Spirit Airlines’ sudden shutdown has left many travelers scrambling for cheaper alternatives just as the summer season nears its traditional Memorial Day start. In bankruptcy court days after the airline stopped flying, Spirit’s lawyer, Marshall Huebner, apologized to price-conscious passengers who might now struggle to find affordable flights in the carrier’s absence.
“We apologize most specifically for those Americans who may now be priced entirely out,” Huebner said in court, thanking passengers who relied on Spirit during its 34-year run and saying many “could not otherwise have afforded air travel.” The comments underscored how the airline’s demise is landing at a time when air travel already feels more expensive for travelers chasing lower fares.
The timing is also shaped by broader cost pressures, including rising jet fuel expenses tied to the Iran war. The increase in fuel costs helped push up airfares and related fees across the industry, according to the Associated Press report, which described the latest run-up in costs as occurring just weeks ahead of the summer travel rush.
As the cost environment worsened, the report said low-cost, no-frills airlines faced thinner margins while competing under intensifying conditions. Traditional carriers, it noted, can offset fuel costs more easily through premium cabins, membership rewards, corporate travel programs, add-on charges and pricing algorithms, while the most budget-focused airlines historically depended more heavily on offering fares that bigger airlines could not match without losing money.
Shye Gilad, a former airline captain who teaches at Georgetown University, said dynamic pricing has removed “one of the last structural advantages that low-cost carriers had.” He described how “They can’t just be the cheapest airline anymore,” adding that budget carriers now “have to be the smartest low-cost airline,” as large carriers more often sell limited seats at Spirit-level prices while charging more for standard and premium tickets elsewhere.
The Associated Press also pointed to a policy fight over whether the federal government should help budget airlines during the fuel shock. The Association of Value Airlines, a U.S. trade group representing Allegiant Air, Avelo Air, Frontier Airlines, Spirit Airlines and Sun Country Airlines, asked the Trump administration in late April for $2.5 billion in temporary financial aid, arguing the sector needed support as fuel and inflation pressures mounted.
Airlines for America, which represents Alaska Airlines, American, Delta, JetBlue and Southwest, opposed that request. In a statement, it said government help for the budget airlines “would punish other airlines that have engaged in self-help in order to deal with increased costs and reward airlines who haven’t made those tough decisions,” and argued that, over time, sustaining businesses that cannot earn their cost of capital “harms competition and consumers” by making it harder for other airlines to compete.
The report said Transportation Secretary Sean Duffy rejected the request the day Spirit stopped flying. It also tied Spirit’s outcome to a longer trend in the industry, describing consolidation among budget carriers as already under way even before the latest fuel run-up.
Alaska Airlines completed its $1 billion purchase of Hawaiian Airlines in September 2024, the report said, with the two carriers agreeing to maintain service levels on key routes in Hawaii and between Hawaii and the U.S. mainland where they faced less competition. Spirit, meanwhile, had been an unsuccessful merger target of both Frontier and JetBlue as Spirit’s losses mounted after the coronavirus pandemic.
Allegiant said last week it finalized its roughly $1.5 billion acquisition of Sun Country, a deal first announced in January. The combined airline brings together passenger service with Sun Country’s cargo operations and charter business serving sports teams, casinos and the U.S. Department of Defense.
Even as carriers merge, experts said the category remains diverse. Vikrant Vaze, an aviation systems expert at Dartmouth College’s engineering school, said budget airlines are “a pretty peculiar creature,” arguing that “if you want a big umbrella term, they’re very different from each other” and that they have “very different levels of budget-ness.”
Vaze and Gilad highlighted different positioning among rivals: Allegiant’s focus on leisure travel, JetBlue’s hybrid low-cost approach that leans more heavily on premium seating and loyalty perks, and Frontier’s closeness to Spirit’s model as an ultra low-cost carrier. Analysts cited in the report said Frontier entered the current volatility with stronger liquidity and could benefit from Spirit’s exit, noting that it had begun expanding in former Spirit-heavy markets including Las Vegas, Detroit and parts of Florida such as Orlando and Fort Lauderdale.
Gilad pointed to his own experience as a pilot and flight-training instructor for Independence Air, a short-lived low-cost airline that launched in mid-2004 amid the fuel-price surge from fighting in Iraq and later shut down during bankruptcy in January 2006. “They burned through almost $200 million in 18 months,” Gilad said, and he added that the structural pressures remain today, though “there are fewer remaining budget airlines to share them.”