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Spirit Airlines Halts All Flights, Begins To Shut Down Operations; U.S.-Israel War with Iran; U.S. Withdrawing 5,000 Troops From Germany; King Charles Visits Bermuda in First British Overseas Territory Trip; Driverless Buses Testing in Swiss City of Sion. Aired 3-4a ET

Aired May 02, 2026 - 03:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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BEN HUNTE, CNN ANCHOR (voice-over): Hello. Wherever you are in the world, you are now in the CNN NEWSROOM with me, Ben Hunte in Atlanta. And it is so good to have you with me.

Coming up, Spirit Airlines announces it will start winding down its operations immediately. All flights on the budget carrier are now canceled.

U.S. President Donald Trump suggests a deal to end the war with Iran could be out of reach and that military action might resume.

And we'll take a look at the Kentucky Derby fashions as racing fans prepare for the annual Run for the Roses

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UNIDENTIFIED MALE (voice-over): Live from Atlanta, this is CNN NEWSROOM with Ben Hunte.

HUNTE: Welcome. We begin with breaking news. U.S. discount carrier Spirit Airlines has shut down. A statement from the company says all Spirit flights have been canceled and travelers should not go to the airport.

A last-minute bailout from the Trump administration failed to materialize late on Friday. You're seeing their website there now. Thousands of employees are out of work and millions of ticket holders must make new arrangements. Other airlines have said they will help stranded passengers and workers.

It's the first significant U.S. airline to cease operations in nearly 25 years. Let's bring in Meghna Maharishi. She's an airline reporter with Skift and joins us from New York.

Meghna, thanks so much for being with me. Spirit is ceasing operations. This is huge.

What reactions have you seen so far to that massive news? MEGHNA MAHARISHI, AIRLINE REPORTER, SKIFT: Yes. So this has really big implications I think, for air travel. Namely the biggest one is that, you know, Spirit really made air travel affordable. That's what it's known for.

When it came to the scene in the mid-2000s, it championed this model of unbundled fares, you know, that were dirt cheap. And you would have ancillary fees for everything else, such as carry-ons and checked baggage.

And at one point, Spirit was just so successful with this model that it forced other carriers to adopt basic economy so they could compete with Spirit. So really, I think its legacy is that it made air travel very affordable in the U.S. It had a known effect of putting downward pressure on airfares and the markets that it was in.

So now, without Spirit there, I think the big thing that you are going to see is that airfares will probably start to go up in some of those big markets for Spirit, such as Florida.

HUNTE: Spirit had hoped to emerge from Chapter 11 as a smaller airline. Right.

How much did surging fuel costs destroy that recovery plan?

MAHARISHI: Completely, I would say. I think the fuel costs, which are now nearly double of what Spirit had initially projected in February, made it essentially impossible for Spirit to execute its Chapter 11, its post-bankruptcy Chapter 11 plan.

And I think also that Spirit didn't really have any projections for how it would handle high fuel costs, which also started creating some uncertainty among creditors in the past couple of months as well. And I think then it just became increasingly clear that a liquidation was really going to be the only option for Spirit.

HUNTE: We are also hearing that there was a last-minute $500 million government rescue proposal tied to a large equity stake.

Why did that effort fail?

MAHARISHI: Yes, I think that effort appeared to have failed because talks with creditors hit an impasse this past week. As part of the deal, as you just mentioned, you know, the government would have given Spirit a $500 million loan in exchange for warrants on a significant stake in the carrier.

And that stake would have put the government ahead of the other creditors. And I think that became a big problem in a lot of the negotiations. And that's why this bailout failed to materialize for Spirit.

I think the creditors seem to have thought that they would be put in a weaker position financially with this arrangement. In the event Spirit did liquidate, the government would be the main beneficiary. And I believe that just became a big problem in the end. And I think

they thought that they would get more out of liquidation for Spirit. And at this point also, Spirit just did not have the additional cash to last.

HUNTE: Well, speaking about cash, let's talk about our money.

[03:05:00]

If viewers have Spirit flights booked this weekend, what should they do right now regarding refunds and rebooking and credit card protections?

MAHARISHI: Yes. So right now, Spirit did say that if you have booked a flight with them directly using a credit card or a debit card, you will be automatically refunded. If you booked through an online travel agency, you would have to contact the agent directly for a refund.

And then, you know, if you did book a Spirit flight using maybe something like a flight credit or points with Spirit's loyalty program, you might be compensated for that at a later date, as I think they flesh out the bankruptcy proceedings.

HUNTE: Interesting to know. American, United, Frontier and others do say they are preparing to help stranded passengers.

How messy do you think airport operations could get over the next 24 hours?

MAHARISHI: I think it could be fairly messy in this market that Spirit is pretty big in, such as Florida. Spirit, you know, the biggest markets are like fort Lauderdale and Orlando. And you can expect, I think, to see maybe some chaos there now that those flights are canceled.

I think you will also see some of those airlines adding additional capacity in some of those markets to accommodate those stranded Spirit passengers. Also, Frontier and American have said that they're going to cap fares at a certain price point on those routes that they overlap with Spirit on.

HUNTE: So tell me this, how surprised are you about this news breaking today?

MAHARISHI: It's not surprising, just given everything we have been hearing. It seemed, you know, like a week ago, there was some hope for Spirit that, if it would get this government bailout, it would give it a lifeline and it would, you know, be able to stay afloat for some time.

But then, on the other hand, when it seemed as if the talks with creditors were devolving and, you know, creditors were not on board with this agreement, Spirit only had so much cash on hand.

I believe, during a bankruptcy court hearing last Thursday, the lawyer representing Spirit said it had around $250 million of cash on hand and it would really only be able to last for days if it did not get any lifeline.

It also defaulted on a payment, so it lost access to other cash that it had on hand as well. So it was just already not in a good position. And I think also just generally looking at the industry, the low cost sector has been in crisis for a while now, especially since the pandemic.

A carrier like Spirit did not, you know, report a profit since 2019. And there were just so many confounding issues, I think, that led to its demise.

HUNTE: And are you sad to see them go?

MAHARISHI: I'm sorry; come again?

HUNTE: Are you sad to see them go?

MAHARISHI: Oh, yes. I think it is sad. It's like the end of an era. You know, Spirit was this huge pioneer in making travel in the United States affordable. You know, as I said earlier, it had --

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HUNTE: We've just lost Meghna there.

But we appreciate all of the insight that you gave us.

Thank you so much to Meghna Maharishi.

Onwards. U.S. president Donald Trump is casting doubt again on a potential deal to end the war with Iran. He says his options on Iran boil down to making a deal with Tehran or a major military escalation.

Iran sent its latest proposal to end the war with the U.S. to Pakistani mediators on Friday. The details of the proposal and the specific reasons behind the deadlock are unclear. But president Trump says he is not satisfied, even though he admits Tehran has made strides in negotiations.

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TRUMP: They've got to make a bad deal. But if they make a deal at all because, frankly, maybe we're better off not making a deal at all, you want to know the truth.

Because we can't let this thing go on. It's been going on too long.

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HUNTE: President Trump said he considers it to be treasonous for people to say that the U.S. is not winning the war with Iran.

Meanwhile, Iranian state media on Friday published a new statement attributed to the country's supreme leader, who says Iran, quote, "has emerged as a military power after years of effort."

Live now to Abu Dhabi and CNN's Leila Gharagozlou.

Leila, president Trump says Iran has made strides in negotiations but he also says he's not satisfied with Tehran's latest proposal.

Reading all of those signals, are we any closer to a deal?

LEILA GHARAGOZLOU, CNN PRODUCER: It's very unclear where we stand on a deal, particularly since we don't have many of the details of this proposal that Iran sent back to Pakistan.

Now I think what's really key here is to look at what Mojtaba Khamenei, the new supreme leader, has said, that Iran is emerging as a military power. So the Iranians are approaching any negotiations or talks from what they view as a position of strength, which means that they're quite unlikely to capitulate.

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We've also seen that the U.S. blockade on Iranian ports has done very little to kind of move the needle through economic pressure. Now president Trump also said that they recently seized a ship with cargo and oil. Take a listen.

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TRUMP: They're five miles away and one shot into the engine room blew up the engine room. The ship stopped its -- they used tugboats and then we landed on top of it. On top of everything else, we then land on top of it and we took over the ship.

We took over the cargo, took over the oil. It's a very profitable business.

Who would have thought we were doing that?

We're like pirates.

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GHARAGOZLOU: Taking Iran's oil is another way of putting economic pressure on Iran. But the thing here is, while they do feel very strong militarily, they also feel strong economically in terms of being able to withstand pressure.

Something to note about the Iranian system is that they have built an economy designed for pressure. They call it a resistance economy. And this has been designed through decades of sanctions.

So while there could be longer-term impact on the blockade, on the seizing of Iranian oil and ships, the short-term impact is unlikely to be so much so that they will capitulate in any deal. So where we land on this and what deal we'll see is really unclear at the moment, Ben.

HUNTE: OK. Thank you so much, Leila Gharagozlou, appreciate it.

Onwards. The next steps for possible talks between the U.S. and Iran are unclear. CNN's Kristen Holmes has more for us from the White House.

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KRISTEN HOLMES, CNN SENIOR WHITE HOUSE CORRESPONDENT: I've talked to a number of White House officials and it seems as disappointment with the latest proposal from Iran is permeating throughout the White House.

Two days ago, I was told by a senior White House official that they all felt pretty good about where this was headed. They thought Iran was making its way toward the same page that the U.S. was on and that they were going to come to the table with a solid deal.

Obviously, that is not what happened. Now we're hearing President Trump once again dipping into this threatening, blustery language, talking about blowing them up, talking about taking them on militarily.

And at one point, he actually said this. He said they've made strides but I'm not sure if they'll ever get there. That is a level of frustration that we haven't heard from some -- for some time.

President Trump has continued to say that Iran is making a lot of progress, that they were working toward what the U.S. wanted.

That is a very serious change in the rhetoric. And it goes to show you where this White House is right now.

And there are a lot of questions as to what the next step is going to be, because every official that I have spoken to has said that President Trump does not want to go in militarily.

He does not want to resume the strikes. He wants this to be over. He wants his team to be focusing on the economy. He wants everyone to turn their focus to the midterms. He is done with what's going on with Iran.

However, the country is not done because we are still involved in this back and forth and we have put so many resources into Iran. There are serious questions as to what the United States is going to get out of this, if anything.

And I do want to note one other part of this, which is the criticism that we are seeing from the rest of the world when it comes to this Iran, particularly our allies in Europe.

And President Trump now seems to be hitting back at some of those critics. Earlier tonight, they announced that the president was withdrawing 5,000 troops from Germany after the German chancellor criticized the war in Iran and the U.S. role in it.

Now this seems to be mostly symbolic, because there's still going to be 30,000 troops on the ground in Germany. But he's clearly trying to send a message to our allies that he's taking this seriously and they should get on board, whether it's just publicly. He clearly doesn't want the criticism. (END VIDEOTAPE)

HUNTE: For more analysis on this, we're joined by Mick Ryan, a retired major general in the Australian army. He's also the author of "The War for Ukraine: Strategy and Adaptation under Fire." He's joining us from Brisbane, Australia.

Thank you so much for being with me, sir. I appreciate it. The Pentagon says 5,000 U.S. troops will leave Germany.

But why now?

What do you think is driving this decision and is it smart?

MAJ. GEN. MICK RYAN (RET.), AUSTRALIAN ARMY: Well, good day, Ben. The United States has had a plan for some time to start drawing down its efforts in Europe. It was included in its national military strategy that was recently released.

I mean, it's always been the intention of the Trump administration to shift its efforts to the Western Hemisphere and the Pacific.

The key question is, however, what kind of troops will these 5,000 be, particularly since Germany is a critical location where the U.S. supports Ukraine from. Any redeployment of troops involved in support for Ukraine would have a big impact on that war.

HUNTE: Germany remains one of America's biggest military hubs in Europe despite this.

[03:15:03]

Is president Trump using military muscle here as political leverage against an ally?

RYAN: I'm sure he is. And these kind of spats in the NATO alliance and other military alliance are hardly unusual in military history. We saw it before the 2003 Iraq war and certainly during the Suez crisis, in the Second World War.

But I mean, obviously, the U.S. administration would like that these 5,000 troops being withdrawn is linked to Chancellor Merz's comments. But I think this plan has been in place for a while. It was just an opportune time to announce it.

HUNTE: If U.S. troop levels can shift so quickly and dramatically after political disputes, what message does that send to already nervous NATO allies?

RYAN: Well, you know, for all of them, the -- I think moving beyond walking on eggshells around the Trump administration, it now appears to them that, even if they have done that in the past, it hasn't really helped them in the relationship.

So being honest with their American friend appears to be the new strategy for NATO allies of the United States. And if that comes with this kind of behavior from the United States, it appears that Europe is willing to wear it.

But it also reinforces why many European countries, including Germany, are moving toward increasing defense spending in their own strategic autonomy.

HUNTE: Well, let's talk about that a bit more, because do you think that this could backfire and accelerate Europe's push to defend itself without relying so heavily on Washington?

RYAN: Well, it's something that Washington has actually asked the Europeans to do. It's just something the Europeans have been slow in taking up over the last decade or so.

The Trump administration was not the first to say that to the Europeans, that you need to spend more on your own defense. But they've certainly been more direct about it.

So this is the direction that the Trump administration actually wants Europe to go in so the United States military can reweight its military efforts in the Western Hemisphere and in the Indo-Pacific.

HUNTE: I just want to talk about Ukraine as well.

How concerned should Ukraine be about America scaling back its footprint in Europe, especially when unity matters so much here?

RYAN: Well, unity matters a lot, as you know. And, you know, unity in the face of Russian aggression in Europe is very important. Russia is very good at seeking to sow division in alliances.

But I mean, Europe is a critical footprint for the United States, for its training of Ukrainian troops, for the throughput of American military materiel that goes to Ukraine; in particular, air defenses. So it is very important that the United States stay in Europe.

And even with this drawdown, they will still have tens of thousands of troops still in Germany.

HUNTE: OK. Mike Ryan, thank you so much. We'll leave it there for now. Appreciate it.

RYAN: Thank you.

HUNTE: People in a Mexican town put a twist on International Workers Day by recognizing hard-working animals. Just ahead, highlights of the National Donkey Festival. This is the news we need.

And it's no runway but the Kentucky Derby has plenty of fashion sightings. A preview of some of the styles that one can expect to see at the big race, still ahead.

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HUNTE: A Mexican town marked May Day or International Workers Day with its annual Donkey Festival. This tradition started in 1965, when residents who relied heavily on donkeys for labor decided the hard working animals deserved to be recognized, too.

Friday's festival included donkey racing, a polo game played on a donkey's back and a donkey costume contest, which we're seeing there. Becky (ph) won the costume contest. The donkey dressed as a bee to raise awareness about the decline of pollinators and their impact on the environment.

King Charles is in Bermuda after wrapping up his four-day American visit. It is his first trip to a British overseas territory as monarch. A royal military parade and a 21-gun salute provided that welcome. He made the trip alone. Queen Camilla returned separately to Britain after their U.S. visit.

The king also viewed artifacts from the transatlantic slave trade. They took a boat ride and they attended an event at an aquarium, which was celebrating its 100th anniversary. The king's trip to Bermuda is set to last three days.

A large forest fire in Tuscany has forced the evacuation of about 3,000 people. On Friday, Italian firefighters battled adverse wind conditions to put out flames on Mount Faeta. The fire has been active since Tuesday and has spread over 800 hectares or three square miles.

Three planes have been deployed to drop water to help crews working to gain control of the fire.

OK, next up, who knows?

What looks like a normal passenger bus from the outside is a carefree scene on the inside. A unique public bus launched on Thursday on a three-week trial in Switzerland. It has no fixed route. It makes random turns here and there and no one pays a fare.

The brothers behind that conceptual art effort are known for their very unusual installations. They say the Line Zero bus will help passengers escape everyday routines and interact with people and scenery along the way.

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The artists say they hope to roll out more buses to nowhere elsewhere in the country.

It is that time of the year again. Horse racing, mint juleps and big hats too. The Triple Crown season is officially underway with the Kentucky Derby starting things off on Saturday. The famed Run for the Roses is much more than just a horse race. CNN's Andy Scholes previews some of the fashions that one might see at the track.

(BEGIN VIDEOTAPE) UNIDENTIFIED FEMALE: Do you know how long I've been waiting for this?

ANDY SCHOLES, CNN SPORTS: Oh, what was the thought behind your headwear?

UNIDENTIFIED FEMALE: It was really color. So I knew I was wearing a white today, so I needed something that was white.

UNIDENTIFIED FEMALE: I thought there's three different days, three different outfits and I wanted, like, a different kind of vibe each day.

UNIDENTIFIED FEMALE: The thought was to get something to match my outfit.

UNIDENTIFIED FEMALE: I got it the day before I came here.

SCHOLES: Oh.

UNIDENTIFIED FEMALE: So not too much thought but enough thought to make it worth it.

UNIDENTIFIED FEMALE: The big theme this year was, like, bright colors. And I was like, you know what, I want to look pretty much like a traffic cone. And you know what, coming in, I pretty much did.

SCHOLES: You were successful. How much did it run you?

UNIDENTIFIED FEMALE: It was $50.

SCHOLES: OK.

UNIDENTIFIED FEMALE: I can't imagine. It was probably several 100 for the person before me.

UNIDENTIFIED FEMALE: About $400.

SCHOLES: $400?

That's an upper tier.

UNIDENTIFIED FEMALE: That is.

UNIDENTIFIED FEMALE: Last year, I paid over $500 for a really large hat. And so this year I was like, you know, I think I can make one myself.

UNIDENTIFIED FEMALE: It was like, 20 Bucks. SCHOLES: Only $20. Wow. You did quite well.

UNIDENTIFIED FEMALE: It was me with a hot glue gun up until midnight last night. I kid you not.

SCHOLES: Oh, you made it.

UNIDENTIFIED FEMALE: Yes, I did. Yes. SCHOLES: Are you ever going to wear it again?

UNIDENTIFIED FEMALE: I live in (inaudible) I'll be here next year with this.

SCHOLES: So you bring it back?

UNIDENTIFIED FEMALE: Probably not. One and done.

SCHOLES: One and done.

UNIDENTIFIED FEMALE: One and done.

UNIDENTIFIED FEMALE: Absolutely never again.

SCHOLES: Is that hard to maintain out here in the wind?

UNIDENTIFIED FEMALE: It is -- it is kind of -- it is kind of hard with the wind blowing and stuff but I may manage it.

UNIDENTIFIED FEMALE: And honestly, once you start drinking, it's kind of a sobriety test whether or not your hat is going to stay on or not and it's doing good so far. Check in with me in about an hour.

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HUNTE: That's all I've got for you. Thanks for joining me and the team. I'm Ben Hunte in Atlanta, "CONNECTING AFRICA" is next and I'll see you tomorrow.