Airlines are betting that they can hold onto their pricing power even as the price of fuel decreases due to strong demand and fewer competitors in the industry.
Although Spirit was a small airline, it had a sizable impact on airfares across major markets in the U.S. Now that it has shut down, industry experts say to expect more airfare increases compounded by high fuel costs.
In just the span of two months fuel costs are up more than double since the start of the Iran war, according to new data from the Department of Transportation.
Airline failures are an accepted part of the industry rough-and-tumble in many countries. Spirit's collapse is forcing a fresh look at the costs and benefits of America's protectionist instincts.
Spirit said it explored every possible option to stay in business, but it was left with no other choice to liquidate because it did not have a sufficient amount of cash.