Spirit Airlines shuts down, cancels all flights

[0:00] Spirit Airlines is going out of business. The airline said early this morning that it has [0:04] begun shutting down operations. It's also canceled all upcoming flights. This is what customers see [0:11] when they go to the Spirit website. The discount carrier says customer service is no longer [0:16] available. It's also advising passengers not to come to the airport and to rebook their travel [0:21] on different airlines. 17,000 workers are now out of a job. Passengers, they're scrambling to make [0:28] other travel arrangements. The final Spirit flight touchdown at Dallas-Fort Worth International just [0:33] after midnight. Air traffic controllers and other airline pilots, they were heard wishing the Spirit [0:39] pilots well as they made their final descent. Well, the soaring jet fuel costs, which have nearly [1:00] doubled since the start of the war with Iran, well, they derailed Spirit's plans to emerge from its [1:05] second bankruptcy. Spirit and the Trump administration also failed to come to a last-minute bailout deal [1:10] before the airline, for the airline, I should say, on Friday. CNN's Gloria Pasmino is live at LaGuardia [1:16] Airport, one of the Spirit hubs. Did people take the warning and not show up? What are you seeing? [1:27] Well, Victor, hopefully if you're one of the more than one million passengers whose flights are now [1:31] canceled, you know that you should be checking your email, checking your airline app, and not coming to [1:36] the airport. But despite that, we have run into at least two people in the past hour who came in here [1:42] thinking that they were going to be able to fly out. They told me that they simply had not checked [1:47] their email. They did not realize that their flights had been canceled. This is Terminal A in LaGuardia [1:52] Airport. It's a small terminal, but it is the Spirit Airlines hub at this airport, and I want to show you [1:59] what it looks like now. You see up in the board here, it tells you all of these flights that were scheduled [2:04] for today to fly, to arrive here, have been canceled. Now, the terminal right now is pretty empty, and if [2:13] you walk up to one of these check-in monitors, check-in boots, where you would have checked in if you [2:19] were flying today, it tells you what's going on. We read to inform you Spirit Airlines has seized [2:24] global operations, and perhaps most frustratingly, it says customer service is no longer available. [2:33] That's what passengers are going to have to be dealing with today and in the next few days as they [2:38] try to rebook themselves on different airlines. Some of the people I spoke to just a minute ago [2:43] told me that not only they did not realize that their flights were being canceled, they're not sure [2:48] what they're going to do next. Now, if you would have come into this airport for a flight that was [2:53] scheduled today, you would have walked right here to this departure gate, and I just want to show you [2:59] what it looks like, that it is completely shut down. There's no access, and then there are these [3:05] flyers everywhere just notifying people about the shutdown, telling them that essentially they are [3:12] not going to be going anywhere today, telling them about the airline shutdown and directing them [3:20] to other airlines. Now, let's talk about what's happened in the last few hours since we heard [3:27] from Spirit Airlines announcing that they would be ceasing operation. It happened in the early hours [3:32] of the morning after, like you said, they failed to get that $500 million bailout from the federal [3:39] government. In many ways, Spirit Airlines made history in the airline industry for the past 34 years. [3:46] They were considered sort of a maverick of the industry, right? They sold cheap tickets, but they charge [3:51] you for almost everything else, water, printing your boarding pass, bringing on your bag. That was the [3:57] model, and it was successful. At one point, Spirit Airlines was actually one of the fastest growing [4:02] airlines in the United States, but that all started to change, especially after the other major airlines [4:10] began to compete with them and provide some of those same options, including cheaper [4:16] tickets. Now, as you said in the beginning, Victor, the last sort of nail on the coffin for Spirit [4:22] Airlines in the past few months was, of course, the surging price of fuel. That was what made it [4:27] so difficult for them to stay afloat, and as we heard from Spirit Airlines overnight, they're now [4:33] seizing their operation. After 34 years in the industry, more than 17,000 people expected to lose [4:40] their jobs, and millions of passengers are likely to be stranded in the next few days. Victor? [4:46] Gloria Pasmino there at LaGuardia. A lot of people trying to get home. Thanks so much. [4:51] If you've booked a flight on Spirit, what do you do? All right, I spoke with aviation reporter for [4:55] the Points Guy last hour, and here's what he suggested to get a refund. [5:02] This morning, Spirit has put out a notice on its website and said that it will be automatically [5:06] processing refunds for canceled flights. Of course, though, you know, it's kind of a dicey situation [5:11] because you're talking about an airline that, you know, had major cash flow issues, [5:15] obviously, at the heart of what has happened here overnight. So, you know, if you don't get a [5:21] refund from Spirit, if you don't have any luck, we are suggesting right now that, you know, if you pay [5:26] with a credit card, go ahead and request a charge back with that credit card. Basically, tell your [5:30] credit card company that, you know, that you didn't receive the thing that you paid for, that thing [5:34] being a flight, of course, and, you know, there are some federal protections in place to ensure you get [5:38] that money back from your credit card company. In the short term, other airlines, talking to [5:44] Legion, United, Frontier, they've offered special fares for passengers left stranded. With me now is [5:49] aviation reporter for the Points Guy, Sean Cudahy. Sean, good morning to you. First, what happens to [5:56] those thousands of passengers who are waiting for a flight to get back home? Yeah, they're kind of out [6:04] of luck this morning, unfortunately. Now, the good news is that some of the other U.S. airlines have [6:09] said that they will cap fares, in some case, doing discounted fares on routes where they go head-to-head [6:14] with Spirit, or I guess where they did go head-to-head with Spirit. So, you know, there's going to be an [6:18] opportunity to rebook and not pay those exorbitant last-minute, you know, ticket prices. But, you know, [6:24] make no mistake, this is not good news across the industry for consumers. Yeah, certainly they won't [6:29] have to pay those walk-up fares, which are probably much higher than anything they would have found [6:34] online. What about the flight attendants and the pilots who are not back in their [6:39] home cities? Yeah, other airlines, a number of other airlines have said that they will basically [6:45] extend the privileges that they give to their employees to kind of move them around the country, [6:50] around the world. They will extend those to Spirit employees. So, if you've got flight attendants, [6:55] pilots that are in, you know, the wrong city, and certainly there's a lot of them at this hour with [6:58] the airline kind of abruptly shutting down overnight, they're going to open up seats, jump seats on their [7:03] planes to try to get them back to the right cities, you know, after the shutdown just a few hours ago [7:08] here. Obviously, this doesn't come out of nowhere, right? There was a talk a week ago about a potential [7:14] bailout. This is the second bankruptcy for Spirit Airlines. What will be the implications for the rest [7:23] of the industry and the flying public, and are we already seeing any of that? Yeah, I think that the [7:30] big concern is when it comes to airfare. You know, even if you're someone who, you know, [7:35] never flew Spirit, never stepped on one of its yellow planes, you know, you benefited from Spirit [7:39] because these ultra low cost carriers, they tend to put pressure on the big airlines to keep fares [7:45] in check. You know, we still have a couple of low cost airlines, you know, Frontier Airlines kind of [7:50] most notably, but, you know, the industry on, you know, that sector of the industry is definitely [7:55] smaller. And, you know, at a time when fuel prices are already putting huge upward pressure on [8:01] airfare. You know, we've seen, you know, 15, 20% spikes in airfare this summer. I think there's a [8:06] lot of concern, especially in markets where Spirit had a significant presence that that consumers [8:10] could be dealing with higher ticket prices, you know, kind of long term. And so for people who [8:15] were not waiting for a flight, but had a flight booked, do they get their money back? Spirit says [8:23] that they will. So this morning, Spirit has put out a notice on its website and said that it will be [8:27] automatically processing refunds for canceled flights. Of course, though, you know, it's kind [8:31] of a dicey situation because you're talking about an airline that, you know, had major cash flow [8:36] issues, obviously at the heart of what has happened here overnight. So, you know, if you don't get a [8:42] refund from Spirit, if you if you don't have any luck, we are suggesting right now that, you know, [8:47] if you pay with a credit card, go ahead and request a charge back with that credit card, basically tell [8:51] your credit card company that, you know, that you didn't receive the thing that you paid for that thing [8:55] being a flight, of course. And, you know, there are some federal protections in place to ensure [8:59] you get that money back from your credit card company. You know, I think that's sort of the [9:03] best bet at this point. A lot of travel insurance plans likely not going to cover insolvency [9:08] cancellations from an airline. So, you know, there are protections for consumers, but not as many as [9:14] there normally would be if your flight was canceled because of maintenance or something like that. [9:18] 14,000 Spirit employees, the rest are contractors of the 17,000. Are the shortages across the industry [9:30] significant enough where they can absorb some of these flight attendants, some of these pilots, [9:36] or are these people going to have to look for jobs in other industries? [9:41] Yeah, I think that kind of remains to be seen. You know, we have seen a number of airlines slow [9:45] hiring this year because of the sky-high jet fuel costs that they're dealing with. You know, it kind [9:50] of depends on what, you know, part of what role we're talking about. You know, certainly there is a [9:56] major need across the industry for more aircraft mechanics, highly specialized roles. I'm sure [10:00] that those, you know, there will be opportunities for those workers. And, you know, I think, you know, [10:06] it's a big industry, and I think that, you know, there will be opportunities. We've heard some [10:10] airlines say that they're going to give kind of preferential, you know, interviews to Spirit [10:14] candidates that were affected by this. But, you know, I do think that we are dealing with a, [10:19] unfortunately, a very difficult situation for these employees, you know, out of really no fault [10:24] of their own that they've come into this situation. Take a listen to some of the frustrated passengers [10:28] we encountered this morning. I just got here, and the people that were standing here just said, [10:34] there's no flight, spare one out of business. So you're going to Orlando, and you get here this [10:41] morning, and? I found it odd. I did. I saw the notices, didn't really think water, walked right [10:48] by them. And I went to the kiosk, and I typed in my information, and they're like, oh, yeah, [10:52] your flight has been canceled. Find an agent. So I was looking for an agent. They were like, [10:56] there's no agent. There's no customer service.