Spirit Airlines is on the verge of shutting down after negotiations for a $500 million federal bailout fell apart. The airline has been grappling with mounting losses stemming from the lingering effects of the COVID-19 pandemic.
The proposed bailout would have handed the government majority ownership. Negotiations over the bailout unraveled in the final days of April 2026. If Spirit ends up in liquidation, it will be the first major US carrier to liquidate since the 2008 recession.
The company struggled to make a deal with its creditors and secure funding to maintain operations. Spirit operates key routes out of major California hubs like Los Angeles International Airport and John Wayne Airport.
High oil prices have pushed up the price of jet fuel. The company’s woes predated the war in Iran, as it has struggled to increase post-pandemic demand. Spirit Airlines has sought bankruptcy protection twice, with its most recent filing last year.
Donald Trump stated, “We gave them a final proposal.” The White House added that had the Biden administration not blocked the airline’s merger with JetBlue, “the company would be on a much firmer financial footing.”
No timeline has been shared for Spirit Airlines’ potential shutdown. The outcome of ongoing discussions regarding federal assistance is uncertain.
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