Spirit Airlines Crashes

Over the weekend, thousands of would-be Spirit Airlines travelers were informed that their upcoming flights would be cancelled. Unfortunately, there would be no rebooking because the entire airline was ceasing operations, effective immediately. The yellow-tailed pioneer of America’s ultra-low-cost-carrier model sent home roughly 17,000 employees and contractors as it became the first significant U.S. airline shutdown since Midway folded in the days after September 11th, 2001.

The primary cause of death is the doubling of jet fuel prices amid the War in Iran, which blew up an exit financing package that Spirit’s lawyers had told a NY bankruptcy court was nearly final. A last-ditch $500 million rescue package floated by the Trump administration failed to win over bondholders by Friday evening. By Saturday morning, the app simply read: “all Spirit Airlines flights have been canceled, effective immediately.”

So while the jet fuel price spike was the final straw, the demise of Spirit can be traced back to a federal courtroom in Boston in January 2024, where the Department of Justice and U.S. District Judge William Young blocked JetBlue’s $3.8 billion acquisition of Spirit on antitrust grounds. The DOJ argued, and the court agreed, that removing Spirit as an independent carrier would raise fares and eliminate “about half of all ultra-low-cost airline seats in the industry.” Well, guess what happened anyway?

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