00:00These are the average flight prices when Spirit flew a route.
00:04And these are the prices of those same routes after Spirit stopped flying them.
00:09All of the fares went up, some by more than $100.
00:15Now with all the Spirit's routes gone, imagine how much fares are going to rise in the U.S.
00:19For 34 years, Spirit Airlines sold fares as cheap as $39 to Florida and Chicago.
00:25At its peak in the mid-2010s, it was the largest low-cost carrier in North America, employing 17,000
00:32people.
00:33It was the Spirit effect. Its rock-bottom fares pushed ticket prices down across the industry.
00:39But in May 2026, Spirit shuttered all operations.
00:449,000 flights were canceled and employees were left scrambling with little information.
00:49Spirit flight has now been canceled.
00:54Now we have 175 Ohioans really pissed.
00:58So how did Spirit become a low-cost giant?
01:02What happened to the airline?
01:03And what does all of this mean for passengers and crews?
01:07Spirit Airlines started out in 1964 as a trucking company, moving car parts in Michigan.
01:14In 1983, Ned Holmfeld launched the company's first passenger airline in Detroit, calling it Charter One.
01:21It focused on gambling trips, with routes to Atlantic City, New Jersey, and later to warmer gambling routes in Florida
01:29and Vegas.
01:31In 1992, it finally became Spirit Airlines, adding four DC-9 jets to its fleet.
01:38Spirit was small, but it gained early momentum with cheap fares.
01:42In 1993, it flew more than a quarter million passengers and generated $21 million in revenue.
01:50You have to understand that flying didn't start out as a thing for the masses.
01:53Southwest pioneered the low-cost model back in the 1970s and unlocked travel for so many people,
01:58and then decades later, Spirit took it to another level.
02:01In 2004, Spirit adopted an ultra-low-cost business model,
02:06which meant you got a personal item and an unassigned seat, and that's it.
02:10Everything else was extra.
02:12Snacks, legroom, baggage, printing your boarding pass, even water.
02:18And that was all extra cash in Spirit's pocket.
02:22CEO Ben Baldanza took over in 2006 and leaned even further into the airline's low-cost branding.
02:29He made the seats thinner and packed more passengers onto the airplane.
02:34And he also endorsed the brand's controversial ads.
02:38Like this one, after the Deep Horizon oil spill in 2010.
02:42Or this ad, a tongue-in-cheek reference to people's interest in older women.
02:48The controversial ads, they had shock value.
02:50They weren't going after high-class travelers.
02:52They were going after gamblers and spring breakers.
02:54These ads worked for their working-class audience.
02:57At its peak in the mid-2010s, Spirit Airlines had 200 planes and was valued at $6 billion.
03:04It had among the best safety records, with no fatal crashes in its entire history.
03:10At one point, it was rated second in timeliness.
03:14People loved to hate on Spirit's nickel and diming, but it had a big influence on the industry.
03:20There was such a big appetite for low fares in the United States that America's biggest airlines felt threatened by
03:25Spirit.
03:25In the 2010s, Delta and American, much bigger and older airlines, started adding super cheap basic economy fares to compete
03:35with Spirit.
03:36But soon, the cheapskate identity that had led to Spirit's early success weighed it down.
03:43Everything started to unravel after the pandemic.
03:46First, labor costs soared amid a pilot shortage.
03:49And post-COVID, travelers were increasingly more willing to pay for premium experiences, and Spirit just couldn't offer that.
03:56Business travelers wanted first-class seats and access to airport lounges.
04:01The average flyer now wanted free carry-ons, more legroom, and seat-back screens included in the ticket price.
04:08Now, Spirit did try to adapt.
04:11It added extra legroom and refreshed big front seat, its version of first-class.
04:16It bundled fares to simplify add-ons like seat selection and baggage.
04:21But despite its efforts, it couldn't shake the low-cost identity it had spent so many years building.
04:27They were essentially a Waffle House trying to be a Michelin star restaurant.
04:30They weren't built for the clientele that largely goes to Delta United.
04:34Then, among economic uncertainty and inflation, demand for domestic travel began to slow.
04:41Spirit's normal, price-sensitive customers were spending less on travel.
04:45People who could afford to travel shifted internationally, especially to Europe.
04:51That was good for carriers like Delta that offered long-haul business class.
04:55Those seats cost thousands of dollars and make up a majority of a flight's revenue.
05:00But Spirit just didn't have those routes, and so it couldn't capture that premium revenue.
05:04In four years, the airline lost $2.5 billion.
05:09In 2022, JetBlue tried to buy Spirit Airlines.
05:14But two years later, a federal judge blocked the deal, ruling it violated antitrust laws.
05:20So in November 2024, Spirit Airlines went bankrupt.
05:24It did unload debt, coming out with a much cleaner balance sheet.
05:28But right after, it faced soaring jet fuel prices and high aircraft lease costs.
05:34So in August 2025, with over $8 billion in debt, it declared bankruptcy again.
05:42Spirit slashed routes, shrink its network, sold planes, and cut its staff just to stay afloat.
05:46Spirit flew 500,000 fewer travelers in February 2026 compared to the year before.
05:53In a final Hail Mary, Spirit Airlines was in talks with the Trump administration about a $500 million bailout package.
06:01We're thinking about doing it, helping them out, meaning bailing them out or buying it.
06:06I think we just buy it.
06:08Trump wanted to use Spirit's planes to move military and cargo troops.
06:11His proposal would have basically given the government control over Spirit.
06:15But the government couldn't find the funding, and the talks stalled.
06:19On May 2, 2026, Spirit Airlines closed completely.
06:23Spirit Airlines is going out of business.
06:26Flights were canceled overnight.
06:28Thousands of people were stranded.
06:30And 1.8 million summer travelers were affected.
06:33Spirit's flight has not been canceled.
06:36No!
06:37Currently stuck in the Orlando airport, trying to get home.
06:41Now we have 175 Ohioans really pissed.
06:45This is the line.
06:47And they're rebooking you on flights for tomorrow that will not take place because the company will not exist tomorrow.
06:54This is the chaos that has left over.
06:57Spirit has kept funds on hand in case this happened.
07:01So it is refunding everyone who booked directly with the airline.
07:05But what does all of this mean for the airline industry going forward?
07:10Well, for one, passengers can expect flight prices to go up.
07:15I've heard a lot of chatter online from folks saying that Spirit's route closures won't affect them.
07:19But even if you fly at the highest levels, it will affect you because Spirit was the pressure point that
07:23kept fares low.
07:24Senior aviation reporter Taylor Raines found that in most cases, when Spirit Airlines left a route, flight prices went up
07:32on average by 14 percent.
07:34Budget and price sensitive customers, they can still book with Allegiant or Frontier.
07:38There's also a Velo and Breeze. These are low cost carriers.
07:41But without Spirit, there are just fewer options.
07:43This comes at a time when ultra luxury cabins are overtaking budget ones.
07:48Rich people, they aren't as affected by the economic downturn that has been affecting most people's wallets, including mine.
07:54So even if gas is $5 a gallon, the millionaires are still going to fly.
07:58Taylor says we can expect to see more investment on international long haul flights from U.S. airlines.
08:04This is already happening. United and Delta, even American, they've all rolled out brand new business class cabins with doors,
08:11all the bells and whistles to try to attract that premium demand, really doubling down.
08:15And that's where Spirit just couldn't keep up. It didn't have that product to match. And that's what the people
08:21wanted.
08:21But while travelers might have to shell out a little more for a plane ticket, Spirit Airlines employees will face
08:28the worst financial stress.
08:30These people have already set their ways into their finances. They've already set their budget. And now their lifestyle is
08:38going to change.
08:39Yanisha Thomas was at home in Central Florida when she got an email at 1230 a.m. on Saturday saying
08:46Spirit was shutting down.
08:47Basically, it just felt like a breakup. It felt like me being in a relationship and my boyfriend was cheating
08:54on me.
08:55And basically, I was the only one that didn't know about it.
08:58Yanisha has been with Spirit for four years.
09:00It's like a family. Or it's your home. And now your home is burnt down and you have to start
09:06from the ground.
09:08These people have not been into an interview in years.
09:11And working for a new airline might mean starting from the bottom.
09:15I do go ahead and say, OK, I'm going to try and get a job with United.
09:19I still have to go to the training, which is four weeks.
09:22Some of the training are not paid. I have to learn a whole entire new plane. That is why everyone
09:29is crying.
09:30Spirit's loss is more than an airplane seat. It's the entire towns in Florida where Spirit was largely the only
09:35way to get there.
09:36So all of the communities, employees that were in that town that supported the operation, that's all gone.
09:41You pay for what you want. It might not work for everyone. Fine. But we are here for the people
09:47that need us. I know now a lot of people need us.
09:53In the wake of the Spirit announcement, a TikTok video went viral, hoping to save the airline.
09:58Hey, I had a genius idea. Spirit Airlines just went bankrupt, right? We could buy Spirit Airlines.
10:03In just a few days, pledges have topped over $130 million. Now the movement is backed by Spirit Airlines' union.
10:13We've got your back too, so by all means.
10:15I don't believe we're dead. Because the people are keeping us alive.
10:20I love the effort and I agree that Spirit is worth saving strictly for the competition that keeps fares low.
10:25But it was heavily in debt. There are a lot of regulations, rest rules.
10:30There's so much to running an airline that I think it may be a little more complicated than just a
10:35lot of commitments to funding this airline.
10:38All of this raises the question, what's the future of budget airlines in the U.S.?
10:43If the largest can't survive, who can?
10:46With soaring jet fuel prices due to the conflict in Iran, budget carriers are being hit really, really hard.
10:51Spirit even said in its recent hearings after its closure that that was kind of the nail in the coffin.
10:57And Spirit, unlike legacy carriers, doesn't have these premium high-dollar business and first-class cabins to fall back on.
11:03But do I think other budget carriers like Frontier or Allegiant will fall tomorrow?
11:06No, but I do think they have a tough road ahead of them.
11:09In fact, Frontier's stock rose after the Spirit announcement.
11:13And JetBlue announced $99 fares to Florida.
11:17I think there will always be some need for some airline out there to offer budget seats.
11:21It may just be more expensive.
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