liquidate.
While Spirit had approached the federal government to request a $500 million bailout, some of Spirit’s creditors opposed such a deal, which would see the government take up to 90% of Spirit’s stock, while some other airline executives and politicians also opposed such a deal.
It was also unclear whether a bailout would actually help turn things around or simply delay the inevitable.
A long financial struggle
The spirit has been Cutting routes and personnel. for months as it tries to stem its losses, and closes as a much smaller airline than it was in its heyday.
The airline struggled to return to profitability after the pandemic, even as competitors were able to take advantage of travel demand after lockdowns and remain successful since. One of the main headwinds was an ongoing problem with the Pratt & Whitney engines powering the airline’s fleet of A320neo family aircraft, which has grounded dozens of the airline’s planes. While the airline received compensation, it was not enough to offset the suspension of service.
In 2022, Frontier and Spirit announced plans to merge, before JetBlue made a higher bid to acquire Spirit, which was accepted by the shareholders. The Biden Administration sued the airlines to try to block the merger, claiming it would be anti-competitive and lead to higher prices for consumers.
During a four-week trial in federal court in Boston, which TPG Covered ExtensivelySpirit argued that I probably couldn’t survive without some form of merger, while JetBlue argued that by coming together, the combined airline could compete more effectively with the four major US airlines (American Airlines, Delta Air Lines, Southwest Airlines and United Airlines) which together control about 80% of the US air travel market.
the fusion was blocked by Judge William G. Young, appointed by President Ronald Reagan, who wrote that, under the Clayton Act of 1914, the merger was anticompetitive.
“Spirit is a small airline. But there are those who love it,” Judge Young wrote in the decision.
“For those dedicated Spirit customers, this one’s for you,” he added.
In its statement Saturday, the DOT took partisan aim at the previous administration for blocking the merger.
Spirit has spent the last year trying reposition itself as a dynamic airline both with its famous low-cost base fares with a la carte pricing for add-ons, and with things like packaged fares that include things like in-flight snacks and even first-class seats, trying to take advantage of the post-pandemic discovery that premium income is increasingly crucial for US airlines.
However, it appears to have been too little, too late.
The end of the ‘bus with wings’
Spirit’s death represents the end of a historic low-cost airline that, despite any complaints people may have had, offered reduced fares that made travel more accessible to more people.
Unbundled fares, with add-ons for everything from baggage to seat selection, proved so competitive that they forced traditional airlines to introduce basic economy class. Spirit, for example, was the first airline to start charging for carry-on luggage.
Still, you always knew what you were getting with Spirit. The airline was proud of its scrappy, frugal image, and rarely shied away from it. The airline’s former CEO, the late Ben Baldanza, who pioneered the lean business model in the US and transformed Spirit into the budget airline we all know today, famously He referred to the airline as “a dollar store in the sky” and “buses with wings.”
And as recently as 2019, the model worked: Spirit turned a profit during the pandemic.
But competition from basic economy fares from larger airlines, with more flights on the same routes, better reputations and enticing loyalty programs bolstering the basic offering, proved to be another blow to Spirit.
Spirit Airlines began as a charter airline in the 1980s, before changing its name to Spirit and beginning scheduled service in the early 1990s.
As for what happens next: Spirit’s creditors will liquidate the airline’s assets to recoup their costs, selling everything from aircraft and leases to gates and slot machines, ground equipment and even everyday items like desktop computers and office furniture.
This is a developing story. Stay tuned to TPG for more information on what consumers affected by the closure can do and for updated news on Spirit’s closure.
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