Spirit Airlines Is Winding Down All Operations
spiritrestructuring.comIt’s strange to see so many commenters celebrating the death of a company and the loss of so many jobs.
I flew Spirit a few times. The first time sucked because it was an emergency and I had no other option. The last few flights were great. We got the large seats up front for $75 extra. That plus parking at SJC was still cheaper than flying Southwest out of OAK.
The staff were friendly, and the gate was conveniently across from a lounge, so we had a truly great experience for those couple flights to Dallas.
It's a class thing.
Enjoying Spirit Airlines a-la-cart benefits is like enjoying the extra features in an Android phone or using a car to get somewhere quickly instead of waiting around for public transit. If you aren't showing the worlds that you can afford to go without, you aren't upper class.
A company that isn't a going concern should be liquidated immediately. Taxpayer money should not be sunk into something that has no future.
It's probably the association with Trump, at least to those outside the US. Anything even remotely connected to that arsehole is, almost by definition, to be reviled. If he wanted to save it, there's probably a really good reason not to, without reading any further into the topic.
What's the association with Trump?
there were talks for the US government to take a large equity stake as part of a bailout, but those fell through
> Winding Down
> To our Guests: all flights have been cancelled, and customer service is no longer available
That seems quite a bit stronger than “winding down”!
Winding down is an industry term that means not only stopping operations, but liquidating assets, resolving contracts, dealing with employees, etc. So that notice is a step in the winding down process, and it would seem like one of the easier, and earlier ones.
Winding down would be a ramp down of some cancelled flights slowly but this is all flights cancelled immediately This is a shut down
Just a few hours ago, Spirit execs were saying everything is just fine. At noon yesterday, Trump was saying that a bailout was still likely. (The first time I read about Trump saying that "we" were going to buy Spirit, I thought he meant him personally, or The Trump Organization. Spirit only needed about $500 million, and Trump could afford that.) That nobody wanted to buy a major airline for $500M means it was a really bad deal and not worth saving. They were already in Chapter 11 bankruptcy, the "debtor in possession" reorganization mode. Not yet clear if they just went to Chapter 7, liquidation, but that's probably happening within days.
Still, a zero-notice shutdown is a bit much. Some people who have tickets for tomorrow probably went to bed already.
There's still the mechanics of winding down. All the planes have to be flown to suitable storage locations. With such an abrupt shutdown, they'll have mis-positioned aircraft all over their route system. Many planes are probably leased, so the lessor may have to arrange to take custody of the aircraft. It's probably better if the aircraft are leased - there's some lessor with funds to take care of the job and the knowledge of how to arrange it, since a handover and move happens at the end of each aircraft lease. Aircraft Spirit actually owns will have to be moved by a bankruptcy receiver, which is a lawyer trying to run what's left of an airline. Most major airports charge very high parking fees. LAX charges $1000 for the first day, and that goes up to $5000 a day on day four. They're not in the storage business.
There are probably a lot of middle of the night phone calls and meetings going on right now.
> Most major airports charge very high parking fees. LAX charges $1000 for the first day, and that goes up to $5000 a day on day four.
That seems pretty cheap to me actually. A random Google search suggests that an airplane costs at least $100MM, so $5k per day is 0.005% of the airplane's value.
Scaled down proportionally to a $100k car, that's only $5 per day, and considering that many parking lots charge $5 per hour, that seems like a pretty good deal.
>The first time I read about Trump saying that "we" were going to buy Spirit, I thought he meant him personally
He views the federal government as his assets to use and not the people's, I don't blame your confusion. This philosophy at the highest seat of office is unprecedented in America.
He also has prior experience with running^H^H^H^H^H^H^Hbankrupting an airline, so I'm surprised he didn't jump on this particular opportunity.
It's "orderly", don't you know!
It was a very quick wind down.
More like a free fall ffs
It's a fall down. Just like their stock prices.
Management chased every quarter with little care about the long term future.
Took their profits and ran to other low cost airlines like frontier to make them ultra low cost per friends in the industry.
Spirit tried to merge a few times but failed due to their balance sheets. Then bankruptcy protections.
Follow the price of oil and airlines run into issues during those times when it goes above $100.
Jet Blue was for the merger, but Elizabeth Warren and Sean Duffy were against it. That's not a balance sheet problem, it's a problem of not pleasing the people in power.
Can someone explain to me (a non American) which niche or segment was Spirit in (and perhaps why they, and not any other airline, are shutting shop)?
Low cost carrier. Think Ryanair. Competition from the rest of the market and bad management put them in a bad position, with the most recent war causing unsustainable fuel issues. Other airlines may be able to double/triple their prices in the short term. Spirit's customers may simply choose to not fly.
https://www.npr.org/2026/05/02/nx-s1-5807933/spirit-airlines... describes this in more detail.
Thank you!
Similar to Ryanair in Europe
Thanks!
This process may seem ugly, but just like biological death is necessary for an ecosystem, this sort of death/restructuring is essential for capitalist economies. Assets and capital get reallocated to better uses. It's all part of the circle of life.
Bankcruptcy and corporate death in general are important. However, the details of how that is managed can vary wildly, and not all implementations are equal.
In this case, the bankcruptcy was handled by cancelling all flights with 1 day of notice. This level of ugliness is not necessary.
“How did you go bankrupt? Two ways. Gradually, then suddenly.” -Hemmingway
Thank God human beings who spend money on these resources are left to fend for themselves. Imagine if we spent good money on a flight, and now the company winds down its operations even as we are on route to our destination. Since we are just a number, I supposed we should simply cease to exist or occupy a liminal space. Or maybe... we could be treated as a human being?
I'm guessing you misinterpreted my comment to assert that we should provide no consumer protections. That was not what I was saying. I'm talking pancakes, you're talking waffles.
How we treat capital and how we treat humans should not be connected to each other, and it's absolutely important that capital not be treated as if it were a person. Corporations are not humans, and we can not bail out investors while we let consumers flail. And we should never bail out corporations under the premise of helping humans, when direct assistance to humans would suffice.
Ideally, they should have stopped selling tickets and then stopped the flights when the sold flights were done. At least within some time frame like 1 month
Unfortunately continuing to burn money with no hope of recovery is not a popular strategy among judges and creditor's lawyers. Customers will either get refunds or join the back of the creditor line.
I doubt many people would buy tickets for a flight with a failing airline. That said, shutting down with effectively zero notice is pretty terrible, and they will probably need to do a bunch of repositioning flights, so they could have kept the lights on for one or two more days.
I agree with this.
I initially meant that they should have finished the flights they already sold tickets for, in some timeframe like one month.
Changed the phrasing so it is more clear.
looks at ai investments
Sure.
Comment is made after May 1st, international strike day.
> biological death is necessary for an ecosystem
Can you expand on this? How do you explain e.g. ecosystems around centuries-old redwoods?
Interesting example since giant sequoias benefit greatly from forest fires...
https://en.wikipedia.org/wiki/Sequoia_sempervirens#Fire_adap...
My guess is that investment capital will move from affordable transport to job replacing ai, surveillance tech, weapons to kill foreigners or gambling platforms. So grateful for free markets
In addition to the human cost that others mention, the big problem is that in our current system, this doesn't lead to fresh blood coming in and being able to compete on an even footing: it leads to the giant incumbents schlorping up the pieces and becoming even bigger and stronger.
Your statement might be true in a system with healthy safeguards ands competition, but that isn't the system we have in the real world today.
That sounds more like religious dogma than thought out argument.
The capital will probably go to further the AI bubble, I really don't see how that would be more useful than enabling travel.
While it's fair to criticize how this screwed up customers (and perhaps workers), airline shutdowns are often good things, route/airport slots gets freed for example, and airlines with better value (cost or quality wise) can take over.
I don't live in the US but spirit has been the butt of jokes for years.
Sure, for those not affected by these capitalist decisions, left stranded in the middle of nowhere, or having to look for a new job, while the owner party at their coffy houses.
Good. They treated their customers terribly and actions have consequences. I was double charged for a flight and they just refused to acknowledge it until I charged back, after which I assume they banned me.
That’s my experience of every single US airline though…
The article does not give context : it is not entirely about the price of fuel, but it seems like fuel was the last nail in the coffin...
Why did Spirit die? Was there any last of this that had to do with their abysmal customer service?
Airlines are not great business. Margins are not great. Fuel is significant part of their operating costs. And if it goes up too much in too short time the whole model breaks. Less margins you have the more you will be impacted. So if you are operating at edge by default fast move in costs will destroy you.
IAG in 2025 had a record operating margin of 15.1%.
Ryanair's gross profit margin for fiscal years ending March 2021 to 2025 averaged 19.1%.
Some are (were?) doing just fine - in Europe at least.
Sure, it's no Big Tech or banking, but it's not like the single low digit percentage of eg retail.
Perhaps some USA airlines need some advice from across the pond?
The business model works fundamentally differently in the US and Europe due to geography. The US is big, meaning that flights are often longer, meaning that fuel is a bigger portion of the operating cost. And fuel is essentially something airlines can’t reduce the cost of compared to other operating costs where it might be possible to optimize for greater efficiency.
> meaning that flights are often longer
Got any sources?
I found:
Europe average flight length (2024): 1,157km [0]
USA average flight length (I could only find old data, 2005): 1,110km [1] (even if we index this up based on upward trends, maybe another 150km, that doesn't seem a huge difference to me?)
> The US is big
And Europe is big too. It's actually a bit bigger than the USA by land size.
Btw, IAG is a global airline group. Only ~32% of IAGs revenue is intra-Europe and domestic. Another data point: Turkish Airlines (very long-haul focused airline) 2025 net income margin was 12.1% in 2025.
I'm not sure your explanation is sufficient. I don't see the exception in the USA? I am certainly willing to accept there are other differences and challenges in the USA, but I don't think it's been presented yet in this discussion.
And remember the original claim was "Airlines are not great business. Margins are not great"
--
EDIT: I found https://www.airportroutes.com/airlines/NKS/ which does highlight that Spirit flew lengths longer compared to Europe's average, at 1,577 km - but then using the same source for Ryanair https://www.airportroutes.com/airlines/RYR/ it's 1,456km, so again, not a huge difference. So comparing 2 seemingly very similar airlines, the European one has both managed to be profitable and not go bankrupt...
--
[0] https://www.eurocontrol.int/publication/eurocontrol-data-sna...
How are you counting average distances? Simply as the distance between two points in the carrier’s network, or are you looking at the lengths of each individual flight?
The source for the point I made is a Wendover video - Why Budget Airlines are Suddenly Failing
You need to look at things like average distance and median distance, do some filtering for most common destinations (example: NYC to LA, San Francisco to Miami, Denver to DC, etc), fuel costs, but also operating costs. Salaries and everything cost much more in the US than they do in Europe.
Cost Per Seat Mile is $0.07 for RyanAir and $0.12 for Spirit, not counting fuel. Spirit hovers around 80% capacity while RyanAir is around 94%.
RyanAir's niche is secondary airports while Spirit was compeating with larger airlines at places like LAX where gate costs are higher.
In 2024 to 2025 there was an engine problem that required Spirit to ground 40% of the fleet to deal with it. Meanwhile they still had to pay for those aircraft with no revenue. This caused a major hit to the financials for a carrier that already runs on thin margins.
I'm sure there's more to it, but these are the larger things I've found.
The immediate cause was rising fuel prices. The other issue sounds like it was poorly ran.
More generally, it is also a low cost carrier at a time when, after years of competing on price, airlines are seeing people willing to pay more for a better experience. All other carriers are expanding their premium options, catering to the affluent part of the K economy (for the first time ever the majority of Delta revenue came from premium cabins over main). Meanwhile, Spirit was dealing on the other side of the K who is also most impacted by increasing inflation, etc... giving Spirit zero ability to raise prices.
> Meanwhile, Spirit was dealing on the other side of the K who is also most impacted by increasing inflation, etc... giving Spirit zero ability to raise prices.
Ryanair (Europe's biggest and most profitable airline) is managing it OK [0]
What's difference about that side of the K in the USA vs Europe?
Seems like the fallout of the unnecessary adventurism in middle east.
>thanks administration that drove them out of business with a pointless war, or at least finished them off.
Too bad. Capitalism working as it should and no last minute government bailouts for failing companies.
The market should decide and determines winners and losers, not the government.
So compete.
I never heard about this company before this morning, so I can't project any second order effect of this closure.
That being said, I suspect many people had never heard about Lehman Brothers before 2008...
Other than ideology, in what way is this a good outcome? For passengers? For workers?
Because companies that are run poorly should go out of business. Otherwise, what incentive is there for management to do a good job?
Why can't management be fired instead? Why punish the above groups for the mistakes of leadership?
Management is also fired in this instance. What you are probably suggesting is that management should have been fired sooner and replaced with competent ones. That is the job of the board, who is the proxy for shareholders. Since the board didn't do its job properly, their shares are also going to zero.
Again, working as intended. There should be no free lunch or bailouts for incompetent work.
The people being punished aren't the board or the management, those will fail upwards to other cushy roles.
The people being punished are the workers and the consumers.
If the board is unable to bring their house in order, the state should fire them, not let their incompetence ruin the lives of the working class.
I agree with GP that this is "capitalism working as it should", e.g. inflicting cruelty on working people while funnelling more wealth upwards. I disagree with the assessment of that being a good thing.
Man wouldn’t it be great if we lived in that world?
can't help but think of the deadweight loss to the US over lack of free market capitalism in terms of bailouts, price supports & subsidies, monopolies, etc. every day we stray further and further from this system we purport to have.
edit: do folks not think more competition would be better for consumers? i'm no stan of capitalism but surely it could be made better, sheesh.
Wow those Halloween shops really flopped huh?
If only they flapped. Maybe they'd still be in the air.
I sense another bailout for the airline industry if the illegal Iran war continues. Spirit is just the first domino to fall.
I am so grateful for this announcement. In a time when gas prices are high, Spirit should be the kind of capitalist example that dominates. Instead, it goes bankrupt despite the President trying to nationalize it. Thanks be to the God of money.