Spirit Airlines’ shutdown is a case study in what happens when a turnaround plan breaks

Good morning. After 34 years in operation, Spirit Airlines is shutting down. Its parent company, Spirit Aviation Holdings, announced Saturday that it had begun an orderly wind-down and canceled all flights.

The company said the decision followed unsuccessful efforts to restructure the business, raise capital, and pursue transactions that could strengthen its financial position. It cited a “material increase in oil prices” and other business pressures that weakened its outlook, adding that “with no additional funding available,” Spirit had no choice but to begin the wind-down. A possible Trump administration-led rescue deal was not reached.

For CFOs, the Spirit story may be less a travel-industry drama than a case study in what happens when a capital-intensive business loses the assumptions that made its model work.

In a Fortune article, “How Spirit Airlines’ business model collapsed,” Shawn Tully explains that Spirit built its advantage on ultra-low costs, no-frills pricing, and dense leisure routes. But after COVID-19, a failed Frontier deal, JetBlue’s $3.7 billion offer, and a blocked merger that left management in limbo for two years, the airline emerged with fewer options and less room for........

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