Category: Business

(NEW YORK) — The Department of Transportation said on Saturday the majority of airlines will be capping tickets prices for Spirit Airlines travelers who need to rebook their canceled flights.

Some carriers have even reduced fares on high volume routes where Spirit used to operate.

Spirit began winding down operations early Saturday morning after talks between the airline and the federal government over a $500 million rescue deal stalled.

Spirit said that travelers who booked their tickets with a credit or debit card will be automatically refunded.

United, Delta, JetBlue and Southwest said they are capping ticket prices specifically for Spirit customers who need to rebook cancelled flights.

To access these special prices, individuals will need to provide at least a Spirit flight confirmation number and proof of payment, the airlines said.

These fares will only be available for a short period:

JetBlue: Available for 72 hours
Southwest: Available for 72 hours; only in person at an airport ticket counter
Delta: Available for five days
United: Available for two weeks online 
American Airlines and Delta Air Lines are offering reduced fares on high-volume Spirit routes.

United Airlines said for the next two weeks, customers who were booked on Spirit can get one-way tickets on United flights from most cities where Spirit previously operated, including Atlanta, Chicago, Fort Lauderdale, Houston, Las Vegas, Miami, Newark, New Orleans and Orlando.

The airline said it has capped most of its fares at $199, though exceptions apply with longer flights not priced higher than $299.

Travelers will need to enter their Spirit confirmation number and verify they were scheduled to travel between May 2 through May 16 in order to be qualify for these special fares.

American Airlines said it has also launched a page on its website that displays rescue fares to and from a range of domestic and international destinations for Spirit customers needing to rebook travel.

The airline said it’s also reviewing adding additional capacity, including flying bigger planes and adding more flights on routes Spirit used to fly, to accommodate as many passengers as possible.

Allegiant Air has also committed to freezing fare prices across routes that overlap with Spirit. To support impacted travelers, Frontier Airlines is offering up to 50% off base fares across its network until May 10.

To help Spirit employees, the Department of Transportation said most major U.S. carriers are extending travel pass benefits and spare jump seats so employees can return to their homebases.

Airlines are also offering Spirit team members preferential employment interviews to ensure they jump the queue. American and United said they’re creating microsites for Spirit employees looking to continue a career in aviation, per the federal agency. 

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(WASHINGTON) — President Donald Trump said an announcement was expected Friday on Spirit Airlines, amid a report that the airline was preparing to cease operations after a $500 million rescue deal fell apart.

The Wall Street Journal first reported that the airline is preparing to shut down operations.

When asked if the administration had decided against bailing out Spirit Airlines, Trump told reporters on Friday, “I guess we’re looking at it. If we could do it, we do it, but only if it’s a good deal.”

“No institution’s been able to do it,” he continued. “I said ‘I’d like to save the jobs,’ but we’ll have an announcement sometime today. We gave them, we gave them a final proposal.”

ABC News has reached out to the White House for additional comment.

A spokesperson for Spirit Airlines declined to comment on ongoing discussions as it related to the WSJ report.

“Spirit is operating as usual,” the spokesperson said in a statement. 

The Florida-based carrier is currently operating with over 40 flights in the air, according to FlightRadar24 data. 

Other airlines have responded to the news saying they will be ready to help stranded passengers in the event that Spirit shuts down. 

American Airlines told ABC News it will offer fare caps on main cabin tickets for routes they share with Spirit. 

Similarly, United Airlines said they’re “preparing to support Spirit customers in the event of a shut down.”

“We are ready to support customers who may be impacted if Spirit Airlines ceases operations, with a focus on helping people continue their travel plans with low-fare options,” Frontier Airlines posted Friday on X.

ABC News previously reported that Spirit could run out of the cash it needs to keep operating within days, not weeks, according to sources familiar with the matter. 

Spirit filed for bankruptcy for the second time last August — having previously filed for Chapter 11 bankruptcy protection in November 2024 — to restructure financially and “reduce its cost structure,” with hopes of emerging from Chapter 11 by the spring or summer of 2026.

The soaring price of jet fuel amid the ongoing war in Iran has had widespread impact on airlines and travel expert Katy Nastro, of airfare monitoring site Going, previously told ABC News that Spirit could be out of time to try and turn things around.

“It’s never a good sign to file bankruptcy to begin with, but a second within six months, even worse,” Nastro said. “Spirit suggested that they were going to be able to come out of bankruptcy this time by the spring. We’re in the spring now, we have higher jet fuel prices — this is a recipe for disaster for them.”

 

What travelers need to know about Spirit Airlines shutting down

Bradley Akubuiro, a crisis expert and former Boeing spokesperson, told ABC News that losing a budget airline like Spirit will raise the floor on airfares.

“Frontier, Allegiant, and Breeze are still flying, but Spirit was the biggest, and in the markets it dominated — Fort Lauderdale, Orlando, a lot of the Caribbean — there isn’t another carrier ready to backfill at the same price tomorrow,” he explained. “The pain isn’t immediate. It’s structural. A fare that used to be $89 is $140 six months from now, and most consumers won’t connect the two.”

When airlines liquidate, they immediately cease operations without notice, which means that passengers will be stranded and employees will not show up to work. 

There is generally no airline assistance when it comes to helping stranded passengers after an airline shuts down operations. 

For any ticketed passengers scheduled to fly Spirit or already in the middle of their trip, below are some tips from travel experts on how to navigate the situation.

Don’t immediately cancel your flight, Nastro advised, adding that travelers who cancel forfeit their right to a refund. And make sure to keep all records and receipts.

If you booked with a credit card, you can dispute the charge with your credit card company and likely get the money back.  

There is less protection if you booked with a debit card, but you can still contact your company to see if you can get reimbursed. 

If you have travel insurance, she reminded customers to read the fine print as not all of them cover this type of scenario. 

Per the Department of Transportation, customers could consider filing a proof of claim in the bankruptcy proceeding to try and get a partial refund, but the claim will be considered along with all the other creditors that the airline owes money to and you may only get a small portion of your money back.

If you’re stranded, check options with other airlines that might be able to offer relief flights, fare caps or emergency fares, like they would do after a big weather event.

This is a developing story, check back for updates.

Copyright © 2026, ABC Audio. All rights reserved.

(WASHINGTON) — President Donald Trump said an announcement was expected Friday on Spirit Airlines, amid a report that the airline was preparing to cease operations after a $500 million rescue deal fell apart.

The Wall Street Journal first reported that the airline is preparing to shut down operations.

When asked if the administration had decided against bailing out Spirit Airlines, Trump told reporters on Friday, “I guess we’re looking at it. If we could do it, we do it, but only if it’s a good deal.”

“No institution’s been able to do it,” he continued. “I said ‘I’d like to save the jobs,’ but we’ll have an announcement sometime today. We gave them, we gave them a final proposal.”

This is a developing story, check back for updates.

Copyright © 2026, ABC Audio. All rights reserved.

(NEW YORK) — The United States economy grew at a solid pace over the first three months of 2026, rebounding from sluggish performance at the end of last year, a government report on Thursday showed.

The economy grew at an annualized rate of 2% in the first quarter, marking an acceleration from 0.5% growth recorded in the previous quarter. The performance came in slightly below economists’ expectations.

The fresh data covers a period mostly before the outset of the Iran war on Feb. 28, which sent gasoline prices surging and prompted warnings of a possible recession.

The jump in economic output over the first quarter owes to a rise in government spending, exports and investment, the U.S. Commerce Department said.

Consumer spending slowed down from the previous quarter, however, providing a cautionary note for the nation’s outlook. Consumer spending accounts for about two-thirds of U.S. economic activity.

Households, meanwhile, are weathering a surge in prices as a result of an oil shock set off by the Iran war.

The Personal Consumption Expenditures Price Index, a measure of inflation preferred by the Federal Reserve, increased 3.5% in March, the report showed. That reading marked a jump from a 2.8% rate in the previous month.

The Middle East conflict prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the global supply of oil and natural gas.

The average price of a gallon of gas stands at $4.30 as of Thursday, hitting the highest level in four years.

The Federal Reserve held interest rates steady on Wednesday, in part due to the recent rise in costs. The benchmark rate stands at a level between 3.5% and 3.75%.

The solid economic performance at the outset of this year may allow the Fed to keep interest rates elevated for longer as it seeks to avert a prolonged rise in prices amid the Iran war.

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(WASHINGTON) — A Senate committee on Wednesday voted to advance Fed chair nominee Kevin Warsh, clearing a key hurdle in his path to replace Fed Chair Jerome Powell before his term ends next month. Warsh’s nomination will move to a confirmation vote on the floor of the upper chamber.

The Senate Banking Committee voted 13-11 to approve the nomination on a party-line vote, with Republicans supporting the nomination and Democrats opposing it.

The vote comes days after the Department of Justice moved to drop its criminal probe into Powell. Before that, Warsh had faced a bipartisan stonewall in the Senate Banking Committee over the probe.

Sen. Thom Tillis, R-N.C., who previously vowed to oppose Warsh’s nomination on account of the investigation, said he would flip his vote after the investigation was set aside. Tillis voted to approve the nomination on Wednesday.

The probe into Powell focuses on alleged false testimony to Congress about an office renovation. Powell, who was appointed by Trump in 2017, has rebuked the investigation as a politically motivated effort to influence interest-rate policy.

Powell’s term as Fed chair ends on May 15, but he said last month he would stay in the position until Warsh is confirmed.

Warsh, a former Fed official, is currently a fellow at a conservative think tank called the Hoover Institution, which is based at Stanford University.

At testimony before the Senate Banking Committee last week, Democrats sharply criticized Warsh, saying the independence of the Fed would be at risk if Warsh were to take policy cues from Trump.

In his opening remarks, Warsh voiced support for the independence of the Fed in its role setting interest rates. He used the term “monetary policy” to describe the central bank’s task of adjusting benchmark borrowing costs.

“Monetary policy independence is essential. Monetary policymakers must act in the nation’s interest,” Warsh said.

Still, Warsh defended the right of public officials, including presidents, to voice their views on interest-rate policy, saying such comments do not infringe on Fed independence.

“Central bankers must be strong enough to listen to a diversity of views from all corners,” Warsh said.

Sen. Elizabeth Warren, D-Mass., the top Democrat on the committee, responded directly to Warsh’s defense of a president’s right to criticize the Fed, saying the federal investigation of Powell amounts to a pressure campaign that extends beyond public criticism of Fed policies.

“You said it’s perfectly fine for elected officials to state their views on interest rates. But that’s not what Donald Trump is doing,” Warren said, addressing Warsh.

Republicans, including Sen. Tim Scott, R-S.C., the chairman of the Senate Banking Committee, praised Warsh, saying the Fed nominee would focus central bank policy on economic stewardship. During the tenure of President Joe Biden, Scott claimed, the Fed shifted some of its attention to the implications of issues like climate change.

“An independent Federal Reserve is essential to achieving its mission. That independence must be protected,” Scott said.

During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.

In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.

The Senate committee vote came hours before the Fed is set to announce its latest decision on the level of interest rates. The central bank is widely expected to hold interest rates steady.

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(NEW YORK) — The Federal Reserve on Wednesday will issue its latest announcement on interest rates as gasoline prices in the U.S. reach their highest level in four years. The move marks what may be the central bank’s final decision on borrowing costs under the leadership of Fed Chair Jerome Powell.

The policy announcement is set to arrive at an uneasy moment for the central bank. The Iran war set off a rapid acceleration of price increases, posing a challenge for policymakers bedeviled by elevated inflation and sluggish hiring.

Investors overwhelmingly expect the Fed to leave rates unchanged on Wednesday, according to the CME FedWatch Tool, a measure of market sentiment.

A standoff between the White House and Congress, meanwhile, has cast doubt over succession plans for Powell as his term comes to a close next month.

President Donald Trump’s nominee to lead the Fed, Kevin Warsh, has faced a bipartisan stonewall in the Senate Banking Committee over a federal criminal investigation into Powell.

The Department of Justice moved to drop the probe last week, paving the way for Warsh to advance in a committee vote. If his nomination advances, Warsh would face a confirmation vote on the Senate floor.

The investigation into Powell focuses on alleged false testimony to Congress about an office renovation. Powell, who was appointed by Trump in 2017, has rebuked the probe as a politically motivated effort to influence interest-rate policy.

Powell’s term as Fed chair ends on May 15, but he said last month he would stay in the position until Warsh is confirmed.

Even after his successor is confirmed, Powell could remain on the Fed’s 12-member policymaking board until 2028, retaining a role in the central bank’s interest-rate policy. Powell has not indicated whether he intends to remain on the board.

Elevated price increases have coincided with a slowdown of economic growth, threatening to intensify an economic double-whammy known as “stagflation,” which poses difficulty for the Fed.

If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but raises the likelihood of a cooldown in economic performance.

The Fed held interest rates steady last month at its first meeting since the U.S.-Israeli war with Iran drove up gasoline prices and risked a wider bout of inflation.

The central bank’s move marked the second consecutive time it has opted to maintain interest rates at current levels since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

Warsh, a former Fed official, is currently a fellow at a conservative think tank called the Hoover Institution, which is based at Stanford University.

During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.

In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.

Markets peg a roughly 80% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.

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(NEW YORK) — Gasoline prices in the United States hit their highest level in four years on Tuesday as negotiations over the Iran war appeared to show little signs of a resolution.

This is a developing story. Please check back for updates.

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(OAKLAND, Calif.) — Billionaire entrepreneur Elon Musk and prominent AI executive Sam Altman are facing off in court with major implications for OpenAI, the San Francisco-based tech giant led by Altman.

The federal case, which concerns OpenAI’s evolution from nonprofit to profit-seeking, kicked off on Monday in Oakland, California. Judge Yvonne Gonzalez Rogers is managing proceedings alongside nine jurors and no alternates, according to a court filing last month.

The star-studded list of potential witnesses includes Altman, Musk and Microsoft CEO Satya Nadella, among other tech luminaries, a court filing showed.

Musk sued OpenAI and Altman, its CEO, in 2024, alleging that the company abandoned its mission of benefiting humanity in a sprint toward profits.

Musk, a co-founder of OpenAI, said he reached an agreement with the company’s leaders on the nonprofit course of the firm when it launched in 2015. The company later breached that “Founding Agreement,” Musk said in a 2024 court filing, when it made ChatGPT-4 available for use by Microsoft — the tech giant got access to the then-most powerful version of its popular chatbot under an exclusive licensing agreement.

Microsoft and OpenAI have renegotiated the exclusive licensing agreement, allowing OpenAI to strike deals with other tech firms.

OpenAI has rebuked the charges, calling them “baseless.” Microsoft has also denied any wrongdoing. Musk, the world’s richest person, counts $839 billion in wealth, according to Forbes. He is seeking $150 billion in damages from the tech companies.

OpenAI, which is not publicly traded, valued itself at $852 billion after a round of funding in March. Microsoft’s value — as measured by market capitalization — stands at about $3.1 trillion.

After jury selection, the case will take place in two sections, Gonzalez Rogers said in a court filing. An initial phase will focus on liability to determine whether any of the defendants committed illegal acts. A subsequent remedies portion will assess potential damages.

Musk and the OpenAI defendants will each be afforded 22 hours to present their case during the liability phase, Gonzalez Rogers said in a court filing earlier this month. Microsoft, also a defendant, will be given five hours for its case.

Musk will plead two claims against OpenAI: unjust enrichment and breach of charitable trust, according to a legal filing last week.

“OpenAI, Inc. has been transformed into a closed-source de facto subsidiary of the largest technology company in the world: Microsoft,” Musk said in the lawsuit.

Typically, deals established between a top investor and company leadership are set out in writing with concrete terms, some experts previously told ABC News, leaving Musk in a difficult position as he attempts to invoke what they say appear to be spoken commitments made years ago without a formal contract.

For his part, Musk says in the lawsuit that the agreement was memorialized in a legal filing when OpenAI was incorporated.

In the lawsuit, Musk alleges that Altman and OpenAI President Greg Brockman reaffirmed the founding agreement in written messages over the ensuing years.

“[I] remain enthusiastic about the non-profit structure!” Altman wrote to Musk in 2017, according to the lawsuit.

Musk, who helped bankroll OpenAI, launched a rival AI company in 2023 called xAI, which built a chatbot that competes with ChatGPT.

Acknowledging his previous criticism of the pace and ambitions of AI development, Musk said in a conference call on X in July 2023 that he entered the industry reluctantly.

In the lawsuit, Musk alleges breach of contract, breach of fiduciary duty and unfair business practices.

Musk is seeking a legal order that requires OpenAI to abide by its alleged founding mission of aiding humanity and retaining its nonprofit form, as well as compensation for the funds received by OpenAI while it carried out allegedly unfair business practices.

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(NEW YORK) — The United Arab Emirates on Tuesday said it would leave the Organization of the Petroleum Exporting Countries (OPEC) next month.

This is a developing story. Please check back for updates.

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(NEW YORK) — General Motors said on Monday it expects to receive $500 million in refunds from tariffs that were ruled illegal by the Supreme Court.

The automaker is now boosting its full-year profit forecast by $500 million, GM CEO Mary Barra said in a letter to shareholders as the company announced its Q1 results. Barra also cited strong sales of its full-size pickup trucks, despite rising gas prices. 

The federal government opened last week its refund portal to allow companies to apply to get tariff money back. The Supreme Court ruled in February that the International Emergency Economic Powers Act did not give President Donald Trump the power to unilaterally impose tariffs.

GM is one of more than 330,000 importers who paid the IEEPA tariffs that were invalidated, totaling $166 billion.

The IEEPA tariffs alone cost the typical American household $700 last year, according to the nonpartisan Tax Foundation.

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