By Megan Cerullo, Kris Van Cleave and Faris Tanyos
Updated on: May 2, 2026 / 3:19 AM EDT / CBS News
Spirit Airlines announced early Saturday that it was ceasing operations after the budget carrier failed to secure a $500 million federal bailout.
Spirit Aviation Holdings, the airline’s parent company, said in a news release that it “regretfully announced” that it had “started an orderly wind-down of operations, effective immediately.” “All Spirit flights have been cancelled, and Spirit Guests should not go to the airport,” the airline said, adding that it would automatically process refunds for any flight purchased through the airline with a credit or debit card. The airline has set up a website, spiritrestructuring.com, to answer questions about the shutdown.
The Florida-based airline, which has filed twice for bankruptcy since 2024, recently faced surging jet fuel costs tied to the Iran war. Spirit said the “recent material increase in oil prices” and “other pressures on the business have significantly impacted Spirit’s financial outlook. With no additional funding available to the Company, Spirit had no choice but to begin this wind-down.”
The Trump administration’s proposed bailout would have given the U.S. government a 90% stake in the airline. Spirit’s cash reserves had dwindled in recent days as talks with the government broke down, according to multiple sources familiar with the discussions. Some of Spirit’s bondholders, including Ken Griffin’s Citadel and Ares Management Corp., had opposed the deal, U.S. officials previously told CBS News.
“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 Saturday’s 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.”
The broader airline industry is facing higher costs due to rising energy prices, prompting carriers to raise fares and cut unprofitable routes.
By the time of Spirit’s first bankruptcy filing in November 2024, the company had lost more than $2.5 billion since the start of 2020. In 2025, Spirit cut almost 4,000 jobs and 200 underperforming routes, ending the year with about 7,500 employees, including roughly 2,000 pilots and 3,000 flight attendants, according to its latest annual report. Spirit again filed for bankruptcy in August 2025 and disclosed in a regulatory filing that it had “substantial doubt” about its ability to continue operating.
Liquidating Spirit ends an airline known for its bright yellow planes and rock-bottom fares. The company traces its roots to 1983 when it was spun off from a trucking company. Initially called Charter One, it rebranded in 1992 as Spirit Airlines and moved to a “no frills” business model in 2007.
Trump administration officials were told Spirit would wind down operations within 24 hours, people familiar with the matter told CBS News, and the White House would not make a last-ditch effort to save the carrier. When asked about a bailout for Spirit on Friday, 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 Trump administration and Commerce Secretary Howard Lutnick for “their extraordinary efforts to try to preserve jobs and service across the country.”
Spirit flew to more than 40 U.S. cities, with a main hub at Fort Lauderdale-Hollywood International Airport, and operated international routes to the Caribbean and to Central and South America.
Edited by Aimee Picchi
The Associated Press contributed to this report.