Discount carrier Spirit Airlines ceased operations on Saturday. It had been struggling with skyrocketing fuel costs and mountains of debt. A proposed government bailout plan unraveled, leaving thousands of passengers, employees and investors in limbo. Ali Bauman reports from Newark’s Liberty International Airport.
Good evening, everyone, and thank you for joining us on this Saturday. There is no more runway for Spirit Airlines. The discount carrier known for its yellow planes with “Howdy” painted on the wingtips ceased operations today. It had been struggling with skyrocketing fuel costs and mountains of debt. A proposed government bailout plan unraveled, leaving thousands of passengers, employees, and even investors in limbo. CBS’s Ali Bauman is at Newark Liberty International Airport and leads us off tonight. Ali?
Good evening, Jericka. For 34 years, Florida-based Spirit paved the way for so-called nickel-and-dime flights. Passengers could buy a $30 plane ticket but had to pay extra for everything, even a boarding pass. It collapsed today, facing rising debt, intense competition, and skyrocketing prices of jet fuel.
Is this a joke? But it’s real.
It’s a big surprise for me. It’s a big surprise.
I’m like– feel so stranded.
These passengers came to New York’s LaGuardia Airport ready to fly, only to be grounded.
They’re telling us that Spirit has been shut down. No email, no phone call, nothing—nothing of the sort.
Spirit’s final flight landed overnight at Dallas-Fort Worth, where air traffic controllers said goodbye to the pilots.
(Air traffic controller) Well, it was a pleasure working with you guys, and I wish you the best.
(Pilot) Thank you. Thank you very much.
The airline ran out of cash after two bankruptcy filings in the last two years. Today Spirit’s CEO said there was no alternative, blaming “the sudden and sustained rise in fuel prices.” Jet fuel prices are up more than 70% since the war with Iran began.
How does Spirit closing impact this industry overall?
In the short term, not that much, because they didn’t fly that many people. But in the long term, for people who are leisure travelers, they’re going to have to spend a lot more money to go to where they want to go.
The Trump administration had offered a $500-million bailout deal, but Spirit’s bondholders opposed the terms, one of the creditors telling CBS’s Kris Van Cleave, “You can’t breathe life into a corpse.”
We’re going to see a number of low-fare carriers either merge, be acquired, or fail, because the business model no longer works in an economic environment that’s this harsh.
At its peak, Spirit employed 17,000 people. Tonight, some of them who were still working as agents or pilots are like the passengers, scrambling to find a way home.
Jericka?
Yeah, scrambling, Ali. But what options do these Spirit ticket holders actually have?
Well, the Transportation Secretary said today that several airlines are offering passengers capped or discounted fares. For employees, they’re offering spare seats and preferential employment interviews. But what passengers need to know, Jericka, is that those discounted rates are only going to last a few days, so anyone who needs to rebook should do so as soon as possible.
So frustrating. Thank you, Ali Bauman.