U.S. Spirit Airlines ceases operation amid war-driven fuel price surge

This photo taken on May 3, 2026 shows the terminal building of Spirit Airlines at LaGuardia Airport in New York, the United States. Bankrupt U.S. discount carrier Spirit Airlines ceased operations on Saturday after failing to secure creditor backing for a proposed federal bailout, marking the first airline collapse linked to the U.S.-Israeli war in Iran. The airline announced on its website that it had canceled all flights and that customer service operations are no longer available. (Xinhua/Zhang Fengguo)

NEW YORK, May 2 (Xinhua) — Bankrupt U.S. discount carrier Spirit Airlines ceased operations on Saturday after failing to secure creditor backing for a proposed federal bailout, marking the first airline collapse linked to the U.S.-Israeli war in Iran.

The airline announced on its website that it had canceled all flights and that customer service operations are no longer available.

The shutdown follows a sharp surge in jet fuel prices, which have roughly doubled during the two-month conflict, intensifying financial pressure on already struggling carriers.

With 34 years of operations, Spirit was the ninth-largest U.S. airline by passenger traffic as of December 2025. It had been on track to exit its second bankruptcy in two years before the fuel-price shock triggered by the Iran war ultimately led to its collapse.

The carrier in March “reached an agreement with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business,” Spirit’s President and CEO Dave Davis said in a press release. “However, the sudden and sustained rise in fuel prices in recent weeks ultimately has left us with no alternative but to pursue an orderly wind-down of the company.”

The Trump administration had proposed a bailout for Spirit but failed to secure a deal with its major creditors.

U.S. Transportation Secretary Sean Duffy said Saturday that travelers booked on Spirit flights would have access to limited-time discounted fares on other airlines. He also advised passengers to check with their credit card providers or travel insurers regarding refunds. ■

This photo taken on May 3, 2026 shows a plane of Spirit Airlines at LaGuardia Airport in New York, the United States.

Bankrupt U.S. discount carrier Spirit Airlines ceased operations on Saturday after failing to secure creditor backing for a proposed federal bailout, marking the first airline collapse linked to the U.S.-Israeli war in Iran.