Spirit Airlines is preparing to shut down operations after a proposed $500 million government bailout fell apart, according to a May 1 report from the Wall Street Journal.
Spirit Airlines ran out of financing before hoping to finalize the proposed bailout, according to the same Wall Street Journal report. In addition, bondholders objected to the terms of the proposed deal. Under the framework for the bailout, the government could have owned 90% of the airline, which would have left the airline in a worse financial position if it eventually failed, according to the New York Times. In addition, the airline experienced strain due to rising prices in jet fuel as a result of the Iran War, the outlet reported.
Spirit Airlines, which is known for selling budget airline tickets, initially filed for bankruptcy in late 2024, according to the New York Times. The airline then filed for bankruptcy a second time in 2025. The airline reportedly had reached a deal with its lenders that would have helped it emerge from bankruptcy, but the plan was derailed by the Iran War, Reuters reported.
Spirit Airlines lost several billion dollars since 2019, when it last reported an annual profit, and struggled to recover following the global COVID-19 pandemic, according to the New York Times. The airline has also decreased its number of flights, going from 25,000 two years ago to 12,000 this past April, the outlet indicated, citing aviation data from Cirium. (RELATED: Federal Officials Step In To Cut Flights At Airport Adding More And More Amid Extreme Delays)
A rescue hearing was scheduled for April 30, but did not continue as planned following discussions about the proposed government bailout, Reuters reported.
A spokesperson for Spirit Airlines declined to comment on the discussions, instead telling the outlet that “Spirit is operating as usual.”
Ahead of news about the shutdown, President Donald Trump said he’d “love to be able to save [the] airline” while speaking from the Oval Office April 30 during an unrelated event, according to KTLA.
“They have some good aircraft and good assets. I’d love to be able to save those jobs,” Trump said.
While it is unclear when the airline will officially stop flights, operations could stop as soon as May 2, according to CBS News.