May 4, 2026 Airlines shut down as kerosene prices soar
The escalating conflict between Israel, the USA, and Iran has triggered a sharp rise in kerosene prices, leading to the collapse of several airlines and severe financial strain across the aviation industry.
Airlines Grounded by Fuel Costs
Spirit Airlines has ceased operations entirely, unable to secure financing amid skyrocketing fuel expenses. The ultra-low-cost carrier, which had not hedged its fuel prices, faced insurmountable financial pressure as crude oil prices surged from $85-90 to $150-200 per barrel. A proposed $500 million rescue package from the Trump administration failed to materialize, leaving the airline with no lifeline. The shutdown has left approximately 17,000 employees without jobs.
Similarly, Ascend Airways has withdrawn from the air transport market, citing unsustainable fuel costs and geopolitical instability. The airline’s exit further tightens capacity in an industry already grappling with reduced fleets and operational cutbacks.