The collapse of the first carrier due to a doubling ‌in jet fuel prices during the two-month-old Iran war will cost thousands of jobs. It is a blow to President Donald Trump, who had proposed US$500 million (RM1.9 billion) 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.

All flights cancelled, rivals to benefit

A Spirit board meeting had ended without an agreement to rescue the company, a person close to the discussions told Reuters late yesterday.

“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.

Spirit had 4,119 domestic flights scheduled between May 1 and May 15, offering 809,638 seats, according to data from aviation analytics firm Cirium.

A spokesperson said Spirit had notified the Federal Aviation Administration before halting operations, declining to comment further.

Global carriers are contending with surging jet fuel prices after the US-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz. Spirit was already struggling to ‌turn a profit before the fuel shock.

Spirit built its brand around affordable fares for budget-conscious travellers ready to eschew add-ons like checked bags and seat assignments.

That demand tapered off quickly ⁠after the Covid-19 pandemic, as passengers preferred to opt for comfort and experience-based travel, leaving ultra-low-cost ⁠carriers struggling to adapt.

Spirit’s shutdown will benefit its rivals like JetBlue Airways and Frontier Airlines, who themselves are reeling from the cost ⁠shock. Spirit’s volatile over-the-counter stock plunged 25 per cent yesterday, ⁠while Frontier rose 10 per cent and JetBlue gained 4 per cent.

Trump ⁠said yesterday that the White House had given Spirit and its creditors a final rescue proposal, after talks hit an impasse over a US$500 million financing package that would have helped the airline keep operating through bankruptcy.

“If we can help them, we will, but we have to come first,” Trump told reporters. “If we could do it, we’d do it, but only if it’s ⁠a good deal.”

Fuel-price shock threatens weaker airlines

The collapse shows how the Iran war’s fuel-price shock has exposed weaker airlines.

Spirit’s restructuring plan assumed jet fuel costs of about US$2.24 a gallon in 2026 and US$2.14 in 2027, but prices had climbed to around US$4.51 a gallon by the end of April, leaving the carrier unable to survive without fresh financing.

Transportation Secretary Sean Duffy told Reuters he had tried to get many airlines to buy Spirit but found no takers. “What would someone buy?” Duffy asked. “If no one else wants to buy them, why would we buy them?”

A creditor close to the deal said, “The Trump administration made an extraordinary effort to try and save Spirit, but you can’t breathe life into a corpse. Given that, ⁠the company should make its intentions clear for the sake of its customers and employees.”

Spirit had reached a deal with its lenders that would have helped it emerge from its second bankruptcy by late spring or early summer. But those plans derailed after the war triggered a spike in jet fuel prices, ⁠upending Spirit’s cost projections and complicating its bankruptcy exit.

The airline flew around 1.7 million US domestic passengers in February, with a 3.9 per cent market share, down from 5.1 per cent last year, Cirium data showed.

After Spirit’s ⁠announcement, major US carriers ⁠rolled out rescue-fare options for affected passengers. Frontier announced systemwide discounts and plans to add summer routes, JetBlue offered US$99 fares through Wednesday, Southwest introduced special fares, United capped prices on one-way tickets and American added rescue fares while reviewing options to boost capacity on key routes.

Last month, Trump said his administration was looking to buy the embattled carrier at the “right price.”

Sources said that the administration had proposed US$500 million in financing in ‌exchange for warrants equivalent to 90 per cent of Spirit’s equity.

There had been disagreements inside the Trump administration over whether and how to fund the bailout, the Wall Street Journal reported, citing people familiar with the matter. — Reuters

Credits: Spirit Airlines

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Pilots on some long-haul flights have even begun pointing out an unusual sight to travellers. “Passengers seated to the (right or left) can see the pyramids of Giza,” they announce while flying over Egypt — a detour now common due to restricted airspace amid the Iran conflict.

Since February 28, most westbound flights from India — except those to North America’s west coast — have been forced to avoid Pakistani airspace (for Indian carriers) and Iranian airspace (for all airlines). Aircraft now fly over the Arabian Sea, detour via Oman, Saudi Arabia and Egypt, before heading to Europe, the UK and North America. The return routes remain the same.

The shift has significantly increased flying time. Air India’s Delhi–London non-stop flight now takes over 12 hours, up from around eight earlier. Its Mumbai–New York route, previously a 13–14 hour non-stop, now operates as a one-stop service via Rome, stretching total travel time to nearly 21 hours.

Fewer flights, higher costs

Indian carriers have sharply reduced their West Asia operations. Daily flights between India and the West have dropped significantly due to airport closures in key transit hubs like Doha and Bahrain, while operations in the UAE remain intermittent.

IndiGo’s international network has shrunk drastically, with only a handful of westbound flights operational. Air India Express has cut its West Asia connections from about 110 daily flights to around 50 ad hoc services, while Air India’s weekly services in the region have dropped from over 250 to about 30–40. Other airlines like Akasa Air and SpiceJet have also scaled back Gulf operations.

Operating costs have surged alongside the disruptions. Aviation turbine fuel (ATF) prices have risen to about $817 per kilolitre in Delhi and Mumbai, while the rupee’s depreciation against the dollar has further increased expenses such as leasing and maintenance.

Longer routes are compounding the burden. Wide-body aircraft burn significantly more fuel over extended durations, with airlines estimating an additional cost of roughly ₹80,000 per hour per flight. To mitigate risks, airlines are also carrying extra fuel, increasing aircraft weight and further raising fuel consumption.

Despite mounting losses, airlines continue operating flights to maintain connectivity. “Flying aircraft has always meant defying nature… now they are defying economics too too,” a senior airline official told TOI.

Carriers including Air India, IndiGo and Akasa have imposed fuel surcharges ranging from ₹199 to $200, while insurance premiums for flights to West Asia have risen sharply.

Crew fatigue concerns

Extended flying hours have also raised concerns over crew fatigue. Air India has received regulatory approval to extend pilot duty hours to 11.5 hours without requiring additional crew.

Pilots, especially those operating Boeing 787 aircraft, have flagged physical strain due to long hours and limited cockpit comfort. “We are pushing our body to the limit of human endurance,” a pilot said, citing continuous alertness required while flying near conflict zozones with GPS disruptions.

Passengers hit by high fares, limited options

Travellers are bearing the brunt of reduced capacity and higher costs. Airfares have surged sharply, with some passengers paying as much as ₹1.8 lakh for one-way tickets on long-haul routes.

With major Gulf carriers such as Emirates, Qatar Airways and Etihad largely out of operation on these routes, passengers are left with limited alternatives. The resulting supply crunch is expected to ..

Ripple effects beyond aviation

The conflict is also impacting multiple sectors in India, TOI reported. Rising input and freight costs are affecting medical device production, while propane shortages have disrupted pharmaceutical manufacturing. Fertiliser output ahead of the kharif season is under pressure due to LNG supply issues.

Industries such as restaurants, air-conditioner manufacturing and automobiles are also facing higher costs and supply disruptions linked to fuel a ..

Credits: Iran War

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