Carrier collapsed after it ‘ran out of runway’
A Spirit Airlines plane is parked at Hollywood Burbank Airport in California on April 16, 2026.
Justin Sullivan | Getty Images
Spirit Airlines has struggled for years due to larger, cash-rich airlines copying its business model, as well as failed mergers, high costs and, most recently, a surge in jet fuel prices due to the war in Iran. Then he faced his deadliest enemy: Time.
“We were about to go off track,” CEO Dave Davis said in an interview with CNBC on Monday.
Spirit had hoped to emerge from bankruptcy in mid-2026, its second in less than a year. Four days before the United States and Israel attacked Iran, which sent fuel prices soaring, Davis said he and his team were optimistic that the exit strategy could still work. However, this was due to the moderate course of fuel prices in April.
They didn’t.
Noting that crude oil prices were above $100 per barrel, Davis said, “By the end of March, the beginning of April, it became clear that it would be difficult for us to get through this process.”
time is up
Other airlines are leaving printed instructions for passengers affected by Spirit Airlines’ closure at LaGuardia Airport Marine Air Terminal in New York on May 2, 2026.
Leslie Josephs/CNBC
To save the company from collapse, Davis and others inside Spirit talked to the Trump administration about something. recovery.
“We contacted various people in the government, including [Commerce] Secretary [Howard] “Through some connections,” Lutnick said, “these guys…especially Commerce, are very willing to help.”
The Trump administration was working on a $500 million loan proposal to keep the airline afloat under a plan that could give the U.S. government up to a 90 percent stake in the airline. The bondholders disagreed and made a counteroffer.
“Our bondholders have also worked hard to get something done,” Davis said.
The two sides were far apart on deal terms, and it was clear Thursday the deal wasn’t going to work.
“I think we’re out of time,” he said.
Spirit said about 17,000 people lost their jobs during the airline’s collapse, both direct and indirect airline workers. Smelling blood, other carriers had been running in circles for nearly a year, or even longer, and within hours of the airline’s collapse, they were scrambling to both reach ticketed Spirit customers and add to their schedules in the absence of Spirit’s yellow planes.
What’s next?
Spirit Airlines poster on the LaGuardia Airport shuttle bus the day the airline was closed.
Leslie Josephs/CNBC
Spirit hired Davis, a longtime airline executive who was most recently the company’s chief financial officer. Land of the SunIn April 2025, about a month after the company emerged from its first bankruptcy. Critics said the first bankruptcy avoided larger changes, such as losing more assets, to cut costs.
Last August, the airline filed again for Chapter 11 bankruptcy protection, facing many of the same problems, but reduced flights, got rid of some of its Airbus jets and furloughed its crew to save cash.
Davis previously worked for Northwest Airlines. Delta Airlines He also worked for US Airways, which merged with US Airways in 2008. American Airlines In 2013. United Airlines And Southwest AirlinesFour airlines control about 80% of U.S. capacity after a major wave of consolidation.
Davis predicted that further consolidation was likely and that “the downstream end of the industry needs it.” He said Spirit plans to buy JetBlue Airlines Had he not been blocked by the judge two years ago, “I believe we would not be in the situation we are in now.”
Low-fare airlines were a headache for the big legacy carriers because they entered markets and offered eye-popping prices.
“There was no better example of this than Spirit,” Davis said.
But then major airlines began copying some of the budget models, offering no-frills basic economy tickets and other surcharges. That hurt carriers like Spirit, which was profitable in the 2010s but hasn’t been profitable since 2019.
“Everyone saw that low-cost airlines were taking a big share,” he said. “Shoes were in a completely different situation then than they are today.”
Another benefit major airlines have, he said, is their massive credit card programs where they earn money from banks as customers swipe their credit cards, giving them a greater cash cushion to weather shocks like high fuel prices.
Davis said Spirit was trying in its final days to reach an agreement between Washington and its corporate headquarters in Dania Beach, Florida. Some staff, including pilots, did not get final words about the airline’s final flights until they were close to landing on Friday night or early Saturday.
“You can’t announce in advance that you’re going to close,” he said. “What happens is: Vendors stop working. They stop refueling. Some of the crew probably won’t get in. So planes, people and passengers are scattered all over the place in foreign countries. This needs to be done in a very orderly manner, and it needs to be done all at once.”
Davis said he will remain with Spirit to oversee the airline’s closure. The leased aircraft will be returned to the lessors. Those who have it will be sold. The gates will be controlled by airports and will likely be used by other airlines as well. Approximately 130 employees are planned to remain in this position.
When asked if he would stay in the industry, Davis said: “I just love airplanes and I love the industry, so I’ll probably never leave it, even though it can be very exhausting and exhausting for one person sometimes.”
