Anyone booking on Spirit Airlines kind of knew they were taking their flight into their own hands. America’s original ultra-low-cost airline has been on death’s door since the pandemic.
First, it tried to merge with JetBlue. Then it declared bankruptcy twice in a single nine-month period. In recent weeks, Spirit had hoped to persuade the Trump administration to float it a $500 million bailout that would have given the government a majority stake, but President Donald Trump ultimately didn’t go for it.
On Saturday morning, many travelers arrived at the airport to find flights canceled and check-in kiosks vacated. “Spirit Airlines died as it lived: lots of angry customers and no one picking up the phone,” Saahil Desai wrote in The Atlantic.
What killed Spirit? Amazingly, it wasn’t Spirit’s famously terrible product that ultimately did it in. Most people hated flying Spirit, to be sure — but they tolerated the poor service and extra fees because base fares were so inexpensive.
Spirit deployed a suite of tactics to offer such cheap fares. It cut leg room and reclining space to pack more passengers on each plane than legacy airlines did. It also eschewed the typical hub-and-spoke model — where carriers funnel passengers from small and midsize cities to big central airports — and focused on offering nonstop flights between large cities and popular vacation spots.
Importantly, the company also — in the immortal phrasing of the consulting firm McKinsey — “excelled at generating incremental revenue at relatively high margins from optional services.” That’s consultant-speak for $4.50 in-flight water and $33 carry-on bags.
Even with those upsells, however, Spirit operated on thin margins…and that math hasn’t worked since the pandemic. Rising labor costs drove up Spirit’s expenses, while economic uncertainty and tighter household budgets dampened demand among cost-conscious travelers. In recent weeks, the company had warned that it could not absorb rising fuel prices, which have almost doubled since the Iran war started.
The (other) Spirit effect. But the Trump administration accepts no responsibility for Spirit’s abrupt closure. Administration officials are instead blaming President Joe Biden for blocking JetBlue’s attempt to buy the airline four years ago.
At the time, Biden’s Department of Justice argued there was too much overlap in the two airlines’ routes — meaning the merger would decrease competition. And if there’s anything positive to be said about Spirit, it’s that the company’s bottom-barrel fares have forced other airlines to lower their prices. One 2017 study found that fares were roughly a fifth cheaper in markets where Spirit or another low-cost airline had a presence. The airline industry even has a name for this: “the Spirit effect.”
Ultimately, however, that low-fare arms race did Spirit in. To compete with ultra-low-cost carriers, most legacy airlines have begun charging for previously free amenities and introduced a “basic economy” tier that apes Spirit’s no-frills ethic. As Vox’s Whizy Kim explained in 2024: “Fliers today are paying a slightly lower base fare for a worse flying experience.”
Because of their size and scale, those carriers can also afford to operate more flights per day to more destinations, which they can offer in conjunction with popular loyalty programs. Spirit didn’t stand a ghost of a chance.
America’s new most-hated airline. With Spirit out of the game, which airline will inherit the ignominious title of most-hated airline in America? Among large carriers, the title passes to American Eagle, a network of regional flights operated by American Airlines, according to YouGov. If you’re looking at all US airlines, then Allegiant — a low-cost carrier that mostly services vacation destinations — was already less popular than Spirit was.
Don’t underestimate the airline industry’s ability to give you new reasons to hate it, though. Some analysts predict that Spirit’s closure will push other airlines’ fares up: CBS found average fares rose roughly $60, or 23 percent, when Spirit exited a route.
That’s on top of rising fuel costs from the war in Iran, which could lead airlines to cut flights, raise fares, and impose further fees. And you’ll still pay for your carry-on. The indignity.
