Spirit Airlines, the U.S. ultra-low-cost carrier (ULCC) that halted operations due to severe financial difficulties, has largely completed refunds for booked customers and returned its employees to their home bases.
According to Reuters on Wednesday, Spirit Airlines said it had completed refunds for most of its booked customers and that approximately 1,500 employees who had been stranded across the United States and Latin America due to the operational shutdown had returned to their original workplaces.
Spirit Airlines, which had planned to operate more than 4,000 domestic flights through the 15th of this month, held emergency bailout negotiations with the U.S. government. After those talks collapsed, the carrier announced the suspension of operations on Tuesday and began shutdown procedures, ending 34 years of operations.
Spirit Airlines fell into financial difficulty with declining revenue and rising costs after its merger with JetBlue Airways fell through in 2024. In August of last year, the company filed for its second bankruptcy protection and tried to overcome the crisis by selling aircraft, raising fares and streamlining operations.
However, aviation fuel prices surged after war broke out in the Middle East in late February of this year, making flight operations even more difficult. According to Axios, the company's cumulative losses from 2020 through 2025 are estimated to reach $5.9 billion (approximately 8.7 trillion won).
Spirit Airlines had been negotiating with the U.S. government to provide warrants granting up to a 90% stake in exchange for $500 million (approximately 740 billion won) in emergency liquidity support. However, the U.S. government was divided over whether and how to provide bailout funds, and some creditors strongly opposed the terms as unfavorable to them, causing the bailout negotiations to collapse.
Launched in 1992, Spirit Airlines is regarded as a company that significantly influenced the U.S. aviation industry. After private equity firm Indigo Partners acquired a stake in 2006, the carrier established a business model that slashed costs to the extreme and sold the lowest-priced tickets. While it drew criticism for charging separate fees for checked baggage and seat selection, the model worked successfully and prompted established airlines to change their pricing strategies.
The news of Spirit Airlines' shutdown has heightened tension across the aviation industry. The closure will immediately cost approximately 17,000 direct and indirect employees their jobs. In response, pilot and flight attendant unions have called for an expansion of unemployment benefits.
