_WHAT’S HAPPENING_
Spirit Airlines abruptly ceased operations after a proposed $500 million federal bailout fell apart, stranding thousands of travelers and putting roughly 17,000 employees out of work. The ultra-low-cost carrier, which had already filed for bankruptcy twice since 2024, was unable to secure financing as bondholders balked at the rescue terms.
Since the collapse, debate has broken out in Washington and beyond over an essential question: who killed Spirit Airlines? Some point to rising fuel costs due to the war in Iran, as airlines across the board have been strained and are raising prices for consumers. Others point to action — or rather inaction — taken during the Biden administration, in which the Justice Department blocked Spirit from merging with JetBlue over anticompetitive concerns.
_THE FACTS_
Spirit Airlines shut down operations after talks for a Trump administration loan of up to $500 million fell apart late last week.
Jet fuel prices have doubled since the Iran war began, with fuel accounting for 20-30 percent of airline operating costs.
Spirit cited high fuel prices as the cause of its collapse, and the low-cost airline sector as a whole requested $2.5 billion in federal relief.
Transportation Secretary Sean Duffy blamed the Biden administration's 2024 decision to block a JetBlue-Spirit merger.
"[The Biden DOJ] bragged and said this was a victory for US travelers who deserve lower prices and better choices," Duffy stated. "This is not better for travelers. This is not better for pricing. This is not better for competition.”
Even Neera Tanden, the head of the Center for American Progress and former head of domestic policy under Biden, made similar arguments, blaming Biden's antitrust enforcers for killing Spirit.
Spirit had filed for bankruptcy twice—once in late 2024 and again in 2025—after losing several billion dollars since its last annual profit in 2019.
The big four legacy airlines — American, Delta, Southwest, and United — lobbied against a Spirit rescue, promising the Trump administration they would hire Spirit's employees if the airline was allowed to fail.
When Spirit entered a route, prices dropped across all carriers on that route by 17 percent — the "Spirit effect"; when it exited a route, fares rose 30 percent.
_OUR TAKE_
The blame game over Spirit's collapse has become a political football, with both sides containing truth. Spirit Airlines has been in dire straits long before the Trump administration, likely because its low-cost model is financially unsustainable. This is why the Trump administration rejected a bailout of Spirit: the taxpayer would simply be rewarding a failing business model. But the spike in fuel prices due to the Iran war was almost certainly the straw that broke the camel’s back.
The irony in this situation is that while Democrats championed the Biden administration's blocking of the merger between Spirit and JetBlue, the merger would have kept the airline sector more competitive. As noted above, Spirit’s low fares helped reduce travel costs across the board. Spirit going belly-up means there are fewer planes in the sky, reducing supply and driving up costs for everyone.
