Elevated jet fuel prices near $4.20–$4.50 per gallon have compressed margins for U.S. low-cost carriers, driving first-quarter 2026 industry net losses of roughly $966 million and pushing carriers with high lease and debt obligations toward distress. Spirit Airlines' second Chapter 11 filing in August 2025 culminated in a May 2026 liquidation after failed restructuring, removing capacity and underscoring execution risks. Analyst models now assign JetBlue over 75% probability of bankruptcy by 2027 amid projected $1.3 billion losses and rising interest costs on $9 billion debt, while Frontier faces 45–50% odds tied to $800 million annual leases and $1.4 billion aircraft commitments. Traders are watching upcoming earnings releases, fuel hedging updates, and any new regulatory or merger developments for shifts in implied probabilities through year-end.