For some time now, people of modest means have enjoyed being able to travel cross-country to visit friends and family, or just to take a vacation somewhere new, thanks to the several low-cost airlines. One of those is - was - Spirit Airlines, but Spirit is now closing its doors, and its bankruptcy and failure are due in large part to government interference.
In 2024, Spirit Airlines, financially troubled since the COVID-19 pandemic and lockdowns, sought a lifeline through a merger with JetBlue Airways.
Although neither Spirit nor JetBlue could be considered major airlines, the Biden administration – in the midst of a “whole-of-government” anti-merger mania led by political appointees such as Federal Trade Commission Chair Lina Khan and Consumer Financial Protection Bureau Director Rohit Chopra – blocked the merger through a Department of Justice lawsuit. A federal court sided with the Biden DOJ in blocking the merger, and the airlines eventually scuttled their merger plan rather than footing the bill for a costly legal fight.
Note the principal culprit in this affair: The likely-unconstitutional Consumer Financial Protection Bureau, the brainchild of progressive (and economically illiterate) Senator Elizabeth Warren (D-MA).
Jessica Melugin, director of CEI’s Center for Technology & Innovation, blasted the blocking of the merger and warned that it could reduce competition in the airline industry. She stated in January 2024:
Blocking a merger of smaller competitors trying to combine resources and scale up to compete with the top four airlines makes little sense. It risks making both Spirit and JetBlue less able to compete with the ‘big guys’ and ultimately leaving the airline industry less competitive, harming consumers.
Now, that's precisely what has happened. The merger with JetBlue, which was blocked, may have saved the airline, and it's not at all clear where this leaves JetBlue, either, for that matter.
Spirit did appeal to the Trump administration for financial help, but some of the company's shareholders objected to the terms of the deal.
In recent weeks, the airline had been negotiating a $500 million lifeline from the Trump administration. Some of the investors that Spirit owed money to opposed the terms of the bailout, under which the government could have ended up owning 90 percent of Spirit, because it would have left them in a worse financial position if the airline eventually failed. Some Republican lawmakers were also opposed to a government bailout of Spirit.
This could have been averted by the government staying out of the merger.
Here's the thing about that: Markets usually get things right in the end. They can be messy, and in a free-trade system, there's a reason that the term "creative destruction" is in use. But when the government starts addling markets and industries with a long-handled spoon, which is what happened here, things rarely work out well. Now, lower-income travelers have fewer choices; they can drive, they can stay home, or they can spend a greater percentage of their disposable income on an air travel market that has fewer options.
That is what the CFPB and the FTC's actions have wrought.
On Saturday, Transportation Secretary Sean Duffy took to his official X account to announce some measures the department and other airlines are taking to help out travelers discomfited by the sudden shutdown of Spirit Airlines.
In coordination with our airline partners, we’re taking ACTION to bring relief to Spirit customers and its workforce.
— Secretary Sean Duffy (@SecDuffy) May 2, 2026
From capped ticket prices for flyers who need to rebook to employees looking for job opportunities, there’s a lot of information you should be aware of.…
The secretary summarizes the effort; read the original post for the full list:
In coordination with our airline partners, we’re taking ACTION to bring relief to Spirit customers and its workforce. From capped ticket prices for flyers who need to rebook to employees looking for job opportunities, there’s a lot of information you should be aware of.
We might point out, however, that were it not for the interference of the Biden administration in the JetBlue/Spirit merger, none of this would have been necessary.
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