Bankrupt low-cost carrier, Spirit Airlines, is preparing to halt its operations around 9 a.m. (Israel time) on Saturday, according to two individuals familiar with the matter who spoke to Reuters late Friday.
A meeting of the airline’s board concluded without reaching a deal to save the company, one of the sources disclosed.
The anticipated shutdown is expected to lead to thousands of job losses and represents the first airline collapse partly linked to surging jet fuel prices during the ongoing Iran war, now in its second month.
The development also deals a setback to Donald Trump, who had put forward a $500 million rescue proposal for the airline despite resistance from some advisers and Republican lawmakers.
No U.S. airline of comparable size—at one point accounting for about 5% of domestic flights—has gone into liquidation in the past 20 years. Spirit had played a key role in keeping ticket prices competitive in markets dominated by larger carriers.
U.S. Transportation Secretary Sean Duffy told Reuters that efforts were made to find a buyer for the airline, but none emerged.
“What would someone buy?” Duffy asked. “If no one else wants to buy them, why would we buy them?”
According to one source, the company will now begin an orderly wind-down process, which includes suspending flights overnight, repositioning aircraft for return, and releasing flight crews.
“The Trump Administration made an extraordinary effort to try and save Spirit, but you can’t breathe life into a corpse. Given that, the company should make its intentions clear for the sake of its customers and employees,” a creditor close to the deal said.
A spokesperson for the airline declined to comment on the ongoing situation.
Trump stated on Friday that the White House had presented a final proposal to Spirit and its creditors in a last attempt to prevent the shutdown.
Officials have also reached out to other carriers to help accommodate stranded passengers. United Airlines, American Airlines, Frontier Airlines, and JetBlue Airways confirmed they are preparing to assist customers affected by the disruption.
Sara Nelson, president of the Association of Flight Attendants, said the airline’s future ultimately depends on Trump and warned that a shutdown could result in nearly 20,000 job losses. “If you’re in charge, POTUS, then make it happen now,” she said on X.
Trump had earlier indicated that his administration was considering acquiring the struggling airline at what he described as the “right price.”
Sources said the proposed bailout involved $500 million in financing in exchange for warrants equivalent to 90% of the airline’s equity.
However, internal disagreements within the administration over the structure and viability of the rescue plan complicated negotiations, according to reports citing people familiar with the discussions.
Not all of Spirit’s bondholders supported the proposed arrangement.
Shares of the airline, which trades over the counter, dropped 25% on Friday. Meanwhile, competitors saw gains, with Frontier rising 10% and JetBlue increasing by 4%.
Spirit had previously reached an agreement with lenders aimed at exiting its second bankruptcy by late spring or early summer. Those plans were derailed after the war drove jet fuel prices sharply higher, disrupting cost forecasts and undermining its restructuring strategy.
The airline’s recovery plan had been based on projections of jet fuel averaging $2.24 per gallon in 2026 and $2.14 in 2027, according to disclosures made in March. By the end of April, however, fuel prices had surged to about $4.51 per gallon—roughly double the anticipated level.
