Soaring oil prices have left many Americans with higher costs and fewer options for travel amid the economic turmoil brought on by the war in Iran. Chelsea Blackmore, a 35-year-old photographer and travel agent from Massachusetts, saves up every year for an annual vacation with her mother. This year, they planned a Disney cruise from Orlando, booking the cheapest flights possible: a $500 round trip on Spirit Airlines.
However, last Saturday, Blackmore opened Spirit's app to find a pop-up message announcing the airline was shutting down operations and her flight was cancelled. "I cried for about five hours trying to search for new flights," she said. Travel experts warn that Spirit's demise is just a harbinger of the chaos higher energy prices will bring this summer.
Spirit Airlines Shutdown
Spirit Airlines abruptly ceased operations on 2 May, citing the shock of increased jet fuel prices as the death knell for the low-budget carrier. A company lawyer stated that higher fuel prices left the company, already struggling with other financial issues, with "no remaining way out." Before its shutdown, Spirit was in talks over a $500m deal with the White House, and other budget carriers like Frontier and Avelo sought a $2.5bn government assistance package, but no deals were made.
The loss of Spirit is expected to lead to higher ticket prices on dozens of routes due to reduced competition. "Even if you don't like Spirit, and even if you never flew on Spirit, if you were flying on routes that Spirit flew ... you benefited from their presence," said William McGee, a senior fellow for aviation and travel at the American Economic Liberties Project.
Impact on Travelers
Blackmore ended up spending $800 on two Southwest tickets that didn't include a checked bag. She considered driving to Florida but noted that would require more time off work. Some passengers are turning to alternative transportation. Flixbus, parent company of Greyhound, reported a more than 30% increase in passengers on 130 routes that mirror Spirit's and a 20% year-over-year increase in online search activity. Amtrak has also noticed an uptick in passengers.
Despite higher prices affecting transportation, dining, and accommodations, travel agents say demand for vacations remains high. Blackmore noted that most clients are determined to continue with their plans, often using credit cards to pay over time. "I mean, the world is crazy right now, and everybody deserves a vacation," she said.
Fuel Price Surge
US oil prices have jumped more than 30% since the closure of the Strait of Hormuz, where a fifth of the world's oil and gas typically passes through, at the start of the war. The national average gas price is $4.56 per gallon, over $1 more than last year, with some states exceeding $6 per gallon. Although Donald Trump has hinted at peace deals with Iran, experts warn it could take months or years to restore Gulf energy production even after the conflict ends.
Airlines reliant on jet fuel have been hit hard. While major carriers like United and Delta can cut routes and increase fees, budget airlines operate on thin margins. Lindsay Owens, executive director of Groundwork Collaborative, said, "Spirit is, in many ways, emblematic of what most Americans are feeling right now – which is a real gut punch around increasing energy costs and gas prices in particular."
Travel Trends
Intrepid Travel reported that demand remains "really strong" this summer. Leigh Barnes, president of the agency's Americas division, said travelers are looking harder at overall value, asking about fuel shortages, flight cancellations, and paid-in-full dates. Some are trimming costs by traveling for fewer days or choosing budget-friendly styles, but they are unwilling to compromise on the experience. Others are booking closer to departure, though McGee advised against that strategy, noting fares are likely to continue increasing.
