Spirit Airlines closure impacts thousands of employees; refunds issued to customers

AUSTIN, Texas - For the first time in 25 years, a major U.S. airline has collapsed. 

Thousands of Spirit Airlines employees are starting the week without jobs after the carrier ceased all operations over the weekend, leaving travelers stranded across the country.

The backstory:

Every trace of Spirit Airlines is gone. Signs at the luggage drop-off counters and the airline’s iconic yellow branding on airport screens have all been removed.

The Spirit counter has officially grounded its operations, impacting roughly 17,000 employees.

"The official closure was at 3 a.m. And at that point in time, everyone was still awake. You know, all of our flight attendants across the system were all waiting, holding their breath to see what would happen," said Don Reno Intreglia, a Spirit Airlines attendant and an Association of Flight Attendants (AFA) Union rep.

Spirit Airlines shuts down after 34 years

After more than 30 years in business, Spirit Airlines has closed. Now, passengers are waiting for refunds and trying to secure new flights.

​Many passengers were left stranded, with some already at their gates, and others were even mid-journey, when the abrupt announcement came on Saturday, May 2.

​"I've been flying with Spirit for a while and for you guys to do this within hours of my flight is very unacceptable," a passenger said.

Spirit Airlines was forced to shut down after talks for a government bailout fell apart.

FOX 7 Focus: Spirit Airlines shuts down

Airlines expert Gary Leff reacts to Spirit Airlines shutting down after 34 years.

"We had a lot of hope that a deal would be reached. And when that didn't happen, it was like the floodgates opened," Intreglia said.

​Before the pandemic, Spirit Airlines was turning consistent profits and was considered a low-cost competitor in the market. However, it has taken several hits in recent years, leading up to this collapse.

​In a statement, the budget carrier attributed its closure to skyrocketing jet fuel costs, compounded by the ongoing conflict in Iran, which finally pushed the company over the edge.

"The industry largely expected Spirit to be liquidated even back in December. So the run-up in jet-fuel prices accelerated things. It's why they ceased operations today, but it likely would have happened in the coming weeks either way," said Gary Leff, an author at View From the Wing.

​This follows two recent bankruptcies and a merger attempt with JetBlue that was blocked by the federal government in 2024.

​"The Biden administration's antitrust policy broke up the American Airlines JetBlue partnership. And when they did that, they undermined the rationale for the JetBlue acquisition of Spirit. And what that did was it meant that there was no longer a viable business model," Leff said.

What's next:

The Association of Flight Attendants is petitioning the Labor Department for a $600 weekly supplement to jobless benefits and emergency help to maintain health coverage for workers who are now unemployed.

A spokesperson with Austin-Bergstrom International Airport said travelers booked on a Spirit flight should contact the airline or their travel agent immediately.

According to Spirit, the majority of flyers were refunded on Saturday evening. The airline added that those refunds may take time to appear in customers’ accounts, as Monday is the first banking day since the shutdown.