Spirit Airlines’ collapse, rising fuel costs from the Iran War, and disrupted global aviation routes could mean higher fares and fewer choices for summer travelers. USA TODAY Consumer Travel Reporter Zach Wichter breaks down what these shifts mean for your summer plans.
Spirit Airlines Had an Outsized Impact on Airfares
Dana Taylor: Zach, Spirit Airlines was known for ultra cheap fares and a travel experience people either loved or loved to complain about. But beyond the memes and reputation, how significant is it that a major budget carrier has collapsed right before the summer travel season?
Zach Wichter: It is hugely significant. Spirit Airlines had a really almost outsized impact on the aviation market in the US. As an ultra low-cost competitor to the other major airlines, they forced these other airlines to drive their prices down in any market where they were competing with Spirit.
And so as we head into the summer, now that Spirit has exited the market, we’re really expecting to see higher airfares across the board — both because of the higher oil prices with the war in Iran, but also because this major competitor that was driving down prices is no longer there.
How the Iran War Is Affecting Flights
Dana Taylor: Airlines are also rerouting flights and dealing with instability in the Middle East. How much is that adding pressure to the entire airline industry right now?
Zach Wichter: It is adding pressure, but that pressure isn’t totally even across the industry. The war in the Middle East isn’t affecting domestic flights within the US, so we’re not going to see a huge impact on domestic summer travel. But for American travelers heading to Asia or Africa, the Middle East was a really major transfer point.
A good parallel here is the war in Russia and Ukraine — as a result, US airlines and many Western airlines can no longer fly Russian airspace, leading to longer, less efficient routing from the US to Asia. A similar effect could take place over the Middle East if the conflict becomes protracted.
Was the War the Final Straw for Spirit?
Dana Taylor: Spirit clearly had problems before the Iran conflict — failed mergers, debt, bankruptcy filings. So was the war really the cause of the collapse or more the final straw?
Zach Wichter: The war and the run-up in oil prices was more the final straw than the only reason for the collapse. Spirit had two consecutive bankruptcies in the last two years, and part of their plan to emerge from that most recent bankruptcy hinged on jet fuel prices being in the low to mid $2-a-gallon range. When oil prices spiked to the mid $4 range, it blew a hole in Spirit’s recovery plans.
Another headwind Spirit faced was that since the COVID pandemic, demand for travel has not recovered evenly — we’ve seen a much greater surge in demand for premium leisure travel. As an ultra low-cost carrier, Spirit was designed to serve a market that wasn’t performing as strongly as it was pre-pandemic.
Will Lower Fares Come Back?
Dana Taylor: We’ve already seen other airlines roll out rescue fares for stranded Spirit passengers, but long-term, do experts think those lower fares will stick around once the immediate fallout settles?
Zach Wichter: No. Those rescue fares were really temporary measures — only available for a matter of days to help passengers who were stranded get back home. Longer term, the trend definitely points toward higher airfares across the board because of oil prices and because this ultra low-cost competitor that was forcing other carriers to compete more directly on price is now gone.
TSA Lines and Airport Congestion
Dana Taylor: TSA is also getting additional funding and staffing support heading into the summer after horror stories about long lines. Could travelers actually notice a difference this year?
Zach Wichter: I expect this summer will look similar to other summers. The Transportation Security Administration lost approximately a thousand employees during the most recent partial government shutdown, and they’ve had some trouble attracting new candidates because of the uncertainty surrounding their funding. So I don’t think it’s going to be significantly different than other summers, but it will be better than it was in the spring.
What’s the Biggest Pain Point This Summer?
Dana Taylor: What’s the bigger pressure point for travelers this summer — higher ticket prices, fewer flight options, or congestion and delays?
Zach Wichter: I think of those three, fewer flight options is probably the least of the worries, because with Spirit out of the market, airlines are going to try to redeploy capacity and capture some of those passengers. The run-up in airfares is probably a little more significant than in other years because of what’s going on in the Middle East and the price of oil. That may be the most acute pain point for travelers.
Routes Most Likely to See Higher Fares
Dana Taylor: Are there particular routes or regions where people are most likely to see fare increases now that Spirit is gone?
Zach Wichter: Industry analysts I talk to are essentially in agreement that Spirit’s exit means higher airfares more or less across the board — but airlines also need to play a balancing act. If they raise fares too much too quickly, they could cannibalize demand and drive people away from air travel. Where you’re more likely to see the most significant increases is in markets where Spirit was either the only airline or was only competing with one other airline.
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