Jet fuel prices have doubled during the conflict, and a Trump-backed US$500 million bailout did not materialise
Bankrupt discount carrier Spirit Airlines ceased operations on Saturday, the industry’s first casualty linked to the Iran war, after failing to secure creditor support for a US government bailout plan.
The collapse of the carrier following a doubling in jet fuel prices during the two-month-old Iran war will cost thousands of jobs. It is a blow to US President Donald Trump, who had proposed US$500 million to save Spirit despite opposition from some of his closest advisers and many Republicans in Congress.
No US carrier of Spirit’s size – it accounted for 5 per cent of US flights at one point – has liquidated in two decades. Spirit helped keep fares lower in markets where it competed against major carriers.
A Spirit board meeting had ended without an agreement to rescue the company, a person close to the discussions said late on Friday.
“Unfortunately, despite the company’s efforts, the recent material increase in oil prices and other pressures on the business have significantly impacted Spirit’s financial outlook,” Spirit said in a statement announcing “an orderly wind-down of operations”.
All flights have been cancelled, the statement said, asking passengers not to go to the airport.
Source: News - South China Morning Post
