Spirit Airlines has announced it is shutting down with immediate effect after talks with the Trump administration over a $500 million bailout collapsed. The budget carrier, which filed for its second bankruptcy in recent years, blamed soaring jet fuel costs linked to the US-Israel conflict in Iran for its demise.
"With great disappointment, the airline has started an orderly wind-down of our operations, effective immediately," Spirit said in a statement on Saturday.
All scheduled flights have been canceled. The airline stated it will automatically refund tickets purchased via credit or debit card to the original payment method. Passengers who booked through travel agents should contact them directly for refunds. Compensation for bookings made with vouchers, points, or other methods will be determined later through bankruptcy court proceedings.
Spirit noted it cannot reimburse customers for related costs such as emergency hotel stays or alternative flights. Customer service is no longer available, but passengers can direct inquiries to the carrier's claims agent.
Fuel costs typically account for up to 40% of an airline's expenses. Jet fuel prices have doubled since the outbreak of hostilities in late February, according to industry analysts. Savanthi Syth, an airlines analyst at Raymond James, described the fuel crisis as "the final nail in the coffin" for Spirit. She noted that the airline had avoided necessary restructuring during its 2024 bankruptcy and was already struggling to survive beyond the summer even before the Iran war.
The failure of the rescue talks came after the US government proposed taking up to 90% ownership of the airline—a plan that faced strong opposition from Wall Street, lawmakers, and even Transportation Secretary Sean Duffy, who called it "good money after bad." Trump confirmed on Friday that a final offer had been made but rejected.
Spirit had been cutting flights and reducing its fleet during its latest bankruptcy process, but the surge in fuel costs proved insurmountable. The broader aviation industry is also feeling the pressure, with some airlines reducing services and hiking fares, while the International Energy Agency has warned Europe could run out of jet fuel within six weeks.