NEW YORK, May 2 – 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.
