Spirit Airlines shuts down after failing to reach a bailout deal, ending discount travel era

Spirit Airlines has shut down.

Before dawn Saturday, the carrier ceased operations after failing to secure an agreement with bondholders on an 11th-hour bailout from the Trump administration.

That sealed the fate of the iconic U.S. budget airline known for its bright yellow planes, cheap fares and no-frills service and fees for everything else that had become a punchline though it had pioneered discount air travel in the U.S. and made flights more affordable for millions.

"We regret to inform you that all Spirit Airlines flights have been canceled, effective immediately," read a message when opening Spirit's app.

Grasping for a chance at survival in its second bankruptcy filing since November 2024, Spirit's shuttering marks the end of the South Florida airline's yearslong struggle with a host of problems: a failed merger, shifting consumer tastes, surging competition and soaring costs — most recently for jet fuel.

Spirit said 17,000 direct and indirect employees have lost their jobs.

Time had been running out. The airline's lawyer, Marshall Huebner, told a bankruptcy court in New York on April 23 that Spirit's cash "is not going to last for very much longer."

The airline said it will automatically refund flights purchased through Spirit with a credit card or debit card. (Read more about next steps here.)

For years, Spirit kept competitors on their toes with its low fares and was profitable until fast growth, escalating costs and other challenges caught up to it after the pandemic. Experts said its shuttering could lead to higher fares in some markets, though the carrier had drastically reduced service in recent months. Other airlines are likely to add more flights at airports that Spirit serves.

Spirit's NK1833, a two-hour and 39-minute flight from Detroit to Dallas Fort Worth Airport, was its last that touched down shortly after midnight local time, according to the company and Flightradar24 data. It flew more than 50,000 people over the past day, Spirit said.

"For more than 30 years, Spirit Airlines has played a pioneering role in making travel more accessible and bringing people together while driving affordability across the industry," Dave Davis, Spirit's chief executive, said in Spirit's shutdown announcement.

Davis thanked the Trump administration and, "in particular," Commerce Secretary Howard Lutnick, for their efforts to save the airline.

Earlier, people familiar with the matter said the budget airline was preparing to shut down after it failed to reach a deal for a lifeline. The sources requested anonymity because they weren't authorized to speak about the discussions.

The airline had expected to emerge from bankruptcy protection midyear before the jump in fuel prices but still had many of the same problems. Jet fuel costs have doubled in some places since the U.S. and Israel attacked Iran on Feb. 28.

Davis said that the "sudden and sustained rise in fuel prices in recent weeks ultimately has left us with no alternative but to pursue an orderly wind-down of the Company.

"Sustaining the business required hundreds of millions of additional dollars of liquidity that Spirit simply does not have and could not procure. This is tremendously disappointing and not the outcome any of us wanted," he said.

Spirit also said it had hoped to work with its vendors for the long term.

"We are committed to working with our vendors through the wind-down process and will be in touch in the coming days to discuss next steps. Any outstanding claims will need to be addressed through the bankruptcy process," Spirit said. It added that vendors will receive direct communication from courts.

Last month, the Trump administration offered a $500 million loan that could have given the government up to a 90% stake in the Florida-based airline. But talks with bondholders for a government bailout this week failed to yield a deal.

Some opposition to the deal emerged, including from Republicans and Transportation Secretary Sean Duffy, who told Reuters last month: "What we don't want to do is ‌put good money after bad, and there's been a lot of money thrown at Spirit, ‌and they haven't found their way into profitability," Duffy said in an interview with Reuters. "And so would we just forestall the inevitable and then own that?"

President Donald Trump said earlier Friday that his administration had extended a "final" bailout proposal, though bondholders and the government ultimately couldn't agree on the terms.

"I would say we're driving a tough deal, but it's one of those things we will do it, or we won't," Trump told reporters on Friday. "Seems like the other lenders are blocking. They think they'll get bumped down in priority."

"We come first," Trump said.

Other airlines said they plan to help fly Spirit customers and crews.

Southwest Airlines said it will offer discounted flights at airports on overlapping routes with Spirit. Flights up to 500 miles will cost $200, up to 1,000 miles will cost $300, and above 1,000 miles will cost $400, the carrier said.

United Airlines said it is also capping fares for Spirit customers at $299, but that most fares were priced at $199, and it gave stranded crew members instructions. American Airlines, JetBlue Airways and Frontier Airlines also planned rescue fares for Spirit travelers.

Spirit flew around 1.7 million U.S. domestic passengers, with a 3.9% market share in the U.S., as of February, according to aviation data firm Cirium. That was down from 5.1% market share last year, as the airline axed flights to cut costs.

As of Friday at 6:25 p.m., Spirit had 44 flights operating, according to Flightradar24, and was still showing fares and seats available on its website.