The budget carrier said it was still operating as usual as rescue talks continued.
DANIA BEACH, Fla. — Spirit Airlines was preparing to cease operations Friday after rescue talks with the federal government and some bondholders failed to produce a $500 million bailout deal, according to reports, while the bankrupt carrier said it was still operating as usual.
The fast-moving crisis put one of the nation’s best-known budget airlines near a possible collapse at the start of the summer travel season. Spirit has filed for bankruptcy twice in two years and has been trying to reorganize while facing heavy debt, higher fuel costs and pressure from creditors. President Donald Trump said Friday that his administration was still reviewing a possible taxpayer-funded deal, leaving the airline’s next step unclear.
The Wall Street Journal reported Friday that Spirit was preparing to wind down operations after it could not line up enough support for a rescue package involving the government and bondholders. Reuters reported that a Spirit spokesperson declined to discuss ongoing talks and said, “Spirit is operating as usual.” A planned rescue hearing set for Thursday, April 30, did not take place as talks continued. The carrier’s future had already been in doubt after weeks of warnings about its cash position and its ability to keep flying without new financing.
The proposed deal under discussion called for about $500 million in financing from the Trump administration in exchange for warrants equal to as much as 90% of Spirit’s equity. The plan would have made the government a major force in the airline’s restructuring and could have put taxpayers ahead of other creditors in repayment. CBS News reported this week that some bondholders objected to the proposal, while other creditors had supported parts of it. The White House said it was monitoring the health of the aviation industry and looking at options for passengers and airline workers.
Trump told reporters Friday that his administration had given Spirit “a final proposal” and expected to make an announcement Friday or Saturday. “We’re looking at it. If we could do it, we’ll do it. But only if it’s a good deal,” Trump said before leaving the White House for Florida. He said he wanted to save jobs at the airline, which has about 14,000 workers, but added that the government’s interests would come first. The White House did not give full terms of the proposal, and Spirit did not confirm that a shutdown decision had been made.
Spirit’s problems deepened after fuel costs rose sharply and threw off the assumptions behind its restructuring plan. In March, Spirit said it had reached a restructuring support agreement and plan of reorganization that would reduce debt and lease obligations from about $7.4 billion before its filing to about $2 billion after emergence. The airline said then that it planned to rightsize its fleet to 76 to 80 planes by the third quarter of 2026 and continue adding premium seating options while trying to keep its low-fare model intact.
Those plans depended on lower fuel prices and new creditor support. Reuters reported Friday that Spirit had built its turnaround plan on jet fuel costs averaging about $2.24 per gallon in 2026 and $2.14 in 2027, but prices had climbed to about $4.51 per gallon by late April. The higher costs followed turmoil tied to the war in Iran and hit budget carriers especially hard. Spirit’s ultra-low-cost model relies on lean operations, cheap base fares and fees for extras such as bags and seat choices, leaving less room to absorb sudden cost spikes.
The crisis follows years of setbacks for Spirit. The airline filed for bankruptcy protection in November 2024, emerged from that process, then returned to Chapter 11 in 2025 after its financial position worsened again. A planned $3.8 billion merger with JetBlue Airways collapsed after a federal judge blocked the deal on antitrust grounds in 2024. Frontier Airlines had also pursued a deal with Spirit earlier in the company’s decline. Without a merger, Spirit was left to cut costs, shrink its fleet and seek new financing while trying to hold on to passengers in a competitive market.
Spirit’s possible exit would mark a major turn for a carrier that helped reshape U.S. air travel by pushing low base fares and charging separately for many services. The airline serves destinations across the United States, Latin America and the Caribbean with an all-Airbus fleet. It opened its Spirit Central corporate campus in Dania Beach, Florida, in 2024, a move meant to support training, operations and office work. The company has said guests can continue to book, travel and use tickets, credits and loyalty points during the restructuring process.
Shares of rival airlines moved higher after reports of Spirit’s possible shutdown. Reuters reported that Frontier Airlines and JetBlue Airways rose after the news, reflecting investor expectations that competitors could gain passengers if Spirit leaves the market or cuts deeper. The effect on travelers remained uncertain Friday because Spirit had not announced a final shutdown date or a formal liquidation plan. Any sudden stop in operations would create questions over tickets, routes, refunds, aircraft leases and employee jobs, all of which would need to be sorted through bankruptcy proceedings.
The case remained fluid Friday afternoon, with Spirit still flying and Trump saying a federal deal remained possible. The next key milestone is the administration’s expected announcement Friday or Saturday on whether it will move ahead with a rescue package or leave Spirit to pursue other options in bankruptcy court.
Author note: Last updated May 1, 2026.