Last weekend, Spirit Airlines announced that it had begun to suspend operations on an orderly schedule, effective immediately, with the reason that fuel costs have skyrocketed recently and other pressures have seriously affected financial prospects.
Spirit Airlines collapsed - the first victim in the aviation industry of the historic energy crisis, when aircraft fuel prices increased from $2.5 to $4 per gallon. 17,000 people lost their jobs" - Mr. Kirill Dmitriev, Special Envoy of the Russian President for Investment and Economic Cooperation - shared.
Spirit Airlines bondholders are said to have rejected a last-minute bailout proposal from President Donald Trump's administration, which could provide up to $500 million to maintain the airline's struggling operations. This plan will put the government in a priority position over other creditors and allow it to hold up to 90% of the company's shares.
The shutdown is expected to leave about 17,000 people unemployed, including about 14,000 Spirit Airlines employees and thousands of contractors and people whose jobs depend on the airline. Flight cuts are also forecast to increase fares throughout the industry.
The sudden and prolonged increase in fuel prices in recent weeks has ultimately left the company with no choice but to proceed with a orderly shutdown, despite the restructuring plan agreed upon with bondholders in March, Spirit Airlines Chairman and CEO Dave Davis said in a statement.
The increasingly serious shortage of aircraft fuel is affecting airlines around the globe, as disruptions in the Strait of Hormuz - the energy artery that processes nearly 1/5 of global oil supplies - amid the US-Israel conflict with Iran have sharply reduced oil tanker traffic, causing delays in transportation and raising concerns about the worst energy crisis in history, according to a warning from the International Energy Agency (IEA).
