(SeaPRwire) –   Budget carrier Spirit Airlines revealed on Saturday that it has formally ceased operations following years of financial struggles, pointing to surging fuel costs linked to the Iran War as the final push over the edge.

The airline stated it had carried out “wide-ranging and thorough attempts to restructure its operations” after filing for bankruptcy twice in 2024 and 2025, but noted that the “abrupt and ongoing increase in fuel prices over recent weeks finally left us with no other option.”

Spirit told passengers that all its flights had been canceled, refunds were in progress, and they should seek to rebook with other airlines.

Spirit Airlines was established in 1983 as Charter One Airlines, a charter tour company. It rebranded to Spirit in 1992, transitioning into a passenger carrier and a trailblazer in budget air travel, providing stripped-down services in return for low base fares. In 2025, it transported approximately 30 million passengers— a significant decline from its peak of more than 44 million in 2023 and 2024, per

President Donald Trump and his administration proposed a possible $500 million federal bailout for the Florida-headquartered airline, but bondholders failed to agree on how to restructure and save the company using those funds.

What led to Spirit’s closure?

Spirit faced financial troubles long before the Iran War began, but the unexpected global energy crisis triggered by Iran’s closure and control of the Strait of Hormuz—through which roughly 20% of the world’s oil passes—speeded up the airline’s collapse.

Dave Davis, Spirit’s President and CEO, identified “the sudden and sustained rise in fuel prices in recent weeks” as the cause of the airline’s shutdown.

“Keeping the business afloat would have needed hundreds of millions more in liquidity that Spirit just doesn’t have and couldn’t obtain,” he stated in the company’s announcement. “This is extremely disheartening and not the result any of us hoped for.”

Per J.P. Morgan analysts referenced by the Wall Street Journal, if fuel prices stayed high, Spirit’s expenses would have increased by $360 million by year’s end.

Spirit’s shutdown comes after years of larger airlines adjusting to compete with its budget-friendly services. Loyalty schemes, co-branded credit cards, corporate alliances, and frequent-flyer benefits at major carriers like Delta and American Airlines drew cost-conscious travelers away from Spirit.

Transportation Secretary Sean Duffy challenged the idea that Spirit’s closure could be blamed on the Iran War during a Saturday news conference.

“Spirit was in deep trouble long before the war with Iran,” Duffy noted. “Their business model wasn’t working; they couldn’t achieve financial stability. So the war wasn’t the driving force behind Spirit’s collapse.”

Instead, Duffy pointed the finger at the Biden administration and former Transportation Secretary Pete Buttigieg for Spirit’s shutdown, citing the Justice Department’s 2023 lawsuit to block a proposed merger between Spirit and larger rival JetBlue. The Biden-era Justice Department argued that the merger would lead to higher fares and fewer options for tens of millions of travelers.

Trump’s efforts to save the airline

Over the past several weeks, Trump has been discussing a potential bailout for Spirit, proposing a $500 million federal package that might have let the government own up to 90% of the airline.

In an April interview with CNBC’s Squawk Box, he said he’d “love for someone to buy Spirit—it’s 14,000 jobs—and maybe the federal government should assist with that.”

However, his interest sparked worries from both Republicans and Democrats, who doubted if taking over Spirit was the most effective use of U.S. taxpayer money.

Senate Republican Ted Cruz stated on X in April: “The government has no clue how to run a failing budget airline.”

In his statement, Davis expressed gratitude to the administration “for their exceptional efforts to try to protect jobs and services nationwide.”

In a Saturday statement, Duffy and the Transportation Department announced that other airlines are limiting ticket prices for Spirit passengers seeking to rebook their flights.

Are other budget airlines at risk?

Since the U.S.-Israeli attack on Iran began on Feb. 28, U.S. jet fuel prices have jumped by almost 70%, per the Argus U.S. Jet Fuel Index.

The crisis has affected nearly every airline and traveler, driving up prices and causing travel instability.

Customers are feeling this increase acutely as airlines adjust by raising baggage fees and ticket prices to offset costs. Travel search engine Kayak reports that the average international fare from U.S. departure points has risen by roughly 37% since the war started.

Smaller airlines globally are being forced to make tougher choices because of their slimmer profit margins. In mid-April, Mexican holiday carrier Magnicharters canceled all its flights for two weeks, leaving some travelers stranded in popular vacation spots like Cancún, Mérida, and Huatulco.

At the same time, Ryanair, Europe’s biggest airline, has said it’s thinking about cutting routes, as have smaller carriers in Europe and Asia such as Vietnam Airlines, AirAsia, and Scandinavian Airlines—all citing escalating jet fuel costs.