Spirit Airlines is preparing to cease operations after talks over a proposed $500 million U.S. government rescue package failed to come together, according to a new Wall Street Journal report. The plan reportedly called for government financing in exchange for warrants representing up to 90% of the airline’s equity, but WSJ reported that some bondholders and members of the Trump administration were not aligned on the proposal.
Spirit’s financial position was further pressured by higher jet fuel prices, in addition to ongoing competition from larger carriers, lingering fallout from the COVID-19 pandemic and various mechanical issues that left parts of its fleet grounded. Spirit filed for bankruptcy protection in late 2024 and again last year. The airline had previously reached an agreement with lenders that was intended to support an exit from its second bankruptcy by late spring or early summer, but Reuters reported that a rise in fuel prices following the war in Iran affected the company’s cost projections.
It is not immediately clear when Spirit might stop flying or how customers would be affected. According to Cirium data cited by The New York Times, Spirit operated about 12,000 flights in April, down from about 25,000 flights during the same period two years earlier.