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Soaring oil prices are raising travel costs for many Americans and narrowing options for summer trips as the Iran war continues to disrupt energy markets. Chelsea Blackmore, who saves each year for an annual vacation with her mother, planned a Disney cruise from Orlando and bought the least expensive round-trip fare she could find: $500 on Spirit Airlines.
But last Saturday, after opening Spirit’s app, she saw a pop-up message saying the airline was shutting down operations and her flight was cancelled. “I cried for about five hours trying to search for new flights,” said Blackmore, 35, a photographer and travel agent based in Massachusetts.
Travel experts said Spirit’s collapse reflects the broader strain that higher energy prices are expected to bring this summer. “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,” said Lindsay Owens, executive director of Groundwork Collaborative, a left-leaning economic thinktank. “We’re all Spirit Airlines, when it comes to feeling really distressed and worried about high gas prices.”
U.S. oil prices have jumped more than 30% since the start of the war, when the Strait of Hormuz—through which a fifth of the world’s oil and gas products typically pass—was closed. Gas prices have followed: the national average is $4.56 a gallon, more than $1 a gallon higher than last year, and in some states averages have surpassed $6 a gallon.
Even if the conflict ends, experts warned it could take months or years to restore Gulf energy production fully. Airlines, which rely on heavy jet fuel, have been hit particularly hard. While major carriers such as United and Delta can cut routes and increase fees to offset costs, budget airlines operate on thin margins that are more vulnerable to fuel price spikes.
Before its shutdown, Spirit was reportedly in talks over a $500 million deal with the White House. Trump also floated the idea of the government buying out the airline, and other struggling budget carriers—including Frontier and Avelo—asked the administration to consider a $2.5 billion government assistance package to help the low-cost industry manage rising prices. No deals were made, and Spirit abruptly ceased operations on 2 May.
In the wake of the closure, Spirit cited the shock of increased jet fuel prices as a key factor. A company lawyer said higher fuel prices left the airline, already facing other financial issues, with “no remaining way out”.
Industry experts said the effects of Spirit’s shutdown are expected to last beyond the latest oil shock. The loss of Spirit is expected to reduce competition on dozens of routes, potentially leading to higher ticket prices.
“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.
Blackmore said that when she rebooked on the next cheapest option, she ended up spending $800 on a pair of Southwest tickets. Unlike her original Spirit tickets, the Southwest fare did not include a checked bag.
Some passengers are also turning to alternate transportation. Flixbus, the parent company of Greyhound, said it has seen a more than 30% increase in passengers across 130 routes that mirror Spirit’s, along with a 20% year-over-year increase in online search activity. Amtrak said it is too early to isolate the impact of rising gas prices on rail demand, but it has noticed an uptick in passengers.
Despite higher prices affecting travel broadly—including transportation, dining, and accommodations—travel agents said vacation demand remains strong. One of Blackmore’s clients postponed a summer trip to next year, but she said most travelers are determined to continue in some form, including by putting charges on credit cards and paying over time.
“I mean, the world is crazy right now, and everybody deserves a vacation,” Blackmore said. “So to put it on a credit card, it’s out of sight, out of mind.”
Intrepid Travel reported that demand was still “really strong” this summer. Leigh Barnes, president of the agency’s Americas division, said Americans are adjusting how and why they travel. “We’re seeing travelers look harder at overall value – asking a lot more hypothetical questions around fuel shortage impacts, future flight cancellations, wanting to know paid-in-full dates, ‘just in case’,” Barnes said.
He added that while some travelers are trimming costs by taking fewer days or choosing more budget-friendly trip styles, they are “still unwilling to compromise on the actual experience”.
Some travelers are also booking closer to departure, waiting longer to lock in plans. However, McGee advised against that approach, saying fares are likely to keep rising. “It seems apparent that fares, which are already increasing, are going to continue to increase,” he said. “And I think it’s anybody’s guess when that will stop.”
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