Close-up on a woman shopping at a convenience store and checking her receipt while exiting. (Hispanolistic.Getty)
(NEW YORK) — Inflation rose for a second consecutive month as the U.S.-Israeli war with Iran continued to send gasoline prices surging in April, government data on Tuesday showed. The inflation report matched economists’ expectations.
Prices rose 3.8% in April compared to a year earlier, marking an increase from a year-over-year inflation rate of 3.3% in the prior month. Annual inflation jumped to its highest level in three years, U.S. Bureau of Labor Statistics (BLS) data showed.
“I don’t think about Americans’ financial situation,” President Donald Trump told reporters Tuesday as he was departing for a high-stakes trip to China, when asked to what extent Americans’ financial situations were motivating him to make a deal with Iran.
“The most important thing, by far, is Iran cannot have a nuclear weapon,” the president further said, adding, “Every American understands.”
As recently as February, inflation stood at 2.4%, clocking in just a tick above the Federal Reserve’s target level of 2%.
The jump in prices last month owed in large part to a sharp rise in costs for products impacted by a global oil shock. Gasoline prices were 5% higher in April than March, the BLS report said. Airline fares climbed 2.8% from the previous month.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff prompted one of the largest oil shocks ever recorded.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.
Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration.
The price of an average gallon of gas stood at $4.50 as of Monday, AAA data showed – an increase of $1.52 per gallon since the war began on Feb. 28. That amounts to a roughly 50% price jump in about two-and-a-half months.
The surge in fuel prices sent costs surging for gas-dependent transportation, such as airline tickets. In March, airfare costs jumped more than 3% from a month earlier.
Within weeks, the jump in prices could spread to groceries, furniture and just about any other item delivered by diesel-fueled trucks and tankers, some analysts previously told ABC News.
The recent rise in prices has left many consumers feeling glum. In May, consumer sentiment fell to the lowest level ever recorded, according to a monthly survey conducted by the University of Michigan since 1978.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shoppers remain pessimistic. In theory, a slowdown of spending could slow the economy.
By some measures, however, the U.S. economy has proven resilient amid the war.
Hiring slowed in April but remained solid, exceeding economists’ expectations, federal government data last week showed. The unemployment rate held steady at 4.3% in April, a low level by historic standards. Additionally, the economy grew at an annualized rate of 2% in the first quarter of 2026, marking an acceleration from 0.5% growth recorded in the previous quarter.
However, a persistent increase in consumer prices may put pressure on the Fed to raise interest rates as a means of dialing back inflation.
The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.
If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.
Markets forecast a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.
ABC News’ Karen Travers, Emily Chang and Fritz Farrow contributed to this report.
A sign displays the prices of unleaded gasoline and diesel fuel at a Chevron gas station in Los Angeles on Monday, May 4, 2026. (Kyle Grillot/Bloomberg via Getty Images)
(LOS ANGELES) — A Chevron gas station in Los Angeles elicited headlines in recent weeks for charging an eye-popping $8.71 a gallon, becoming an emblem for the spike in fuel costs set off by the Iran war.
Sky-high gas prices nationwide owe primarily to a historic oil shock that followed Iran’s effective closure of the Strait of Hormuz. But a lesser-known contributor helps account for just how high prices have gotten, at least at some name-brand stations selling fuel from the likes of Chevron, Shell and ExxonMobil.
Branded stations, which make up almost half of gas stations nationwide, charge about 6 cents more per gallon on average than their unbranded counterparts, according to data from the Oil Price Information Service (OPIS), a Dow Jones company, for the week ending on May 2. That price gap marks little change from where it stood before the war, OPIS data showed.
In at least one state, the price disparity runs significantly higher. Gas at a Chevron station in California costs an average of 48 cents more per gallon than the price at an unbranded station, the California Energy Commission (CEC) found in 2024. After Chevron, the most expensive average gas prices in California were found at Shell, 76 and Arco-branded stations, the CEC said.
Some analysts said the higher price of branded gas is due to additional costs, such as proprietary additives in the fuel, as well as a producer’s marketing budget and the payment forked over by stations for guaranteed access to its gas – costs that are passed on to consumers.
Other analysts and a California state watchdog, however, have said that the price disparity may stem from the market dominance of a handful of companies, allowing them to drive up the retail price.
The scrutiny comes as some large oil companies like British Petroleum, Valero and Marathon Petroleum report soaring profits amid the Iran war, though Chevron and Exxon saw profits decline due in part to one-time paper losses stemming from financial hedges meant to protect them against a possible price drop.
The price of an average gallon of gas currently stands at $4.52, an increase of $1.54 per gallon since the war began on Feb. 28, AAA data showed. That amounts to a nearly 52% jump in about two-and-a-half months.
Patrick Penfield, a professor of supply chain practice at Syracuse University, said the recent surge in prices could prompt a reexamination of the costs baked into the price at the pump, including the added charge for branded gas.
“When you see such big price increases for gasoline, everything should be looked at,” Penfield said.
Chevron did not directly respond to an ABC News request for comment. However, Jim Stanley, director of media relations at the Western States Petroleum Association, a industry trade group, contacted ABC News at Chevron’s request.
Drivers choose branded gas stations as a matter of customer preference centered on issues like lighting, bathroom cleanliness or location, Stanley said.
“Any branded product – whether it’s medication or groceries or clothing – is going to generally cost more than a generic alternative,” he added.
Stanley further said roughly 95% of branded gas stations operate as franchises, meaning they enter into agreements with big-name companies but retain self-ownership.
“Branded gas stations can have these brand standards that they hold their franchisees to: a higher standard than an independently owned store,” Stanley added.
Kelly Davila, a spokesperson for Exxon, said the company doesn’t “own or operate our retail stations.”
Shell declined to respond to ABC News’ request for comment.
Phillips 66, the parent company of 76, did not respond to ABC News’ request for comment. Neither did Marathon Petroleum, the parent company of Arco.
Branded gas stations account for about 45% of stations nationwide, selling gas under the name of a major fuel company, OPIS data shows. Each of the brands touts a unique blend of additives that it says improves the gasoline and eases its effect on car engines. The extra ingredients go beyond the minimum standards mandated by federal and some state regulators, Denton Cinquegrana, chief oil analyst at Dow Jones Energy, told ABC News.
“At the end of the day, all gasoline has to meet a federal standard,” Cinquegrana said. “The branded gasoline goes above and beyond that minimum requirement.”
Higher prices charged by name-brand stations – a dynamic that stretches back decades – can be traced in part to spending on the development and production of the additives, Cinquegrana added: “They’re trying to recoup some of that investment.”
Some analysts, however, said it remains unclear whether the added ingredients deliver a meaningfully improved product.
“Regardless of each company’s claim, there is not sound evidence supporting the fact that additives do indeed improve the quality of gasoline, at least to the extent that the consumers perceive it to,” a study issued by the non-profit RAND corporation found in 2010.
The California Division of Petroleum Market Oversight (DPMO), a state watchdog agency, last year said it was “unable to independently verify claims that branded gasoline is superior to unbranded gasoline.”
When asked about studies disputing the value of additives, Stanley, of the Western States Petroleum Association, declined to comment.
The higher price of branded gas also owes to marketing budgets borne by the big-name companies as well as elevated costs paid by retailers as part of agreements with the brands that guarantee them priority access in the event of a supply shortage, the U.S. Government Accountability Office said in a study of the issue published in 2005.
“Gas stations pay more for a contract for branded gasoline because they have a guarantee of supply. And they have a major global brand backing them up,” Cinquegrana said.
Some analysts and a California watchdog disputed those explanations. Rather, they said, the higher prices may reflect market power enjoyed by the large firms, giving them leeway to raise prices without fear of competition.
“My own reading of the data is that the branded companies are able to take advantage of a lack of a competitive market and are acting almost like an oligopoly,” Paasha Mahdavi, a professor of energy governance and political economy at the University of California, Santa Barbara, told ABC News, using a term that describes an industry dominated by a small number of companies.
Mahdavi focused on the relatively large price gap in California between branded and unbranded gas, which has widened in recent years.
In 2019, branded gas from companies like ExxonMobil, Arco, Valero and Chevron cost an average of 20 cents more per gallon in California; within five years, that price disparity had climbed to 31 cents, according to a DPMO study issued last year. Over that same period, the profitability of oil refiners in California has increased, DPMO said.
The rise in refinery profitability may be traced to the “exercise of market power by gasoline suppliers,” DPMO added, saying 90% of in-state refining capacity is controlled by four companies. As a result, elevated wholesale prices could be passed along the supply chain, DPMO said.
The largest companies appear to have “pretty strong control of not only upstream assets like oil and gas, but also control of the gas stations that are preferred by consumers based on location,” Mahdavi said. “They’re able to charge a higher premium.”
Valero did not respond to ABC News’ request for comment.
Stanley, of the Western States Petroleum Association, said he is unsure why California features a larger gap in price between branded and unbranded gas than other states. One contributor, he said, could be the relatively low density of gas stations in the state.
“Competition brings down costs. When a retailer doesn’t see that same level of competition, you can see that reflected in higher prices.”
Stanley faulted environmental regulations in California for high overall gas prices.
“Branded or unbranded, gas in California is the most expensive in the country. That’s because of supply constraints that have been created by state policies.”
Mahdavi further said that the locations of branded gas stations may carry additional costs due to higher rents, accounting for some of the price gap.
The rise in prices during the Iran war offers an opportunity to revisit the factors that contribute to the price at the pump, according to Mahdavi.
“We can shine more light on what is driving these higher prices,” he said.
In this photo illustration, the PayPal logo is displayed on the screen of a smart tablet. (Sheldon Cooper/SOPA Images/LightRocket via Getty Images)
(WASHINGTON) — PayPal has agreed to waive $30 million in processing fees in order to resolve a federal investigation into an investment program that sought to boost Black and minority-owned businesses, the Justice Department announced Tuesday.
The probe is just one of a number launched under the Trump Justice Department scrutinizing companies that launched diversity, equity and inclusion (DEI) initiatives that Republicans have cast as unlawful and discriminatory.
DOJ had been probing whether PayPal’s program, which was launched in 2020 following the killing of George Floyd amid social unrest around the country, violated a federal law prohibiting creditors from discriminating against applicants based on race.
In order to avoid further investigation, the company has agreed to waive processing fees for roughly $1 billion in transactions — estimated at $30 million — “for eligible American small businesses that are veteran-owned or engaged in farming, manufacturing, or technology.”
The announcement by DOJ does not explain why PayPal’s transaction fee waivers will be directed to those specific classes of small businesses.
It has also agreed to launch a new small business initiative that does not account for “the race or national origin of the business owners.”
“This Department of Justice is delivering on President Trump’s vow to root out illegal DEI from every corner of corporate America,” Acting Attorney General Todd Blanche said in a statement announcing the settlement. “American corporations are on notice: you will face our aggressive enforcement if you use race or national origin to discriminate against qualified Americans.”
The settlement does not include any admission of wrongdoing by PayPal, and under the agreement, the DOJ acknowledges it “has not made any determinations or findings regarding PayPal violating [the Equal Credit Opportunity Act] or any other federal law related to the economic opportunity fund.”
“For more than two decades, PayPal has helped small businesses start, scale, and thrive by expanding access to digital financial tools,” a PayPal spokesperson said in a statement to ABC News. “We’re excited to launch the Small Business Initiative to infuse American small businesses with even more economic opportunity.”
The Ateela 2 Oil Tanker boat navigates the sea on April 28, 2026 on Qeshm Island, Iran in the Strait of Hormuz. (Photo by Asghar Besharati/Getty Images)
(NEW YORK) — An inflation report on Tuesday will provide a fresh gauge of prices as the Iran war ratchets up costs for gasoline, airfares and other expenses.
Economists expect consumer prices to have risen 3.8% in April, when a surge in gasoline costs took hold weeks into the war, which would mark a significant acceleration from 3.3% in the previous month.
As recently as February, inflation stood at 2.4%, clocking in just a tick above the Federal Reserve’s target level of 2%.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz in March, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff prompted one of the largest oil shocks ever recorded.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.
Crude oil is the main ingredient in auto fuel, accounting for more than half of the price paid at the pump, according to the federal U.S. Energy Information Administration.
The price of an average gallon of gas stood at $4.52 as of Monday, AAA data showed – an increase of $1.54 per gallon since the war began on Feb. 28. That amounts to a nearly 52% price jump in about two-and-a-half months.
The surge in fuel prices sent costs surging for gas-dependent transportation, such as airline tickets. In March, airfare costs jumped more than 3% from a month earlier.
Within weeks, the jump in prices could spread to groceries, furniture and just about any other item delivered by diesel-fueled trucks and tankers, some analysts previously told ABC News.
The recent rise in prices has left many consumers feeling glum. In May, consumer sentiment fell to the lowest level ever recorded, according to a monthly survey conducted by the University of Michigan since 1978.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shoppers remain pessimistic. In theory, a slowdown of spending could slow the economy.
By some measures, however, the U.S. economy has proven resilient amid the war.
Hiring slowed in April but remained solid, exceeding economists’ expectations, federal government data last week showed. The unemployment rate held steady at 4.3% in April, a low level by historic standards. Additionally, the economy grew at an annualized rate of 2% in the first quarter of 2026, marking an acceleration from 0.5% growth recorded in the previous quarter.
However, a persistent increase in consumer prices may put pressure on the Fed to raise interest rates as a means of dialing back inflation.
The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.
If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking an economic slowdown.
Markets forecast a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.
(NEW YORK) — Hiring slowed in April as a rise in fuel prices hammered shoppers weeks into the war with Iran, U.S. government data on Friday showed.
The U.S. added 115,000 jobs in April, according to the report, which marked a cooldown from 178,000 jobs added in March. The reading for April exceeded economists’ expectations.
The unemployment rate held steady at 4.3% in April, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards.
The U.S. Bureau of Labor Statistics (BLS) collected the previous month’s survey data through the second week of March, before the full effects of the oil shock set off by the war.
As in previous months, the health care industry stood out as a top source of hiring in April, adding 37,000 jobs, the BLS said. The retail sector, as well as transportation and warehousing, also contributed to the increase in hiring.
Employment in the federal government continued to decline in April, shedding 9,000 jobs, the BLS said. The federal government has lost 348,000 jobs, or nearly 12% of its workforce, since October 2024, a month before President Donald Trump was elected.
The hiring figure for March was revised upward from 178,000 jobs added to 185,000 jobs added. Hiring for February, however, was revised downward from a loss of 133,000 jobs to a loss of 156,000 jobs.
The fresh data arrived as the war continues to drive up gasoline prices and borrowing costs, threatening a drag on the economy.
The U.S. added an average of about 15,000 jobs per month in 2025, BLS data showed. That performance indicated a drop-off from 186,000 jobs added each month in 2024.
The Middle East conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the worldwide supply of oil.
The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.
The price of an average gallon of gas stands at $4.54 as of Friday, marking an increase of $1.56 per gallon since the war started, AAA data showed. That amounts to a roughly 50% jump in about two-and-a-half months.
In theory, a prolonged oil shortage could drive up prices for a vast array of goods, sapping energy from consumer spending, which powers most of the nation’s economic growth.
A potential jump in costs for additional goods delivered through the Strait of Hormuz — such as fertilizer and diesel fuel — could also raise prices beyond gasoline, putting pressure on the Federal Reserve to hike interest rates in an effort to quell inflation.
Last month, Fed Chair Jerome Powell described the economic outlook as “highly uncertain.”
“We’re kind of waiting to see what happens with events in the Middle East,” Powell said.
The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.
The benchmark interest rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking a slowdown in hiring.
Markets peg a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.
Signage at an Apple Store in San Francisco (David Paul Morris/Bloomberg via Getty Images)
(NEW YORK) — Apple has agreed to settle a class-action lawsuit for $250 million after the tech giant was accused of marketing Apple Intelligence technologies that “did not exist” yet, according to a Tuesday court filing.
The settlement paves the way for payouts of up to $95 for iPhone users who purchased eligible devices between June 10, 2024, and March 29, 2025.
Plaintiffs in the suit asked a judge on Tuesday to approve the settlement, which they described as “within the range of what is fair, reasonable, and adequate,” according to the filing.
The settlement will provide class members up to $95 per device, “depending on claim volume and other factors,” the filing states.
The lawsuit, which was originally filed in March 2025, alleged the iPhone manufacturer “violated consumer protection laws when it advertised its new generation of iPhones as a breakthrough in artificial intelligence (‘AI’), including significant enhancements to Siri, iPhone’s digital assistant,” according to Tuesday’s court filing.
The lawsuit itself specifically accused Apple of introducing Enhanced Siri capabilities — such as AI-powered digital assistant recollection and calendar reminders — even though they “did not exist or were materially misrepresented.”
The plaintiffs also alleged Apple “saturated the market with deceptive ads” promoting that technology, which were “viewed widely by the Public” online and in ad spots during major broadcast events. They alleged that promotion led consumers to buy iPhones due to the perception that Siri had some of those enhanced AI features.
According to Tuesday’s settlement document, Apple has “maintained that its ads were not misleading because it disclosed from the outset the Apple Intelligence features would be delivered over time and continue to evolve.”
The company also “maintained that it successfully delivered more than 20 Apple Intelligence features” and argued that “consumers purchase new iPhones for any number of reasons that have nothing to do with Enhanced Siri features,” the settlement document states.
An Apple spokesperson confirmed the settlement in a statement to ABC News on Wednesday.
“Since the launch of Apple Intelligence, we have introduced dozens of features across many languages that are integrated across Apple’s platforms, relevant to what users do every day, and built with privacy protections at every step,” the spokesperson said. “These include Visual Intelligence, Live Translation, Writing Tools, Genmoji, Clean Up and many more.”
They added, “Apple has reached a settlement to resolve claims related to the availability of two additional features. We resolved this matter to stay focused on doing what we do best, delivering the most innovative products and services to our users.”
The settlement payout applies to a list of iPhone 15 and 16 devices, including the iPhone 16, iPhone 16e, iPhone 16 Plus, iPhone 16 Pro, iPhone 16 Pro Max, iPhone 15 Pro or iPhone 15 Pro Max, according to Tuesday’s filing.
The document notes there are approximately 37 million eligible devices.
The settlement will apply to those who purchased the eligible devices and “who reside in the United States and purchased an Eligible Device in the United States for purposes other than resale,” according to the document.
Customers pump gas into their car at a 76 station, May 4, 2026 in Los Angeles (Justin Sullivan/Getty Images)
(NEW YORK) — Sky-high gasoline prices are hammering drivers across the United States as the Iran war chokes off global oil supply. California, however, may be feeling the sting more than anywhere else.
The average price of a gallon of gasoline in California clocks in at $6.13, standing 36% higher than the national average, AAA data showed. Some elected officials in the state have warned of a potential oil and gas shortage that could push prices up even further.
Siva Gunda, the vice chairman of the California Energy Commission, on Tuesday said at a hearing of the state assembly that California retains enough gasoline to satiate demand over the coming weeks.
“I do not see presently — at least up to six weeks — a supply shortfall,” Gunda said. “Beyond that, based on what we’re hearing from the industry and what we’ve observed, the pricing will move molecules to California, but it will come at a price.”
David Alvarez, a Democratic California state assembly member who represents Southern San Diego, warned of the potential impact on consumers.
“For six weeks, at least, there seems to be some certainty. But almost as certain is if this situation continues after six weeks, we would likely see some price increases,” Alvarez said.
Fuel prices in California typically run higher than other states, even in the best of times. That usual price disparity stems from regulations and taxes imposed in the Golden State, among other factors.
The Iran war has exacerbated the price pressure, exposing California’s dependence in large part on foreign imports, some analysts said. A shutdown of some key oil refineries in recent months worsened California’s vulnerability, slashing the state’s gasoline output in the absence of alternative fuel sources.
Still, the drop-off in gas supply is unlikely to produce a shortage of product at local gas stations, since an ongoing surge in prices should deter some buyers, analysts said. Under such a scenario, known as “demand destruction,” high prices make gas unaffordable for some drivers, forcing them to forgo gasoline use altogether.
“A shortage within the continental U.S. would take a really extreme situation, since prices respond to supply and demand,” Susan Bell, a senior vice president at the consulting firm Rystad Energy, told ABC News.
The Middle East conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the worldwide supply of oil. As a result, global oil prices have soared more than 50%.
The vast majority of oil that passes through the strait is bound for Asian markets, but some of it reaches the United States, including California. That dependence has worsened a widely felt problem: since oil prices are set on a global market, prices have climbed for just about everyone as buyers chase fewer barrels of crude.
California imports about three-quarters of its oil from foreign nations and Alaska, California Energy Commission (CEC) data shows. Roughly 30% of the state’s oil comes from the Middle East, especially Iraq and Saudi Arabia, according to the agency.
“California is challenged buying crude oil because they did buy from the Middle East,” Bell said.
The oil bottleneck has driven up the price of crude, straining the state’s supply chain. But the shortfall of gasoline in the state owes primarily to a decline in the availability of refined products, some analysts said.
California ships in a portion of its auto fuel from Asia, but those imports have been disrupted by the war, they added.
The shutdown of two major oil refineries in recent months has diminished the state’s ability to make up for the lost gasoline with in-state production, they added. A longstanding absence of adequate pipeline infrastructure connected to other states, meanwhile, has prevented California from turning to domestic supply.
Gasoline inventory in the state averaged 9.55 million barrels over the four weeks ending on April 24, CEC data shows. That figure puts inventories near the lowest level on record dating back to 2005, according to a Reuters analysis. That total stock includes non-California gasoline, blending components and California’s gasoline blend.
“California has designed an energy island in terms of the products we actually use. We’re not connected to the rest of the U.S. as efficiently as many other states are,” Paasha Mahdavi, a professor of energy governance and political economy at the University of California, Santa Barbara, told ABC News.
As a result, Mahdavi added: “There’s a crunch hitting gas stations.”
Despite the supply squeeze, California is unlikely to suffer from long lines at gasoline stations or customers leaving with empty tanks, some analysts said.
Rather, the price of gasoline will continue to move up, reaching such heights that some buyers will turn to alternatives or simply go without fuel, Severin Borenstein, a professor of Business Administration and Public Policy at the University of California, Berkeley, told ABC News.
If public officials were to put a price cap on gasoline, then customers would likely flock to the pump and empty inventories, Borenstein added. As prices surge, however, customers will fall out of the market instead.
“We don’t have any gas lines because we don’t regulate the price of gas,” Borsenstein told ABC News. “As much as people hate high gas prices, they hate gas lines even more.”
A Spirit Airlines aircraft prepares to depart from the Austin-Bergstrom International Airport on November 13, 2024 in Austin, Texas. (Photo by Brandon Bell/Getty Images)
(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.
A Spirit Airlines aircraft prepares to depart from the Austin-Bergstrom International Airport on November 13, 2024 in Austin, Texas. (Photo by Brandon Bell/Getty Images)
(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.
Workers at Spirit Airlines wait for passengers to arrive for their flights at O’Hare Airport on March 10, 2026 in Chicago, Illinois. (Scott Olson/Getty Images)
(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.
