For some, the bright yellow plane served as a constant joke, symbolizing Bargain Sale’s lackluster service. For others, it meant a lifeline that provided the low fares needed to travel by air. Right now, Spirit Airlines’ site has just one simple message: “Spirit guests should not go to the airport.”
The Florida-based airline abruptly ceased operations on May 2 after years of stalling, including filing for bankruptcy in November 2024, with parent company Spirit Aviation Holdings “regrettably announcing that the airline has begun an orderly winddown effective immediately.”
This caused Spirit to go out of business and all flights to be canceled, leaving passengers and crew stranded. And it ended the company’s pioneering of the ultra-low-cost carrier (ULCC) model of airline pricing by unbundling all-in fares to lower the base cost of a ticket.
“Spirit’s collapse is not so much a sudden shock as the final chapter in a structural story that has been unfolding for years,” Jungho Suh, a business professor at George Washington University Business School who studies the travel industry, told Afar. “The rise in oil prices caused by the Iran war affected companies that had already exhausted all options.”
Although late-night shows mocked the airline’s closure, there was a very real impact among airline loyalists, with nearly 300 flights per day and an estimated 60,000 passengers lost. The sentiment was so strong that social media star Hunter Peterson launched LetsBuySpiritAir.com, and more than 370,000 people have already pledged $337 million for the Spirit 2.0 reboot.
For employees, it’s a completely different matter. All of Spirit’s 17,000 former staff members are now unemployed.
“We have had an unrelentingly stressful two years with a failed merger, multiple furloughs, two bankruptcies, and concessional negotiations,” Capt. Ryan Mueller, chairman of the Spirit Airlines Master Executive Council, a chapter of the Airline Pilots Association (ALPA), said in a statement provided to Afar. “We persevered to the end and did everything we could. … This is devastating news for Spirit pilots and all Spirit employees.”
what went wrong
Headquartered in Dania Beach, Florida, Spirit operated an all-Airbus domestic route primarily throughout the East and Midwest, with limited international service to leisure destinations such as Costa Rica, Mexico, and the Caribbean.
Since its first commercial flight in 1992, Spirit had established a reputation for offering passengers the lowest possible fares based on a la carte service. Airline amenities such as seat assignments, carry-on baggage, drinks, and snacks have traditionally been bundled together as part of the airline’s fare and require an additional fee. However, this now allows passengers to customize airfares based on their needs.
As the business model took off, legacy U.S. carriers became so threatened that they introduced basic economy fares in the 2010s, lowering fares by removing previously included service elements such as snacks and seat selection. “When major airlines began to match Spirit’s price point on key routes, Spirit’s core value proposition was undermined,” Hsu said.
However, over time, passengers became less interested in that approach and more often saw the add-on as a means to make a profit. Spirit will shrink its network from 2024 to 2025, and an April 2026 analysis referenced by Hsu showed fares rose about 14 percent on the routes Spirit pulled. For some passengers, round-trip fares increased by more than $100 compared to when Spirit was in service, putting a strain on loyal passengers who were used to lower fares.
So when oil prices spiked in February, it was the beginning of the end. Domestic air prices overall rose 24% from January to late April, compared with 3% a year earlier. “For an airline whose entire model relied on operating on high-volume, low-fare routes with razor-thin profit margins, this kind of fuel shock was intolerable,” Su said of the airline, which had not been profitable since 2019.
The future of LCC
Spirit’s demise marks the biggest setback for the ULCC business in recent years. However, the impact has not yet been seen by other airlines in the same space, such as Frontier Airlines and Allegiant. Hsu said some have argued that the impact of Spirit’s closure “may be overstated because Spirit has already shrunk significantly and other airlines have the capacity to absorb former Spirit customers.” He added that the industry could actually become more sustainable because there is less competition now.
Some look to international examples to explain why the sector remains strong. “Low-cost carriers remain well-established and widely used in the global aviation market, especially for short-haul and leisure travel demands,” Eric Napoli, chief legal officer at flight tracking and support app AirHelp, told Afar. Successful examples include Ryanair and EasyJet in Europe.
But Su is less convinced, saying there is little scope for further pressure on low-cost carriers.
“The ability of any airline to find a sustainable path in the (ULCC) segment will depend on its ability to simultaneously manage fuel exposure, labor costs and consumer expectations,” Hsu said. “It’s a business model that has little tolerance for external shocks, and external shocks are now commonplace.”
Meanwhile, other airlines are stepping in to fill Spirit’s void. Some airlines are offering “priority job interviews” to former employees, and American Airlines and Delta Air Lines have launched microsites to help displaced workers. American airlines are also exploring the possibility of taking over the route.
“Route coverage is typically adjusted in stages based on factors such as airport access, aircraft availability and passenger demand,” Napoli said. Southwest Airlines has already announced new flights and increased frequency from its Las Vegas and Orlando hubs, and JetBlue has added 11 routes from Fort Lauderdale to cities including Chicago, Charlotte and Nashville. Breeze Airways is adding four routes from Atlantic City, where Spirit operated 75% of its flights, scheduled to take off later this year, with fares starting at $49 one-way.
As for these bright yellow planes, Spirit actually rents out about two-thirds of its fleet, and owners want their planes back. Only 28 aircraft are available for purchase.
What can Spirit passengers do?
Passengers who had reservations for upcoming Spirit flights that have now been canceled are eligible for a refund, the U.S. Department of Transportation said. These are typically processed through the original point of purchase. Those who purchased directly through Spirit should have their orders automatically canceled by the airline, but most had been processed as of Monday, the airline said.
Those who used third-party sites, including online travel agencies such as Expedia and Priceline, may experience longer wait times as the platform must coordinate refunds first with the airline and then with the passenger, Napoli said. “Processing schedules may vary depending on the booking channel and associated administrative procedures,” he points out.
Spirit customers may also want to check their travel insurance policies, including the coverage provided by their credit card, to see if there is any coverage for “bankruptcy” or “outage of service,” the Department of Transportation reminded travelers.
As for future flights, United Airlines was one of the first airlines to jump on board. Within hours of the news being announced, the Chicago-based airline was offering lower fares to Spirit customers, who needed a confirmation number to access the fares. The airline told Afar that it has helped book more than 68,000 tickets as of today. Additionally, United Airlines is expanding benefits to assist flight attendants and employees who may be unable to return home. Both are valid for two weeks from the start of the shutdown.
American Airlines also began offering rescue fares that do not require proof of reservation and are capped at a certain price on nonstop Spirit flights operated by American Airlines. Tens of thousands of customers are taking advantage of these low prices, a spokesperson said. JetBlue and Southwest Airlines were also offering low fares that were valid for three days only, and Delta Air Lines was also offering low fares that were valid for five days.
While the complications surrounding the closure of a major U.S. airline will take time to fully resolve, one thing is certain: Spirit has provided a simple, no-frills way to travel between destinations at a price that many Americans can afford. In many ways, this is an invaluable service.