Spirit Airlines announced it was shutting down immediately following a failed Washington bailout bid and a surge in oil prices
Spirit Airlines, a US-based low-cost carrier, has succumbed to the unprecedented energy crisis, Kremlin envoy Kirill Dmitriev has said, commenting on the company’s recent shutdown.
The airline announced on Saturday that it has begun an orderly suspension of operations, effective immediately, citing the recent surge in fuel costs and other pressures that have significantly impacted its financial outlook.
“Spirit Airlines collapsed – the first airline victim of the historic energy crisis, as jet fuel prices jumped from $2.5 to $4 per gallon. 17,000 laid off,” Dmitriev, who serves as Russian President Vladimir Putin’s special envoy for investment and economic cooperation, said later that day in a post on X.
Spirit’s bondholders reportedly turned down a last-minute rescue proposal from the Trump administration that could have provided up to $500 million to sustain the struggling airline. The plan would have placed the government ahead of other creditors and granted it a stake of up to 90% in the company.
The shutdown is set to leave around 17,000 people without work, including about 14,000 Spirit employees as well as thousands of contractors and others whose jobs rely on the airline. The elimination of the flights is also expected to result in higher fares across the industry.
The sudden and sustained rise in fuel prices in recent weeks ultimately left the company with no alternative but to pursue an orderly wind-down despite a restructuring plan agreed upon with bondholders in March, Spirit’s President and CEO, Dave Davis, said in a statement.
A mounting jet fuel crunch is hitting airlines worldwide as disruption in the Strait of Hormuz – a key energy chokepoint handling nearly a fifth of the global oil supply – amid the US-Israeli war on Iran has sharply reduced tanker traffic, delaying shipments and raising fears of the worst energy crisis in history, the International Energy Agency has warned.
READ MORE:
Middle East war fallout hits consumers worldwide
US President Donald Trump has repeatedly downplayed the impact of the Strait of Hormuz energy shock, arguing that the American economy would remain strong, and that energy disruptions would be temporary rather than economically damaging.
You can share this story on social media:
Read the full article here