Spirit Airlines is shutting down operations effective immediately, after a White House proposal to bail out the beleaguered budget carrier fell through, the airline said in a statement early Saturday.
The shuttering follows “extensive and comprehensive efforts to restructure the business,” the airline said, adding that the recent increase in oil prices and other pressures have “significantly impacted” its prospects.
“With no additional funding available to the Company, Spirit had no choice but to begin this wind-down,” it said.
All flights have been canceled, and Spirit passengers should not go to the airport, the statement added.
President Donald Trump suggested last week that the federal government should “just buy” Spirit Airlines, which has declared bankruptcy twice since 2024. The administration had been floating a $500 million rescue plan that would have given the government a hefty ownership stake in the budget airline — a proposal that drew criticism from some of Trump’s Republican allies, including certain administration officials.
On Friday morning, reports emerged that the airline was unable to get support for the deal and would soon cease operations. Still, hope for a financial lifeline persisted until the last minute. Responding to reports that the company was imminently shuttering, a Spirit spokesperson said the airline was operating as normal and declined to comment on ongoing discussions about the company’s future.
Trump told reporters at the White House around noon Friday that there would be an announcement pertaining to Spirit within a day or two, and suggested that discussions were continuing. He added that the White House had given Spirit a final proposal.
“I guess we’re looking at it. If we could do it, we’d do it, but only if it’s a good deal,” Trump said about a government plan to bail out Spirit Airlines. “But if we can’t make a good deal — no institution’s been able to do it. I said I’d like to save the jobs. … I would say we’re driving a tough deal, but it’s one of those things. We will do it or we won’t.”
Spirit announced in March that it was set to emerge from bankruptcy this summer, but soaring jet fuel prices — which have roughly doubled since the United States and Israel launched a war with Iran — exacerbated the company’s long-standing financial trouble. Long before the war with Iran, Spirit struggled with bad business decisions, a loss of its business focus and overexpansion, said Henry Harteveldt, an airline industry analyst at Atmosphere Research Group.
Spirit’s core customers, who typically earn less than $80,000 a year, were hardest hit by inflation that happened in the wake of the coronavirus pandemic, Harteveldt added. Spirit also faced increasing competition from larger carriers and other budget airlines, including Frontier Airlines, which increased its flights in and out of Spirit’s home base of South Florida in recent years.
“So [there’s] no single cause of Spirit’s demise, but Spirit has been teeter-tottering on the verge of shutting down for a long time,” Harteveldt said. “It’s very unfortunate. More than 7,000 people may lose their jobs if it does shut down and we lose an airline and a source of price competition.”
Spirit’s shutdown means more than 10,000 people could lose their jobs and thousands of Spirit ticket holders could be stranded. Several domestic airlines — including American, Frontier and United — on Friday said they had plans in place to support stranded Spirit customers and employees in the event that the company shuts down. American Airlines, for instance, said it would cap fares on its “main cabin” tickets for Spirit routes to cities where it also offers nonstop service.
“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 spokeswoman Jennifer De La Cruz said in a statement.
Spirit Airlines has operated in its current iteration — as an ultra-low-cost airline that charges fees for any amenity beyond a basic seat — for about the past 20 years. Though it was often skewered for its bare-bones service, Spirit’s corresponding dirt-cheap fares opened up air travel to people who otherwise may not have been able to afford it and shaped how other airlines competed. Almost all major domestic air carriers now offer no-frills “basic” fares that, like Spirit, include only a seat on the plane.
It remains to be seen if the ultra-low-cost carriers that remain in business, including Allegiant Air, Avelo Airlines, Frontier Airlines and Sun Country Airlines, will raise their fares without Spirit in the picture.
“It depends on the competitive environment — if there’s only one budget airline left on a route and whether another budget airline chooses to enter that route,” Harteveldt said. “If there’s no other low-fare competition, regardless of the airline, it’s highly likely that fares will go up, even accounting for the impact of higher jet fuel prices.”
Cat Zakrzewski, Michael Birnbaum, Erin Cox and Emily Davies contributed to this report.
The post Spirit Airlines shuts down after White House rescue deal falls through appeared first on Washington Post.
