Spirit Airlines is preparing to cease operations after a last-ditch effort to secure a $500 million federal rescue package fell apart, according to people familiar with the matter.
The budget carrier, which reshaped American aviation over the past two decades by selling bare-bones tickets and charging fees for everything from printed boarding passes to seat selection, has been battered by high fuel costs, the Covid-19 pandemic, a failed merger and persistent engine defects. A spokeswoman for the airline said Friday it was “operating normally” but declined to comment further.
The proposed bailout would have given the federal government a 90 percent stake in the Florida-based carrier in exchange for the loan — terms that drew opposition from several major bondholders, who said the arrangement would make the government the senior creditor and leave other investors worse off if the airline ultimately failed. Some Republican lawmakers also opposed a government rescue of Spirit.
Transportation Secretary Sean Duffy expressed public skepticism about the rescue in recent weeks, questioning whether federal money could save the carrier long-term. President Trump had said he was open to a government takeover, describing Spirit as having “some good aircraft and good assets” and suggesting the government could turn a profit once oil prices fall — but even some administration officials shared doubts about the airline’s viability.
Rising jet fuel costs tied to the conflict in Iran added further pressure on Spirit’s already strained finances, compounding years of losses, mounting debt and a blocked merger with JetBlue Airways. The airline filed for bankruptcy protection in late 2024 and filed again in 2025. It had filed plans in March to emerge from its most recent bankruptcy as a leaner operation focused on high-demand routes, but aviation analysts were already skeptical the restructuring could succeed.
“Spirit has just declined to the point now where they’ll have to shrink to survive. And no airline can shrink to survive,” Mike Boyd, chief executive of aviation forecasting firm Boyd Group International, told NPR.
Spirit last reported an annual profit in 2019 and has lost several billion dollars since. It was not immediately clear when the airline will stop flying or what a shutdown would mean for ticketholders. In past airline collapses, competing carriers have at times offered free or discounted seats to stranded passengers. The Wall Street Journal first reported Spirit’s preparations to shut down.
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