Carrier collapses after ‘running out of runway’

Spirit Airlines has struggled for years, plagued by large, cash-strapped airlines copying its business model, failed mergers, high costs and, most recently, soaring jet fuel prices due to the Iran war. Then it faced its most unforgiving enemy: time.

“We’re just off the charts,” CEO Dave Davis said in an interview with CNBC on Monday.

Spirit had hoped to emerge from bankruptcy, for the second time in less than a year, by mid-2026. Four days before the US and Israel attacked Iran, a conflict that sent fuel prices skyrocketing, Davis said he and his team hoped the exit strategy could still work. But that was subject to lower fuel prices in April.

They didn’t.

“Toward the end of March, early April, it became clear that it was going to be difficult for us to get through,” Davis said, noting that crude oil prices were above $100 a barrel.

To try to save the company from collapse, Davis and others inside Spirit approached the Trump administration about a bailout.

“We are connected with other different people in the government, including [Commerce] Secretary [Howard] Lutnick, they’re contacts,” he said. “These guys … especially Commerce, they’re very eager to help.”

The Trump administration was working to get a $500 million loan for the airline to continue in a plan that would have given the US government a 90% stake in the company. Bondholders were absent and floated a counter-proposal.

“Our management also worked hard to try to do something,” said Davis.

The two sides have been at loggerheads over the terms of the deal and it was clear Thursday that it would not work.

“I think we just ran out of time,” he said.

Spirit said that approximately 17,000 people, both direct and indirect airline workers, lost their jobs due to the collapse of the company. Other carriers, smelling blood, have been hanging around for almost a year if not, and within hours of the airline’s downfall they were boarding Spirit customers with airline tickets and adding to their schedules when Spirit’s yellow planes weren’t available.

Spirit has hired airline executive Davis, most recently CFO at Ilanga Countrya year ago, about a month after the company emerged from its first bankruptcy. Critics say he avoided major changes in that first bankruptcy, such as shedding more assets to cut costs.

Last August, the airline filed for Chapter 11 bankruptcy protection and, facing many of the same problems, even though it had cut back on flights, jettisoned some of its Airbus planes and crew members to save money.

Davis previously worked at Northwest Airlines, which it is affiliated with Delta Air Lines in 2008, he rejoined US Airways, which he joined American Airlines in 2013. Once United Airlines again Southwest Airlinesfour airlines control about 80% of US capacity, after a major wave of consolidation.

More consolidation is possible and “that’s what the industry needs,” Davis predicts. He said if Moya is planned to get by JetBlue Airlines he was not blocked by a judge two years ago “I believe we would not be in the situation we are in now.”

Low-cost airlines have long been a headache for major legacy carriers, as they flocked to the market and offered eye-catching fares.

“There’s no better example of that than Spirit,” Davis said.

But major airlines began to copy the other budget model, offering basic economy tickets and additional fees. That hurts carriers like Spirit, which were profitable in the 2010s but haven’t turned a profit since 2019.

“Everyone has seen the low-cost airlines take a lot of money,” he said. “The shoe was on the other foot then, and that’s where we are today.”

He said another advantage is that the major airlines have their own major credit card programs, where they get money from banks when customers swipe their cards, which is a business that gives them a big cash boost to deal with weather like high gasoline prices.

Davis said that in Moya’s last days he was between Washington, DC, and the company’s headquarters in Dania Beach, Florida, trying to get a deal. Some employees, including pilots, did not get the final word about the airline’s last 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 the vendors stop working. The fuelers stop refueling. Some workers are almost not coming in. So you’ve got planes and people and passengers scattered all over the world. It has to be done systematically, and it has to be done at once.”

Davis said he remains at Spirit to oversee the airline’s closure. Leased aircraft will return to lessors. Their owners will be sold. The gates will be monitored by airports and possibly used by other airlines. About 130 other employees are expected to stay in that job.

Asked if he would stay in the industry, Davis said: “I love aviation, and I love this industry, so I probably won’t leave it, even though it gets tough and taxing at times.