By Megan Cerullo, Kris Van Cleave and Faris Tanyos
Updated May 2, 2026 / 3:19 AM EDT
Budget carrier Spirit Airlines said early Saturday that it has begun an orderly wind-down of operations after talks to secure a $500 million federal rescue collapsed.
Spirit Aviation Holdings, the airline’s parent company, said in a news release that all flights have been canceled and customers should not go to the airport. The carrier said it will automatically issue refunds for tickets purchased with a credit or debit card and has launched a help site, spiritrestructuring.com, to answer passenger questions about the shutdown.
Company officials blamed a sharp, sustained rise in jet fuel costs tied to the Iran war, along with other financial pressures, for wiping out available options. Spirit said recent oil-price increases materially altered its outlook and, with no new funding available, the business had no choice but to wind down.
The Trump administration had proposed a bailout that would have given the U.S. government a 90% stake in the airline, but negotiations broke down in recent days as Spirit’s cash reserves dwindled. U.S. officials previously told CBS News that some of Spirit’s bondholders — among them Ken Griffin’s Citadel and Ares Management Corp. — opposed the deal.
“In March 2026, we reached an agreement with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business,” Spirit CEO Dave Davis said in the statement. “However, the sudden and sustained rise in fuel prices in recent weeks ultimately has left us with no alternative but to pursue an orderly wind-down of the Company.”
Spirit, known for its bright yellow planes and low fares, had filed for bankruptcy twice since 2024. By the time of its first Chapter 11 filing in November 2024, the airline had reported more than $2.5 billion in losses since 2020. Spirit filed again in August 2025 and warned regulators it had “substantial doubt” about its ability to continue operating.
The carrier pared its network and workforce over the last two years: in 2025 it eliminated nearly 200 underperforming routes and cut almost 4,000 jobs, leaving about 7,500 employees, including roughly 2,000 pilots and 3,000 flight attendants, according to its most recent filing.
White House officials were told Spirit would shut down within 24 hours, people familiar with the matter said, and the administration did not pursue a last-minute intervention. When asked Friday about a potential bailout, President Trump said, “Well, I guess we’re looking at it. If we can do it, we’ll do it, but only if it’s a good deal.”
Davis thanked the administration and Commerce Secretary Howard Lutnick for their efforts to preserve jobs and service. Spirit operated flights to more than 40 U.S. cities, with a primary hub at Fort Lauderdale–Hollywood International Airport, and served destinations in the Caribbean and Central and South America.
Founded in 1983 as a spinoff of a trucking company and rebranded as Spirit Airlines in 1992, the carrier embraced an ultra-low-cost, no-frills model in 2007 that helped it grow into a familiar player on domestic and regional routes. Its liquidation marks the end of a longtime low-cost option for many travelers as the broader airline industry grapples with higher fuel costs, rising fares and route cuts.