politics
Spirit Airlines Files for Bankruptcy
The budget carrier announced an immediate orderly wind-down on Saturday after negotiations for a $500 million rescue deal failed. Jet fuel costs had doubled since the US-Israel war in Iran began at the end of February, delivering a final blow to the airline as it emerged from its second recent bankruptcy.
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Spirit Airlines announced on Saturday that it had started an orderly wind-down of its operations effective immediately. The carrier canceled all of its flights and posted a statement on its website early Saturday morning declaring the shutdown. "All Spirit flights have been cancelled, and Spirit Guests should not go to the airport," Spirit Airlines stated.
Spirit Airlines CEO Dave Davis said in the statement that in March 2026 the company reached an agreement with its bondholders on a restructuring plan that would have allowed it to emerge as a go-forward business. "However, the sudden and sustained rise in fuel prices in recent weeks has left us with no alternative but to pursue an orderly wind-down of the company," Dave Davis stated.
The collapse followed failed discussions with the US government about a $500m (£368m) bailout.
Spirit Airlines was in talks with the Trump administration about a $500 million bailout that would have seen the US government take effective ownership of as much as 90% of the airline. At the end of April, Spirit had been confident its rescue deal with the Trump administration was to be finalised imminently.
President Trump told CBS on Friday that the airline had been offered a final proposal to keep it in business.
Negotiations stalled over a proposed $500-million cash infusion in exchange for a majority stake. Transportation Secretary Sean Duffy told Reuters that a rescue would amount to tossing good money after bad. Duffy disputed the company's account in a news conference at Newark Liberty International Airport.
"Spirit was in dire straits long before the war with Iran," Transportation Secretary Sean Duffy stated. He added that Spirit's model wasn't working and that the war was not the impetus for its failure. The US-Israel war in Iran caused a surge in jet fuel costs.
Jet fuel costs have doubled since the US and Israeli strikes began at the end of February. Fuel costs can make up as much as 40% of an airline's outgoings. Spirit Airlines was emerging from its second bankruptcy filing in recent years before the war.
