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Spirit Joins Corporate Air, PLAY, Braathens, Voepass, Azul Airlines Filed for Bankruptcy Last Year, New Update is Here
In a devastating turn for the airline industry, Spirit Airlines now joins Corporate Air, PLAY Airlines, Braathens International Airways, Voepass, and Azul Airlines in the growing list of carriers that filed for bankruptcy in the past year. This shocking series of airline bankruptcies has sent ripples through the US tourism sector, leaving travelers facing fewer options and rising ticket prices. Spirit Airlines, one of the largest ultra-low-cost carriers in the US, has been forced to restructure under Chapter 11, following a year of intense financial pressure. But Spirit is not alone. Corporate Air, a regional carrier, PLAY Airlines, operating between the US and Europe, and even the Brazilian giants Voepass and Azul Airlines have all succumbed to the harsh realities of the aviation industry.
These bankruptcies, particularly Spirit Airlines‘ filing, highlight the ongoing struggles within the US tourism sector, which is now witnessing a massive shake-up. Corporate Air, PLAY, and others, once key players in their respective regions, have had to cease operations, leading to fewer affordable flight options for US travelers. As these airlines join forces in their financial turmoil, it is clear that the US tourism industry faces a new wave of challenges. Don’t miss this crucial update as we dive into the latest impacts of these bankruptcies on the US tourism sector and beyond.
| Airline | Country/Region | Bankruptcy Type | Filing / Cessation |
|---|---|---|---|
| Spirit Airlines | United States | Chapter 11 restructuring (second filing) | Aug 29, 2025 |
| Corporate Air | United States | Chapter 11 restructuring | Sep 2025 |
| PLAY Airlines | Iceland | Insolvency / operational shutdown | Sep 2025 |
| Braathens International | Sweden | Bankruptcy, ceased operations | Sep 2025 |
| Voepass | Brazil | Judicial restructuring | Early 2025 |
| Azul Linhas Aéreas | Brazil | Chapter 11 protection (US filing) | May 2025 |
| Ravn Alaska | United States | Chapter 11 (parent company) | Jan 26, 2026 (related to 2025 cessation) |
The airline industry in the US and across the Americas is in free fall. Major players have crumbled under the weight of crushing financial burdens. These airline bankruptcies, including some of the most well-known names in US travel, have sent shockwaves through the US tourism sector. With the US being a major global hub for travel, these closures could reshape the future of US tourism. As travel routes vanish, passengers are left in the lurch. How did we get here? What will the US tourism sector do next? The unfolding crisis is far from over.
The Rise and Fall of Spirit Airlines: A US Tourism Nightmare
Spirit Airlines, once the dominant ultra-low-cost carrier in the US, has now entered Chapter 11 bankruptcy for the second time in a year. The news hit the US tourism sector like a bombshell. With mounting debt, intense competition, and poor management decisions, Spirit couldn’t maintain its foothold in the industry. The US travel market had already been volatile, but this latest bankruptcy highlights just how fragile the industry truly is. Spirit’s financial troubles stemmed from failed merger talks and the inability to keep its operations profitable during tough times.
In fact, Spirit Airlines’ downfall is a stark warning for the entire US tourism sector. With so many companies struggling to stay afloat, how much longer can the US tourism sector continue to thrive? The collapse of such a large carrier has already disrupted US travel—fewer flights, higher fares, and a massive reduction in domestic travel options. Airlines like Spirit are supposed to be the backbone of budget-conscious US travelers, but now they too are crumbling under financial pressure.
Spirit Airlines has been one of the most significant players in the US travel sector. Known for its ultra-low-cost business model, Spirit was a major budget-friendly airline catering to both domestic and international US travelers. However, in 2025, Spirit filed for Chapter 11 bankruptcy protection for the second time, marking a significant turning point for the airline.
The first filing came in 2025, as the airline was unable to manage its mounting operational costs and losses in revenue. These pressures led to Spirit’s decision to restructure and attempt to regain its footing in a highly competitive market. Unfortunately, the airline’s struggles continued throughout 2025 and into 2026, leading to additional operational and financial strain.
A major factor contributing to Spirit’s continued financial difficulties is its loss of a key co-branded credit card partnership with Mercury Financial, effective from March 2026. Credit card partnerships are a crucial revenue stream for low-cost airlines like Spirit, as they contribute significantly to the airline’s income, particularly through loyalty programmes and passenger spending. Losing this partnership further tightens Spirit’s liquidity, exacerbating its ability to recover.
Additionally, Spirit Airlines is downsizing its fleet by selling several Airbus A320 and A321 aircraft, which has led to a reduction in the number of routes and flights available to passengers. This downsizing directly impacts US tourism, as Spirit was a major low-cost option for travelers heading to domestic and international destinations. The airline’s struggles reflect the overall weakness of the US airline industry, highlighting the growing challenges for budget-conscious US travelers.
Corporate Air’s Quick Downfall: Another Blow to US Travel
Corporate Air, a small US carrier that primarily served regional markets, filed for bankruptcy in September 2025. The airline’s insolvency, which stemmed from a shrinking fleet and unsustainable debt, shocked passengers who depended on the carrier for their flights. With an operating fleet reduced to just three aircraft, Corporate Air’s bankruptcy filing was inevitable. This incident proves that even the most niche airlines in the US tourism sector are not immune to the financial pressures plaguing the industry.
If these regional carriers continue to collapse, the US tourism sector could face massive disruptions. US travelers, especially in underserved regions, will find themselves without affordable flight options. This will further strain the already stressed US travel market, and the effects will ripple through US tourism, affecting everything from business travel to leisure tourism.
While Spirit Airlines’ bankruptcy is one of the most significant, Corporate Air, a regional carrier based in the United States, has also been hit hard by the financial pressures facing the industry. Corporate Air filed for Chapter 11 bankruptcy protection in September 2025, following years of struggling to maintain a profitable fleet. The airline was a significant player in regional markets, offering domestic flights between small and medium-sized cities in the US. However, as competition increased and fuel prices rose, Corporate Air found it difficult to operate profitably.
Corporate Air’s bankruptcy filing further disrupts US tourism by reducing regional flight options. Regional carriers like Corporate Air are often the lifeline for travelers in underserved parts of the country, providing crucial connections between smaller cities and major hubs. With Corporate Air now in bankruptcy, passengers in these regions will find it more difficult and expensive to travel, creating a gap in the market that will likely be filled by larger carriers with higher fares and more limited availability.
PLAY Airlines Crashes in Iceland: The Global Ripple Effect on US Tourism
Icelandic low-cost carrier PLAY Airlines was supposed to be the savior of the budget travel market, but in September 2025, it collapsed under financial strain. PLAY Airlines, once poised to expand its US routes, is now just another bankruptcy casualty in the US tourism sector. This news is devastating for US travelers hoping to snag cheap flights to Iceland and beyond. With the airline now shuttered, US-based tourists will have fewer choices when it comes to European connections, especially in the budget travel segment.
The bankruptcy of PLAY Airlines is a global wake-up call for the US tourism industry. If smaller carriers continue to fall, travelers will face higher ticket prices and reduced options. The US tourism sector’s reliance on international carriers is a looming issue, and this collapse only highlights the urgent need for reform within the industry.
The collapse of PLAY Airlines directly affects US tourists heading to Iceland and Europe, as the airline provided affordable options for flights between the US East Coast and Reykjavik. Without PLAY, US tourists heading to Iceland and other European destinations now have fewer affordable options, likely pushing them to rely on more expensive carriers.
Additionally, PLAY Airlines’ closure affects the broader US tourism sector, as it was one of the most prominent carriers serving a vital international route between the US and Europe. US travelers now have fewer low-cost choices for traveling internationally, which may contribute to higher airfare prices across the US-Europe corridor.
Brazil’s Voepass and Azul: The US Tourism Market Faces a Double Whammy
In Brazil, Voepass Airlines filed for judicial restructuring in early 2025, while Azul Linhas Aéreas filed for Chapter 11 bankruptcy protection in the US. Both of these Brazilian airlines had key operations serving the US tourism sector, with Azul having significant international routes. The financial turmoil in Brazil’s aviation market is spilling over into US tourism. Passengers who once relied on affordable Brazilian carriers for US-bound flights are now facing reduced routes and higher airfares.
Azul’s Chapter 11 filing in the US sends shockwaves through US tourism. With a large portion of its revenue tied to US routes, this bankruptcy threatens the stability of the US tourism sector. If major airlines like Azul can’t stay afloat, what hope do smaller US carriers have?
Brazil has also seen its share of airline bankruptcies and financial restructurings. Voepass Linhas Aéreas, a regional carrier in Brazil, filed for judicial restructuring in early 2025. Similarly, Azul Linhas Aéreas, one of Brazil’s largest carriers, filed for Chapter 11 bankruptcy protection in the United States in May 2025.
Both airlines were crucial players in US tourism, particularly for Brazilian tourists traveling to the US. Azul, in particular, operated numerous international routes from Brazil to the US, providing affordable options for Brazilian travelers heading to cities like New York, Miami, and Orlando. The financial difficulties faced by Azul and Voepass are likely to reduce the number of flight options available for Brazilian travelers to the US, increasing competition for seats and raising airfares in the process.
The collapse of these Brazilian carriers further highlights the vulnerability of international airlines to economic downturns and financial pressures, which are being exacerbated by rising fuel costs and tightening travel regulations. For US tourism, the loss of these carriers’ routes can disrupt the steady flow of Brazilian tourists—a significant market for the US tourism sector.
| Airline | Country/Region | Bankruptcy Status | Filing/Closure Date | Impact on US Tourism | Additional Notes |
|---|---|---|---|---|---|
| Spirit Airlines | United States | Chapter 11 (Second Filing) | August 2025 | Major disruptions, flight cancellations, higher fares, fewer options for budget-conscious US travelers. | Loss of co-branded credit card partner; downsizing fleet and staff as part of restructuring. |
| Corporate Air | United States | Chapter 11 (Restructuring) | September 2025 | Reduced regional flight options in the US, limited impact on long-haul services, mainly affects regional US tourism. | Struggling to maintain fleet, bankruptcy triggered by operational and financial mismanagement. |
| PLAY Airlines | Iceland | Insolvency / Operational Cessation | September 2025 | Reduced connections between Iceland and the US; fewer low-cost options for US tourists heading to Europe. | Directly impacted US tourism to Iceland and Europe, operational closure affecting European budget travel. |
| Voepass Linhas Aéreas | Brazil | Judicial Restructuring (Brazil) | Early 2025 | Limited international routes to the US, affecting Brazilian tourism to the US. | Affected by contract disputes and operational challenges with regional partners. |
| Azul Linhas Aéreas | Brazil | Chapter 11 (US Filing) | May 2025 | Major cuts to US-bound routes from Brazil, reduced options for Brazilian travelers to the US. | Struggling with debt; restructuring in the US to protect international operations. |
| Ravn Alaska | United States | Chapter 11 (Parent Company) | January 2026 (related to 2025) | Direct impact on regional US tourism, especially in Alaska. Limited regional flights and service disruptions. | Operational shutdown in Alaska due to financial pressures. |
| Lufthansa (Europe) | Germany | Strike-induced cancellations and operational disruption | February 2026 | Increased cancellations affecting US-bound flights; operational disruptions impacting US tourism via European hubs. | Pilots and cabin crew strikes disrupting flights, affecting American and European routes. |
| Southwest Airlines | United States | No bankruptcy but financial restructuring | Ongoing (2025 into 2026) | Financial restructuring focused on strengthening its position in the US tourism sector, aiming to stabilize operations. | Strong outlook with increasing capa |
Ravn Alaska’s Struggles: US Regional Travel on the Brink
Ravn Alaska, once a major regional carrier in the US, filed for bankruptcy in January 2026, just months after its parent company entered bankruptcy proceedings in 2025. The airline’s collapse severely impacts regional US tourism, especially in Alaska and other underserved areas. With fewer flights, passengers will find themselves scrambling for alternative travel options in the rugged US tourism market.
Ravn’s collapse is a clear indication of how fragile US regional carriers are in today’s economic climate. If regional carriers cannot stay afloat, US travelers will face fewer options, longer travel times, and higher costs—all of which could stifle the US tourism sector. The implications of Ravn’s downfall will be felt across the country, especially in remote regions where the airline was one of the only viable carriers.
The Alaska-based regional carrier, Ravn Alaska, filed for bankruptcy in early 2026 following months of operational difficulties and growing financial strain. Regional airlines like Ravn are crucial to the US tourism sector, especially in remote areas such as Alaska, where air travel is the primary mode of transportation. Ravn’s bankruptcy disrupts US regional tourism, particularly for travelers looking to explore Alaska or other remote US destinations.
Ravn Alaska’s financial challenges highlight the broader issue facing smaller US carriers, which struggle to compete with larger, more established airlines. With fewer regional options available, US tourism will face higher costs and limited availability in some of the most beautiful, yet underserved regions of the country. This situation exacerbates the overall US tourism crisis, with many tourists looking for more budget-friendly options in regional markets now left stranded.
How the US Tourism Sector Could Collapse Under Airline Bankruptcy Pressure
The wave of airline bankruptcies in 2025 presents a dire situation for the US tourism sector. As major US airlines, regional carriers, and international partners fall apart, US travelers are left to bear the brunt. The US tourism sector, heavily reliant on a diverse network of carriers to serve international and domestic routes, is now struggling to stay afloat.
US tourism will feel the immediate consequences of these bankruptcies. Less competition means fewer choices for US travelers. And with fewer choices come skyrocketing prices. As airlines continue to struggle, passengers may find themselves facing a reduced flight network, increased fares, and less flexibility.
The collapse of Spirit Airlines, Corporate Air, PLAY Airlines, and others proves that the US tourism sector is vulnerable. The ripple effects will continue to disrupt US travel for years to come. The entire industry must take note: if these bankruptcies continue, the US tourism sector could be in danger of collapse.
What’s Next for US Travelers: Will the US Tourism Sector Ever Recover?
The bankruptcies of 2025 are a clear warning sign to the US tourism sector. Airlines across the USA are collapsing under financial pressure. The US travel market is about to face its biggest crisis in decades. If the US tourism sector wants to avoid disaster, it needs to step up. Passengers are already seeing the impact: less choice, higher prices, and fewer flights.
There is hope, though. With proper restructuring and new innovations in the US tourism industry, it’s possible that the US tourism sector can bounce back. However, the road to recovery will not be easy. The US tourism market must focus on long-term sustainability rather than short-term profits. If airlines don’t adapt to new realities, the US tourism sector may never recover.
The Uncertain Future of US Tourism Amid Airline Bankruptcies
The wave of bankruptcies in 2025 serves as a warning shot to the US tourism industry. Major airlines are struggling to survive, and the future of US travel looks uncertain. The US tourism sector needs to act quickly. Airlines must adapt or face the consequences. It’s time for US travelers to brace themselves for a potentially rocky road ahead. The US travel market, already under strain, now faces the greatest threat it has ever seen.
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