The sudden shutdown of Spirit Airlines will likely have implications that go well beyond the vanishing of its signature canary-yellow planes from the nation’s airports.
Spirit is also seeking additional financing to support its shutdown and liquidation, according to a filing in its federal bankruptcy case. It was reported that the airline needs debtor-in-possession funding to manage an orderly wind-down and repay creditors, while retaining a small team of roughly 150 employees to handle closure operations, asset liquidation and related administrative duties, along with required pay and benefits.
The wind-down follows a period of severe financial strain driven by rising fuel costs, competitive pressure and repeated restructuring attempts that ultimately failed to stabilize the low-cost carrier.
More broadly, however, Spirit’s departure is expected to decrease competition in some markets and add to the trend of rising airfares already underway due to the Iran war.
Spirit Shutdown Leaves Travelers Stranded
The loss of a low-cost option also could leave many lower-income travelers no way to fly affordably, industry experts say.
“The bad news for consumers is that it takes another low-cost carrier, potentially, out of certain markets. That’s always bad news because even if you were never to fly Spirit, you benefited if they were flying to your market,” said Clint Henderson, travel expert at The Points Guy, in an interview with The Hill.
Henderson added that while Spirit’s contraction over the years means the impact of its loss might not be that widespread, it will be felt in those markets where it did operate. He noted, for example, that when Spirit pulled out of Minneapolis last year, rival Delta Air Lines almost immediately raised its fares.
“Any time you have a reduction in capacity and demand increases, airfares have nowhere to go but up. And that doesn’t count the fares that are already rising because of the spike in fuel prices,” added CBS News travel editor Peter Greenberg in an interview.
A CBS News analysis of data from aviation analytics firm Cirium found that average airfares rose 23 percent when Spirit stopped serving a route.
Passenger volume also fell 20 percent when the airline left a market, suggesting that without a low-cost option, many people simply stopped flying.
Spirit’s closure will also affect customers beyond those who were left stranded by the airline’s sudden shutdown. The airline has announced that, as part of its bankruptcy and liquidation, customers with Spirit flight credits, vouchers or miles will not be eligible for refunds.
