For some, its bright-yellow planes served as a constant joke, representing bargain-basement lackluster service. For others, it meant a lifeline, providing the low fares necessary to allow them to travel by air. Today, Spirit Airlines only has one simple message on its site: “Spirit guests should not go to the airport.”
After years of treading water—including filing for bankruptcy in November 2024—the Florida-based carrier abruptly ceased operations on May 2, when its parent company, Spirit Aviation Holdings Inc., “regretfully announced that the company has started an orderly winddown of operations, effective immediately.”
With that, Spirit pulled the plug and all flights were canceled, leaving passengers and crew stranded—and marking the end of the company that pioneered the ultra-low-cost carrier (ULCC) model of airline pricing by unbundling all-in fares to allow for lower-base ticket costs.
It’s a business model with almost no tolerance for external shocks, and external shocks are the norm now.
“Spirit’s collapse is less a sudden shock than the final chapter of a structural story that has been unfolding for years,” Jungho Suh, a management professor at George Washington University School of Business who studies the travel industry, tells Afar. “The Iran war-driven oil price spike was the triggering event, but it landed on a company that had already exhausted every available option.”
While late-night shows mocked the airline’s closure, there was a very real impact among its loyal fliers, with the loss of nearly 300 flights and an estimated 60,000 passengers daily. The sentiment was so strong that social media star Hunter Peterson started LetsBuySpiritAir.com, and more than 370,000 people have already pledged $337 million to relaunch Spirit 2.0.
For its employees, it’s a whole different matter. Spirit’s 17,000 former staffers are now all out of a job.
“We have been through a relentlessly stressful two years through a failed merger, multiple furloughs, two bankruptcies, and concessionary bargaining,” Captain Ryan Muller, chairman of the Spirit Airlines Master Executive Council, a chapter of the Air Line Pilots Association (ALPA), said in a statement provided to Afar. “We held up our end and did everything we possibly could . . . this is devastating news for Spirit pilots and all Spirit employees.”
What went wrong
Spirit was headquartered in Dania Beach, Florida, and predominantly flew domestic routes on its all-Airbus fleet 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 firmly established a reputation for offering passengers the cheapest fares possible, based on à la carte service. Airline amenities—like seat selection, carry-on bags, beverages, and snacks—which had been traditionally bundled together as part of airlines’ fares, required additional fees. But it allowed passengers to customize their airfares based on their needs.
As the business model took off, the legacy carriers in the U.S. were so threatened that they introduced basic economy fares in the 2010s, stripping away aspects of their previously included services, like snacks and seat selection, with lower fares. “Once the big carriers could match Spirit’s price point on the routes that mattered, Spirit’s core value proposition eroded,” Suh says.
However, over time, passengers became less interested in that approach, often viewing the add-ons as a way of nickel-and-diming. Spirit reduced its network throughout 2024 and 2025, and an April 2026 analysis referenced by Suh showed that fares rose roughly 14 percent on the routes Spirit exited. Some climbed more than $100 round-trip compared to when Spirit was operating on them, putting a strain on loyal riders who were used to the lower fares.
We have been through a relentlessly stressful two years.
So when the oil prices spiked in February, it was the beginning of the end. Across the board, domestic air prices rose 24 percent between January and late April, compared to 3 percent the prior year. “For a carrier whose entire model depended on operating at razor-thin margins on high-volume, low-fare routes, that kind of fuel shock was unsurvivable,” Suh said of the airline that hadn’t turned a profit since 2019.
The future of low-cost carriers
Spirit’s demise marks the biggest recent setback to the ULCC business. But its implications are yet to be seen for other carriers such as Frontier Airlines and Allegiant that are in the same space. Suh said some argue the impact of Spirit’s closure “could be overstated since Spirit had already shrunk significantly and other airlines have spare capacity to absorb former Spirit customers.” He adds that with less competition now, there’s a chance the industry could actually become more sustainable.
Others look to international examples to illustrate that the segment remains strong.“Low-cost airlines continue to be an established and widely used part of the global aviation market, particularly for short-haul and leisure travel demand,” Eric Napoli, chief legal officer at flight-tracking and support app AirHelp tells Afar. Among the successes are Ryanair and EasyJet in Europe.
But Suh isn’t so sure, noting that budget carriers have very little room for added pressures.
“Whether any carrier can find a sustainable path in [the ULCC] segment will depend on their ability to manage fuel exposure, labor costs, and consumer expectations simultaneously,” Suh says. “It’s a business model with almost no tolerance for external shocks, and external shocks are the norm now.”
Low-cost airlines continue to be an established and widely used part of the global aviation market.
In the meantime, other airlines are stepping in to fill Spirit’s void. Several airlines are offering “preferential employment interviews” to former employees, while American and Delta have created microsites to assist those displaced. U.S. carriers have also been scouting out the possibility of taking over its routes.
“Route coverage is typically adjusted gradually, based on factors such as airport access, fleet availability, and passenger demand,” Napoli says. Southwest has already announced more new flights and more frequency from both its Las Vegas and Orlando hubs, while JetBlue added 11 routes from Fort Lauderdale to Chicago, Charlotte, Nashville, and othr cities. Breeze Airways added four routes from Atlantic City—where Spirit had operated 75 percent of the flights—which will take off later this year, with rates starting at $49 one way.
As for those bright-yellow planes, Spirit actually rented about two-thirds of its fleet, and those owners want the planes returned. Only 28 aircraft may be available for purchase.
What can Spirit passengers do?
Passengers who were booked on future Spirit flights that are now canceled are eligible to receive a refund, according to the U.S. Transportation Department. These are typically processed through the original point of purchase. Those who bought directly through Spirit should get theirs automatically reversed by the carrier—and most had been processed as of Monday, the airline said.
Those who used third-party sites, including online travel agencies like Expedia and Priceline, may experience a longer wait since the platforms have to first coordinate the refund with the airline and then with the passenger, Napoli says. “Processing timelines can vary depending on the booking channel and the administrative steps involved,” he notes.
Spirit customers may also want to check their travel insurance rules, including protections their credit cards may offer, to see if there’s anything that covers “insolvency” or “service cessation,” the DOT reminded travelers.
As for future flights, United was one of the first to step in. Within hours of the news breaking, the Chicago-based carrier was offering lower-priced fares to Spirit customers, requiring confirmation numbers to access those rates. The carrier tells Afar they’ve helped book more than 68,000 tickets as of today. Additionally, United is extending benefits to help crew members and employees who might have been stranded to get home. Both are valid for two weeks from the start of the shutdown.
American Airlines also started to offer rescue fares, which are capped at certain prices on Spirit nonstop routes that American also flies, without requiring proof of booking. A spokesperson says that tens of thousands of customers have taken advantage of these lower prices. JetBlue and Southwest had also offered lower fares that were only valid for three days, and Delta did as well, for five days.
While the complications of shutting down a major U.S. carrier will take time to fully play out, one thing’s for sure: Spirit provided a simple and no-frills way to get between destinations with a price tag that many Americans could afford. In many ways, that’s a service that’s priceless.
