The aviation industry is reeling after Spirit Airlines, a major ultra-low-cost carrier in the United States, announced it would cease all operations effective immediately. The airline, known for its bright yellow planes and hundreds of daily flights, employed approximately 17,000 people. In a statement on its website, Spirit said it had begun an orderly wind-down of its operations. All flights have been cancelled, and customer service is no longer available.
Government Declines Bailout
The shutdown followed the government's decision not to provide a bailout for the cash-strapped business. Spirit had been struggling financially since the Covid-19 pandemic, burdened by rising operating costs and growing debt. However, the ongoing war in Iran exacerbated the situation, leading to a severe jet fuel crisis.
Fuel Crisis Impact
The Strait of Hormuz, which handles about 20% of the world's oil supply, has been effectively blocked by Iran since February. This closure has caused jet fuel prices to skyrocket from around $85 to $90 per barrel to between $150 and $200 per barrel. The crisis has already claimed one UK airline, Ascend, which cancelled all flights and operations last week.
Global Airlines Affected
Airlines worldwide are cutting routes and introducing extra charges to manage soaring fuel prices. On April 16, Fatih Birol, head of the International Energy Agency (IEA), warned that Europe has maybe six weeks of jet fuel left, advising passengers to expect cancellations into the summer.
- Aegean Airlines raised ticket prices by about 7% to 8%.
- Aer Lingus dropped over 500 flights, citing mandatory maintenance.
- Air France made price adjustments, increasing long-haul return fares by €50 and short-haul by €10.
- KLM cancelled 160 flights in Europe over the coming month due to fuel shortages.
- Air India expanded a fuel surcharge on domestic and international routes, adding a $125 fee for new bookings to and from Europe.
- British Airways owner IAG initially said it would not raise prices but later acknowledged fares would likely rise.
Dozens of other airlines have also been affected by the ongoing crisis.
