Spirit Airlines is preparing to shut down after failing to strike a deal for a financial lifeline from the Trump administration, two people familiar with the matter said.
The budget airline reshaped aviation in the United States in recent decades by selling cheap tickets and charging fees for everything from printed boarding passes to seat selection. But high fuel prices, competition from larger airlines, the Covid-19 pandemic and an engine defect hobbled the company.
In recent weeks, the airline had been negotiating a $500 million lifeline from the Trump administration. Some of the investors that Spirit owed money to opposed the terms of the bailout, under which the government could have ended up owning 90 percent of Spirit, because it would have left them in a worse financial position if the airline eventually failed. Some Republican lawmakers were also opposed to a government bailout of Spirit.
The recent spike in the price of jet fuel set off by the war in Iran further strained Spirit. The airline had filed plans in March to emerge as a leaner business from its second bankruptcy in recent years.
A Spirit spokeswoman declined to comment, but said that the airline was operating normally.
Representatives for the Transportation and Commerce departments and the White House did not immediately respond to requests for comment.
The Wall Street Journal earlier reported that Spirit was preparing to shut down.
It was not immediately clear when the company will stop flying and what an end to operations would mean for Spirit’s customers. In the past, other airlines have offered free or discounted tickets to travelers stranded by companies that abruptly shut down.
Over the past couple of years, Spirit’s footprint had shrunk a lot. It flew about 12,000 flights in April, down from about 25,000 two years earlier, according to Cirium, an aviation data firm.
Spirit last reported an annual profit in 2019 and has lost several billion dollars since then. The airline had struggled to recover from the pandemic amid intense competition in its biggest markets. Spirit also wrestled with rising costs, a failed attempt to sell itself to JetBlue Airways and engine defects that grounded many planes in its fleet for long stretches.
The airline filed for bankruptcy protection in late 2024 and again last year to address its financial problems. Last month, its chief executive said that Spirit had taken “material steps” toward resolving its second bankruptcy.
But many aviation experts said that it was hard to see how Spirit could survive even with a federal bailout. Some administration officials expressed similar concerns. “The question will be: Can we do anything to save Spirit and make it viable? Or would we be putting good money into a company that inevitably is going to be liquidated?” the transportation secretary, Sean Duffy, said in an interview with CBS last month.
