Spirit Airlines faces shutdown amid ongoing war in Iran? Here's what report suggests

Spirit Airlines, a budget-friendly carrier in the US, is reportedly going to stop operations as early as today, a move that could leave travellers stranded, CBS News reported.

The report, citing sources, said that airlines' creditors are now questioning the carrier's ability to make upcoming debt payments in part due to the higher jet fuel cost amid the ongoing US-Iran war.

The budget carrier had more than 200 aircraft last year when it filed for bankruptcy last year in August. However, the company has now planned to scale down to around 80 jets by the third quarter.

Travellers must have a backup: Experts

Speaking to travellers at BWI airport, CBS reported that travellers rely on Spirit Airlines due to its low fares on shorter routes. Travellers are reportedly asking for options that could compete with Spirit in terms of its low fares.

Citing experts, the report added that those flying via Spirit should have a backup plan ready. While Spirit Airlines is still selling tickets, if the company's creditors decide to liquidate, the airline could be compelled to stop operations with little notice.

Spirit Airlines is at risk of liquidation

According to Bloomberg, any decision on a possible liquidation could come as soon as this week, though the situation remains fluid as Spirit holds talks with its creditors.

The development of a possible liquidation comes as Spirit Airlines presses ahead with a deep restructuring aimed at cutting costs and stabilising its finances after filing for bankruptcy twice.

In August 2025, it filed for bankruptcy protection for the second time with 214 aircraft. The Florida-based carrier emerged from its first bankruptcy, which was filed in March last year. Last month, Spirit said it plans to shrink its fleet to about one-third of its pre-bankruptcy size.

Last month, Spirit said it plans to shrink its fleet to about one-third of its pre-bankruptcy size. The budget carrier also called back nearly 500 pilots it furloughed in 2025 as it prepared to emerge from its second bankruptcy. It also reached a restructuring agreement with its lenders that would allow it to exit bankruptcy by late spring or early summer, Reuters reported. The company now plans to operate as a slimmer airline, focusing on routes and peak travel periods where demand is strongest.

The ultra-low-cost carrier built its turnaround on fuel costs averaging ‌about $2.24 per gallon in 2026 and $2.14 in 2027, based on its March disclosures. By mid-April, jet fuel prices were around $4.24 a gallon, roughly double the level assumed in its projections.

According to the company's March filing, it has addressed rising fuel costs by increasing fares and reducing capacity. It also states that being in bankruptcy provides the flexibility to further cut capacity and fixed expenses if fuel prices remain elevated.

Surging jet fuel prices have disrupted the global aviation industry, forcing airlines to raise fares and revise their financial outlooks. Prices spiked after the US and Israel targeted Iran in late February, rattling both aviation and energy markets, with airspace and the Strait of Hormuz closures intensifying the impact.