Spirit Airlines may be nearing a complete shutdown, with a new report indicating the carrier could move toward liquidation within days as it struggles to emerge from bankruptcy amid sharply rising fuel expenses.

According to Bloomberg, the ultra-low-cost airline is at risk of ceasing operations as soon as this week, with escalating fuel prices tied to the ongoing conflict involving Iran placing additional pressure on the already struggling company.

Spirit, widely recognized for its bright yellow aircraft and budget-friendly, no-frills model, is the largest ultra-low-cost carrier in the United States. The airline operates flights from several hubs, including Terminal A at LaGuardia Airport, a smaller but historically significant facility.

The Florida-based airline is currently navigating its second bankruptcy process. Just last month, Spirit outlined plans to reorganize its business, including upgrading its fleet, introducing more premium fare options, and concentrating service on key markets such as Fort Lauderdale, Orlando, LaGuardia, and Newark.

Aviation analyst Zach Griff, who writes the From the Tray Table newsletter, warned that the airline’s potential collapse could have far-reaching consequences across the industry, particularly when it comes to pricing.

“Fuel costs could be the dagger to Spirit, right? I would be incredibly sad to see the loss of Spirit, and not even because I like to fly Spirit and, you know, it has- they’ve rebranded. It’s much better. But Spirit’s existence keeps every other airline in check,” Griff said.

Industry observers note that when an airline liquidates, flights typically stop immediately, leaving passengers stranded and uncertain about how to recover their money.

Griff said travelers may still have options if that scenario unfolds, particularly through financial institutions.

“The credit card companies will end up being the ones who foot the bill or kind of help you out with getting that refund if Spirit were to liquidate, you know, through chargebacks and things like that,” Griff said.

{Matzav.com}