Sudden spike in fuel prices triggers collapse of Spirit Airlines

Soaring oil prices linked to the Iran war contributed to the weekend collapse of US ultra low-cost carrier Spirit Airlines.

All flights were cancelled on Saturday after efforts to restructure the Florida-based business failed.

Spirit had cut its fleet of Airbus A320 family aircraft from 200 to 125 earlier in the year as part of a major restructuring to become a smaller, more sustainable airline. 

The airline said: “Unfortunately, despite the company’s efforts, the recent material increase in oil prices and other pressures on the business have significantly impacted Spirit’s financial outlook.

“With no additional funding available to the company, Spirit had no choice  but to begin this wind-down.”

Chief executive Dave Davis said: “For more than 30 years, Spirit Airlines has played a pioneering role in making travel more accessible and bringing people together while driving affordability across the industry.

“In March 2026, we reached an agreement with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business.

“However, the sudden and sustained rise in fuel prices in recent weeks ultimately had left us with no alternative but to pursue an orderly wind-down of the company.

“Sustaining the business required hundreds of millions of additional dollars of liquidity that Spirit simply does not have and could not procure.

“This is tremendously disappointing and not the outcome any of use wanted.”

Spirit had sought a $3.8 billion merger with rival JetBlue but the proposal was blocked in 2024.

JetBlue announced 11 new routes from Fort Lauderdale-Hollywood Airport in Florida following the shutdown of Spirit.