On Monday, the company's chief financial officer, Fred Comer, delivered tragic news to employees and customers. Despite attempts to save the company, the financial situation turned out to be too difficult to bear.
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“After months of brave struggle for reorganization and its almost complete success, [Spirit] there is no alternative but to wind down the business in an orderly manner“- announced Comer, quoted by Reuters.
He also added bitterly that currently “there are no real paths to restructuring or further operations.” The carrier suspended all flights last Saturday.
The failure of the White House's “final offer”.
The collapse of Spirit Airlines occurred in an atmosphere of political tension. On Friday, President Donald Trump announced that he would submit a “final offer” that was supposed to save the national giant of the budget segment. There was speculation about an unprecedented takeover by the state of as much as 90 percent. shares in the company for the amount of USD 500 million.
However, as CNN reports, these announcements remained only in the sphere of declarations – no new proposal was received by the company. The failure of government support sealed the fate of the carrier, which had been struggling with problems for years, going through bankruptcy procedures twice.
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War and fuel prices are the final nail in the coffin
Although Spirit Airlines had long struggled with financial instability, the final blow came from outside. The key factor turned out to be the drastically rising costs of aviation fuel. Raw material prices skyrocketed as a result of the escalation of tensions and the war between the United States and Israel with Iran. For a line that bases its business model on low margins, such a sharp increase in operating costs turned out to be an insurmountable barrier.
In the face of bankruptcy, the company is still trying to secure the fate of its staff – on Monday, a request was submitted to the court for permission to pay retention bonuses to employees who remained with the company until the very end.
What about Spirit Airlines passengers? The industry responds to the crisis
The abrupt end of operations on Saturday left thousands of passengers with useless tickets in their hands. The situation became so serious that Transport Minister Sean Duffy intervened.
In an official statement, he said that some of the competing airlines, as a gesture of solidarity and wanting to avoid an image crisis for the entire industry, announced relief for the injured. Spirit passengers can count on special price limits and discounts on alternative flights with other carriers, which is intended to help them return home after the sudden grounding of the “yellow plane” fleet.
