In a move that will effect travelers throughout the US, Caribbean, and Central America, Spirit shut down and everyone (else) was wrong about it.
Crack those knuckles, keyboard warriors, I’m ready.
Spirit Was Essential
Spirit was so essential to protecting competition and keeping pricing in check that the JetBlue-Spirit merger absolutely could not be approved. That was the argument. The DOJ sued to block the deal in March 2023. Then-Transportation Secretary Pete Buttigieg backed the lawsuit publicly, breaking with decades of DOT practice. Senator Elizabeth Warren was the loudest voice in Congress, sending a June 2023 letter to Buttigieg with Representative Ocasio-Cortez and seven other House Democrats urging him to stop it. After a federal judge killed the deal in January 2024, Warren posted on X that this was “a Biden win for flyers.” Social media is busy reminding everyone of those quotes today, and rightly so.
Another blogger had suggested that my position on this bailout was in some way tied to “MAGA.” This is particularly interesting because taxpayer-funded bailouts are generally not a conservative value and his “MAGA-most”, President Trump, came out against the bailout. Recounting the positions of those who made statements at the time of the Jet Blue-Spirit court fiasco is simply a reflection of the events as they took place.
Although Transportation Secretary Sean Duffy is at least trying to clean up the mess for stranded passengers, working on a deal six months ago might have led to a longer fuse and more options. It would have made even more sense to do this two years ago, when there was an actual airline to save.
The Spirit effect was real. It kept pricing within the lowest tier of the market, and it pulled the middle tier down with it. On routes like Pittsburgh to South Florida, American Airlines can charge close to $500 round trip nonstop into Miami whenever it wants to. JetBlue might run $250 into Fort Lauderdale on a good day. Spirit was $100. Granted, $100 was probably not tenable, and the two bankruptcy filings suggest it wasn’t. But Spirit set the floor. JetBlue priced against it. American had to acknowledge it existed.
That floor is gone. JetBlue is not going to keep Fort Lauderdale fares at $250 round trip when the only other competitor charges $500. JetBlue’s president Marty St. George told analysts last week that the airline is “happy with unit revenue” in South Florida even after adding capacity, which is corporate-speak for “we have room to charge more and we plan to.” Pricing on these routes will not stay at $275. It will creep upward, and the people who never set foot on a Spirit plane will pay for it anyway.
Saving Spirit Was Cheap, Letting It Fail = Expensive
The Trump administration offered Spirit a $500 million loan, structured so the government would take a 90% equity stake and sit at the front of the line ahead of existing bondholders in any repayment. That last part is precisely why bondholders, including Ken Griffin’s Citadel and Ares Management, killed the deal. They were not going to agree to subordinate their claims to the federal government on a company already twice-bankrupt. So the airline died.
But whether or not the debtors were agreeable to terms posed by the government, much hand wringing was done throughout the media including by my dear friend, Matthew. Was $500 million good money after bad? Maybe. But consider the alternative framing. The US population is roughly 335 million people. Split that bailout evenly across every American, and it costs about $1.49 per person. US airlines carry close to a billion passengers a year, and Spirit served approximately 70 markets across the country. Even if you narrow it to the passengers who ever booked a Spirit flight, or who flew a competing carrier on a route Spirit also served, and you ask how much they are likely to pay more per ticket over the next 18 months without a floor-setter in the market, the math inverts quickly. A $30 average fare increase across even a fraction of those passengers adds up to multiples of the bailout cost, and unlike the loan, that money goes straight to American, Delta, and United rather than coming back to the government with interest.
To be clear, Spirit had structural problems that $500 million was not guaranteed to fix. Georgetown professor Shye Gilad put it bluntly after the shutdown: when you are a low-cost carrier, your entire model depends on a cost advantage, and Spirit no longer had one. Even if the bailout bought another six months, Spirit would have needed a full restructuring, a leaner fleet, and a fuel environment it could actually budget around. None of that was guaranteed. But six months of Spirit in the market is six more months of pricing discipline on every route it flew. The question was never whether $500 million would save Spirit forever. The question was whether $500 million was worth buying time to find a better outcome than 14,000 jobs gone overnight and a pricing vacuum that legacy carriers are already happy to fill.
The Very Brash Vultures
The condolences came fast. Within hours of Spirit going dark, every major carrier had announced rescue fares for stranded passengers. Noble of them. JetBlue’s offer ran through May 8 at $99 each way, which sounds generous until you realize that not everyone booked on Spirit had plans in the next seven days. Anyone with a Spirit ticket for later in May, or beyond, went straight back to market rates with no safety net. American announced help fares too, though searches conducted after the announcement did not surface anything that looked like meaningful relief. The gestures were real. The coverage was not.
JetBlue, to no one’s surprise, wasted no time announcing 11 new routes into Fort Lauderdale. Others will follow. The capacity will return to Spirit’s markets eventually, just at prices Spirit never would have allowed. The more interesting question is how long before someone publishes a material study showing exactly how much more Americans are paying for airfare now that the floor is gone. That data will come. It always does. The number is going to be uncomfortable for everyone who called this a win.
Conclusion
We can’t go back in time and marry Jet Blue and Spirit. And maybe that’s not even the right thing to do, in time we’ll know for sure. But much like the Wall Street Journal, which came out so sternly against any bailout action, changed course (oops) on the day the airline ceased operations published an article about how that may have been a mistake with consequences for travelers. How many will see the loss of Spirit greater than the cost of saving it?
I imagine Matthew’s TDS is boggling his mind these days. How to spin this situation so as not to disturb the soothing psychological benefits of TDS so many intellectual misfits enjoy. Pocahontas is no doubt cracking a champagne bottle or two.
Insane take. Whether you agree or disagree with her take on the merger, it’s clear that Liz Warren did not want Spirit to fail. Also everyone seems to forget that their purpose merger was for Spirit to integrate into JetBlue. Meaning Spirit would have died anyway as Jetblue would still have raised prices on its routes eventually.
I did not agree with blocking that merger, but it would not have saved Spirit. And it is absolutely true that the Iran war was the final straw for the airline, So yes, Trump also bears responsibility for this.
You can’t run foreign policy on a failing airline. Get real
Thank you, Sal, for the well-reasoned rebuttal to Willy’s bad take.
What a wild hot take. Spirit didn’t fail because they didn’t merge with Jetblue, Spirit failed because of high gas prices and the inherent unprofitability of low cost carriers. If spirit merged with Jetblue, both airlines would’ve gone under together, and it remains to seen when not IF jetblue gets absorbed.
The patient was in hospice prior to the war
Whether you like NK or not, it deserves to have books written about its 34-year history.
For aviation enthusiasts → The NK jet featured in the article photo is a 3.6-year-old A320neo. It was withdrawn from use on December 8, 2025 and storied at GYR on December 11, 2025.
Frankly, saving NK was not easy and ultimately failed. The airline faced deep financial issues, including losses since 2019, two bankruptcies within a year, and heavy debt, making a bailout too complicated to finalize. As one may recall, NK was losing millions daily, struggling to stay afloat with very little liquidity left before a potential third bankruptcy filing. Although a grassroots movement named “Let’s Buy Spirit” raised more than $22 million in pledges, it was insufficient to save the company, marking the end of the veteran budget carrier.
One might easily imagine airfares will go up. Sprint was losing money, so one can essentially assume the $20 or so they lost per pax in recent years was a subsidy to the pax in terms of lower fares. We’re seeing other players move to replace them in certain city pairs. That will continue. And, yes those city pairs will likely see higher fares. But, one can’t expect the new player to charge as low as Spirit, as Spirit was under-pricing for their costs. Some city pairs will disappear, but do those routes really deserve a n/s if it can’t be done in a way that covers costs? I’m simply not concerned about major price increases, certainly not in my flights. Of course, it will appear that prices will go up dramatically as this shutdown occurred during rising jet fuel prices.
Saving Spirit would have been utterly crazy and not allowed natural market adjustment on schedules and price.
Let’s be clear, this was not about a failed merger or a recent fuel spike – the latter which only marginally sped-up their demise; they have not made money since pre-covid times.
The model is bust – amplified by higher input costs including fuel. They also ‘nurtured’ an awful reputation which, in a service business, deserves failure.
Imagine $500M. It woujd have lasted how long? How much market/cohort damage would those extra weeks have caused to only arrive at the same point.
Yes fares will go up, indeed they must, or…you go out of business.
If you cannot make a profit the prices you charge for consumer is an economic loss to society. This is not a loss to anyone
As Americans we should be ashamed with all the financial knowledge available that spirit was left to its poor management for failure. The business model was lost. It needed restructuring and private equity. I guess we’ve lost determined innovative minds that recognize you don’t throw out the baby with the bathwater.
Its called business. Government has no business in business. It can’t even run itself correctly. Solyndra ring a bell?
Steve,.notice I didn’t call out for a government bailout. I fail to understand how they went through 2 bankruptcies without an approved plan to change the business model at that time to restructure. Perhaps there was poor legal advice?
The round trip distance PIT-FLL is approximately 2,000 miles. If Jet Blue wants $250 for that trip and it’s seen as much too costly by some, maybe- just maybe- they shouldn’t be considering any trip beyond their own front door.
In for a penny, in for a pound. Usually that’s a metaphor to finish what you started, but in this case, if the government was going to invest $500 million, it would not have nearly stopped there.
Meanwhile, if the government really wanted to save Spirit, it wouldn’t have proposed a $500 million investment with terms that creditors would never have accepted. It would have, instead, simply bought the claims of Citadel, Ares, etc. at the value they were expecting to receive from the liquidation of Spirit’s assets.
Instead, the government proposed something it knew was doomed to fail. Why would senior creditors take less? The kindness of their hearts? They ultimately have duties to the investors that put money into the funds that hold the claims against Spirit. Whether it was well intentioned by the government or just a talking point so that the administration can say “it tried” and look to blame creditors, the prior administration, etc., who knows.
As for competition, of course it’s a good thing, but to what end? Should we just give the LCCs the $2.5 billion they’d love to have for their balance sheets? Would doing so really ensure competition?
Unfortunately, Spirit’s collapse is likely the first of a few more dominos to fall. High oil prices are here to stay for 2026. Airlines that do not have a credible credit card loyalty program to buttress that will not be doing well the next 12 months.
Credit cards with wings. Big 3 would make more money if they didn’t fly. Which is why we need better worker and consumer protections; otherwise, that’s what we’ll start to see (less operational reliability).
on behalf of 15,000 Spirit ex-employees, a now to be fleeced further American flying public, and those still stranded I would like to thank the feckless Biden administration, Lina Kahn, Mayor Pete, Dem Senator Liz Warren and certainly Federal Judge (?) Young for their efforts in tanking the merger with Jet Blue in the name of “preserving competition”
those interested should study the judge’s decision, Warren’s rhetoric, and for sure, follow Lina Khan’s actions in NYC on behalf of Comrade Mayor Mamdani
One can only hope and pray that NYC does not go the way of Sprit
RIP
Hey mikey! Pay for the reparations to the UAE and that 1 billion retrofit to the ” free ” Qatari plane and get back to me. His brush off of America first is exactly like the foolishness the unhinged believe.
So not even going to mention the war that ultimately killed the company. It’s not that I support the effort to block that merger, I don’t. But the idea that it was the only factor is just crazy and partisan.
It’s bizarre that this blog posts contradictory views albeit with different authors. And the arguments for spirit here are stupid. Too many issues to go into but the most obvious is that spending $500M to buy 6 months would’ve been foolish – they could’ve just paid that directly to the 14K flight attendants to cover nearly 8 months of their salary overall.
Spirit went under because it wasn’t charging what it cost to operate the business. Pure and simple. ULCCs rely on the surcharges to make the math pan out, and the kind of folks who fly Spirit and Frontier don’t pay those surcharges because they’re ok with uncomfortable planes with no overhead bags. Most travelers say no thanks to cattle car planes.
How could the government have propped up NK but not F9 or B6? Subsidizing a business model that was failing would only hurt other carriers that are also losing money.
Protectionist economic policies are harmful in the long term, that’s why almost anyone with a tiny iota of knowledge about economics advises against them. Sometimes businesses fail. That’s the reality of capitalism.
I used to love Hot ‘n Now in the 90’s (Look it up) for their .39 burgers, fries and sodas. But alas the business model didn’t work and they went out of business. That is how the business world works, each company is responsible for their own profitability, not the government.
And yet people still find a way to eat fast food burgers and more, even at higher prices. And people will still find ways to fly when they want to. Hell the world even survived the loss of PanAm, something no one would have imagined 50 years ago.
Spirit failed because it was so badly managed and chronically edging at the point of implosion. A temporary crisis that other airlines are managing to weather caused it’s demise. That is unfortunate for everyone who’s lost their job, but the business had been running on empty for quite some time, so this is hardly a surprise.
“ The question was whether $500 million was worth buying time to find a better outcome than 14,000 jobs gone overnight and a pricing vacuum that legacy carriers are already happy to fill.”
Spirt’s former CEO testified during the merger trial that they had been trying to sell the airline since 2016. They have had dozens of opportunities to provide the “better outcome” including at least one offer from Frontier Airlines after the JetBlue merger failed, during their first bankruptcy. If they couldn’t figure out how to sell the airline when it was an attractive target there is no way they were going to sell it as a failing firm kept alive by government handouts.
Let’s add that in February 2022, F9 announced its intention to acquire NK, pending regulatory approval, with F9 stock as the surviving entity. The deal would have made the combined carrier the fifth-largest airline in the U.S. In July 2022, NK’s shareholders rejected F9’s offer. The rest is history.
An excellent point, Henry. When the Australian carrier Ansett Airlines failed in 2001, it was offered to Qantas for the princely sum of one Australian dollar. A Qantas team took a look at the books and declined the offer. A consortium of billionaire businesspeople also took a look, but the sea of red ink was so deep and murky that they backed-out too. Likewise, if there had been even the whiff of a fighting chance for Spirit a saviour would have emerged, but the reality is that the company was a financial basket-case, and putting it out of its misery was the kindest thing to do in the long run.
Oh please, all of a sudden everyone is crying crocodile tears over the airline everyone hated.
I am sure everyone enjoys paying more for your airline choice. The racist’s view of thinking Spirit is something you now can avoid are as ridiculous as who you are. No crocodile tears, just reality.
We saw it build over you comments. WOW! Racist? Anyone who disagrees with you is a racist? Stay in Mom’s basement
They were offered a deal, turned it down. My guess is the assets are some office supplies and gate space. Airlines like this lease anything of substantial value so the debt holders will not break even on legal cost. Other airlines will pick up the Spirit routes and hire a good portion of the employees and leased planes. Trumps deal would have kept them in motion till qualified management found a way to regain profit status.
A jetblue/spirit merger would have been hell. I like Jetblue’s value of price and service which didn’t mesh well with Spirit’s low service model. However, there’s a struggling carrier that would have benefitted immensely from joining forces: Southwest. Southwest had (in theory) no seat assignments and low cost as a priority. The two of them combined might have been able to synergized (hmm, I should learn to play golf if I use terms such as that!)
MAGA has absolutely nothing to do with conservative values.
100% correct.
Indeed, and that must be repeated over and and over.
Pocahontas doesn’t care, she flies private anyway…
This is absurd. If it costs X to operate then a company must charge Y. If Spirit couldn’t charge Y is because what? Just trying to force a floor where it’s not feasible, as seen by bankruptcy? This is the poorest of poor management, not fuel prices the customer pays for anyway. If Spirit couldn’t figure that basic fact out, farewell. Let the market dictate the cost of the ticket by demand. Don’t buy the ticket if too high and let them fall. The consumer demand dictates the true costs, not a slight increase in fuel. This is an absolutely ridiculous assessment.
The Democrat Socialists blocked the JetBlue/Spirit deal under Biden/Harris, and now the country pays the price. Can you imagine the destruction if we let the Democrats “Hate Trump” and run the country again?
Thank you for this, Kyle – I always enjoy reading your articles, and in this particular article you made some very good and salient points.
OMAAT has some useful information, but when it comes to high quality aviation journalism LALF is “light years ahead”,