Before dawn on Saturday, May 2, Spirit Airlines — the pioneering budget carrier that reshaped low-cost travel in America — went dark. Its website displayed a single message: “All flights have been cancelled, and customer service is no longer available.” With that, 34 years of operation ended, making Spirit the first major US airline to fail due to financial difficulties in a quarter century.

The collapse came after a last-ditch rescue effort unravelled. The Trump administration had proposed a $500 million government bailout that would have given Washington up to a 90% stake in the airline — a prospect that drew fierce opposition from bondholders, rival airlines and Republican members of Congress. Commerce Secretary Howard Lutnick called CEO Dave Davis personally to confirm there was no deal. “We just kind of ran out of runway,” Davis told CNBC days later.

Spirit had filed for Chapter 11 bankruptcy twice — in November 2024 and again in August 2025 — following years of losses, a failed merger with Frontier Airlines and mounting debt. Analysts and Al Jazeera both pointed to the Iran war-driven surge in jet fuel costs as a decisive final blow, stripping the airline of any remaining path to profitability. Some 17,000 direct and indirect employees lost their jobs overnight, and an estimated 60,000 passengers per day through the rest of May face disruption across Spirit’s 353 routes and 65 airports.

Transportation Secretary Sean Duffy said the federal government is coordinating with airlines to support both stranded passengers and the suddenly unemployed Spirit workforce. The Association of Flight Attendants called on the government to ensure Spirit workers receive back pay, earned vacation and a $600 weekly federal supplement to state unemployment benefits. The Air Line Pilots Association’s president wrote: “The pain of this decision will not be felt in boardrooms. It will be felt by pilots, flight attendants, mechanics and the families that depend on them.”

With the budget travel segment now further consolidated, experts warn that the average American flyer — particularly those on fixed or low incomes — will face structurally higher domestic fares for years to come. The same amount of people want to travel this summer, as one travel analyst put it, with fewer seats available. That is a recipe for price increases.