Spirit Airlines said it began an orderly wind down of operations effective immediately and that all flights have been canceled, with customer service no longer available, the carrier wrote in an online statement.
The airline had sought a federal lifeline and was reportedly in advanced talks about financing, but discussions collapsed when key terms and creditor agreement could not be finalized, the Wall Street Journal reported.
President Donald Trump had said his administration delivered a final proposal and that any rescue would proceed only if it was a good deal for the government, according to reporting and presidential remarks.
Impact And Reactions
Major carriers said they stood ready to help affected passengers, with American Airlines capping main cabin fares on overlapping routes and Frontier offering low-fare options to accommodate travelers, the companies said in public statements.
Labor groups and Spirit employees faced immediate uncertainty, with unions urging action to preserve jobs and the association representing flight attendants warning of broad harm to workers and consumers if the carrier shut down.
Reports from news outlets said the administration had proposed roughly $500 million in financing for the carrier in exchange for warrants equivalent to a large equity stake, but not all bondholders backed the offer and disagreements persisted inside the administration.
Industry analysts and bankruptcy experts noted Spirit had operated under heavy financial pressure, twice seeking Chapter 11 protection and carrying substantial debt balanced against assets, the Associated Press reported based on court filings.
Observers also linked recent spikes in operating costs to geopolitical developments that pushed jet fuel prices higher, which added pressure on Spirit’s cash flow and complicated its planned exit from bankruptcy, according to reporting.
Political reactions were mixed, with some lawmakers praising regulators who blocked prior consolidation and others urging a government rescue to save jobs, while the airline’s own social media had reassured customers even as negotiations continued.
