Several major U.S. airlines are preparing for Spirit Airlines to cease operations as soon as this weekend, The Air Current reported Friday afternoon, as the beleaguered low-cost carrier faces a potential money crunch to keep planes in the air.
Spirit has denied that it's on the brink of shutting down, with a spokeswoman saying: “There is no truth to any rumors that we are preparing to cease operations. It is business as usual at Spirit and flights continue to operate normally.”
But citing unnamed executives from several other U.S. airlines and financial filings in a paywalled version of its story, The Air Current reported that at least two major U.S. carriers are planning out additional flight schedules to serve the passengers that would be stranded if Spirit goes under. That's because the airline, in the midst of its second bankruptcy proceeding in just over a year, needs to draw down $100 million in financing to continue its operations.
The Air Current is written and edited by some of the most knowledgable aviation journalists who know the industry front to back. So while Spirit has vehemently denied the story, this is not just baseless rumor or gossip.
A sudden failure would likely leave thousands of Spirit customers stranded heading into the hectic holiday travel season. The U.S. airlines preparing for that prospect are reportedly discussing how to step in with additional flights to keep passengers moving.
Spirit has been scrambling to right-size its financials while implementing a turnaround plan that includes first class seating, more inclusive fares, and fewer fees – a huge departure for an airline that’s practically notorious for nickel-and-diming travelers. An abrupt closure would be a sad conclusion for an airline with a storied (though often unpopular) past: a pioneering budget airline that was simultaneously the butt of late night comedians' punch lines yet almost single-handedly responsible for the cheap fares that virtually all U.S. travelers love.
Whether it happens this weekend, next year, or not at all, its failure would have major ramifications for American travelers. Regardless of if you’re a diehard Spirit fan or you've sworn you'll never set foot on one of its bright yellow jets, you’ve benefitted from its cheap fares.
Read more: Why You Can’t Afford to Root for Spirit & Frontier To Die
Alongside others like Frontier and smaller upstarts, Spirit brought the ultra-low cost airline model to the U.S., with dirt-cheap base fares supplemented by fees for everything from bags to seat selection to water onboard – to the U.S. And it was a roaring success for more than a decade leading into the pandemic, forcing even major airlines like American, Delta, and United to slash prices in order to compete for passengers.
But in the wake of the pandemic, the hits just kept coming for Spirit and other budget carriers like it.
Ultra-low-cost carriers need ultra-low costs, and that’s much harder to pull off with higher fuel prices and especially richer pilot contracts coming out of the pandemic. Bigger, full-service airlines have figured out how to use their own, stingier basic economy fares to poach passengers that previously flew Spirit. While those major carriers have turned their frequent flyer programs and credit card relationships into an economic engine that dwarfs the revenue they make from selling tickets, smaller budget airlines don’t have that same luxury.
And perhaps most importantly: Americans increasingly want to fly abroad … in an extra legroom or even business class seat. That’s just not in Spirit’s DNA, so it missed out completelyThank on the boom in all things premium travel.
Spirit first filed for bankruptcy late last year, only to emerge from those reorganization proceedings and refile for a second attempt this fall. While the airline has reworked its entire business model with first class seating and new fare bundles, Spirit has also drastically slashed and reworked employee contracts in a desperate bid to stop the bleeding.
All the while, it's been the subject of countless merger attempts and rumors, including takeover attempts from both Frontier and JetBlue. JetBlue's bid was blocked by former President Joe Biden‘s Department of Justice last year.
While it fell out of favor in the post-pandemic travel boom, Spirit's low-fare, high-fee model put the major U.S. carriers on their heels, forcing them to lower fares to compete on price or lose customers. Without Spirit's competitive prices, flights on all those major airlines just get more expensive.
This is a developing news story – check back for updates.
