Spirit Airlines has grounded its fleet and begun winding down operations after talks over a $500 million rescue package from the Trump administration collapsed, ending more than three decades of operations for the U.S. carrier.
Spirit Aviation Holdings said it had begun an “orderly wind-down of operations, effective immediately,” grounding all flights and canceling all remaining services. Customers were told not to go to the airport as the airline shut down after failing to secure additional liquidity to continue operating. About 15,000 staff are affected.
The ULCC had been aiming to exit Chapter 11 by early summer, but the outbreak of war involving Iran sent jet fuel prices sharply higher and put that plan at risk. As pressure mounted, the airline sought federal support and by late April was in “advanced discussions” with the Trump administration over potential rescue financing. But on May 2, Spirit said no additional funding was available and that it had “no choice but to begin this wind-down.”
“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,” Spirit President and CEO Dave Davis said.
“In March 2026, we reached an agreement with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business. However, 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,” Davis continued. “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.”
Spirit had been seeking a federal rescue package worth about $500 million, with the Trump administration weighing a loan package that could have given the U.S. government a substantial ownership stake. President Donald Trump said on May 1 that the administration had made Spirit a “final proposal,” but it is understood that negotiations broke down after the airline failed to secure support from key bondholders.
