The carrier collapsed after ‘leaving the runway’

Spirit Airlines has struggled for years, battered by larger, cash-rich airlines copying its business model, as well as failed mergers, higher costs and, most recently, a surge in jet fuel prices due to the war in Iran. She then faces the most merciless enemy: time.

“We kind of ran out of runway,” CEO Dave Davis said in a CNBC interview Monday.

Spirit had hoped to emerge from its second bankruptcy in less than a year, in mid-2026. Four days before the United States and Israel attacked Iran, a conflict that sent fuel prices skyrocketing, Davis said he and his team were optimistic that the exit strategy could still work. But this was dependent on a moderation in fuel prices in April.

They didn’t do it.

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

To try to save the company from collapse, Davis and others within Spirit talked to the Trump administration about a bailout plan.

“We have established contact with various people within the government, including [Commerce] Secretary [Howard] Lutnick, through some contacts,” he said. “These guys…especially Commerce, are very eager to help.”

The Trump administration was working on a $500 million loan offer to keep the airline afloat, part of a plan that could have given the U.S. government a stake of up to 90% in the carrier. Bondholders disagreed and launched a counterproposal.

“Our bondholders have also worked very hard to try to get things done,” Davis said.

The two sides were far apart on the terms of the deal and it was clear Thursday that it wasn’t going to work.

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

Spirit said some 17,000 people, direct and indirect workers at the airline, lost their jobs in the airline’s collapse. Other carriers, smelling blood, had been circling for nearly a year or more, and within hours of the airline’s collapse they were rushing to Spirit customers with airline tickets and adding to their schedules in the absence left by Spirit’s yellow planes.

Spirit hired Davis, the airline’s longtime executive and most recently CFO of Land of the Sunin April 2025, about a month after the company emerged from its first bankruptcy. Critics said this avoided bigger changes in that first bankruptcy, such as removing more assets to cut costs.

Last August, the airline filed for Chapter 11 bankruptcy again, facing many of the same problems even as it cut back flights, got rid of some of its Airbus aircraft and laid off crew members to save money.

Davis previously worked at Northwest Airlines, which partnered with Delta Airlines in 2008, and also worked at US Airways, which merged with American airlines in 2013. With United Airlines And Southwest Airlinesthe four airlines control around 80% of US capacity, after a major wave of consolidation.

More consolidation is likely and “what the bottom rung of the industry needs,” Davis predicted. He said that if the planned acquisition of Spirit by JetBlue Airways 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 been a headache for large legacy carriers for some time as they penetrated markets and offered eye-catching fares.

“There was no better example than Spirit,” Davis said.

But then the big airlines started copying part of the business model, offering basic economy tickets with no frills and other extra fees. This hurt carriers like Spirit, which was profitable in the 2010s but hadn’t made a profit since 2019.

“Everyone has seen low-cost airlines take massive share,” he said. “Back then the situation was completely different from today.”

He said another advantage big airlines enjoy is their huge credit card programs, where they make money from banks when customers swipe their credit cards, an activity that gives them a greater cash reserve to withstand shocks such as high fuel prices.

Davis said that during Spirit’s final days, he was between Washington and the company’s headquarters in Dania Beach, Fla., trying to reach a deal. Some staff, including pilots, didn’t get the final say on the airline’s final flights until they approached landing Friday evening 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 tankers stop refueling. Some crew members probably don’t come. So you have planes and people and passengers scattered all over foreign countries. It has to be done in a very orderly fashion, and it has to be done at the same time.”

Davis said he would stay with Spirit to oversee the airline’s closure. The leased planes will return to the lessors. Those that belong to you will be sold. Boarding gates will be supervised by airports and likely used by other airlines. About 130 other employees are also expected to remain on duty for this work.

When asked if he would stay in the industry, Davis said, “I love airplanes and I love the industry, so I’ll probably never leave it, even though sometimes it’s very trying and trying on a person.”