Spirit Airlines shutting down after failed effort at government rescue deal - CBS News

Spirit Airlines announced early Saturday morning that it was ceasing operations after the budget carrier failed to secure a $500 million federal bailout.

Spirit Aviation Holdings, the airline's parent company, said in a news release that it "regretfully announced" that it had "started an orderly wind-down of operations, effective immediately."

"All Spirit flights have been cancelled, and Spirit Guests should not go to the airport," the airline said, adding that it would automatically process refunds for any flight that was purchased through the airline with a credit or debit card.

Department of Transportation Secretary Sean Duffy said Saturday that Spirit has a reserve fund to refund tickets to the original form of payment for travelers whose flights have been cancelled. People who booked with a third party, like a travel agent, should contact their point of purchase, Duffy said. The airline has set up a website to answer questions regarding the shutdown process.

Spirit's final flight landed overnight at Dallas-Fort Worth International Airport, where air traffic controllers said goodbye to the pilots.

Well, it was a pleasure working with you guys, and I wish you the best," an air traffic controller said in audio obtained from LiveATC.com.

"Thank you, thank you very much," a pilot responded.

Rising prices left "no choice," airline says

The Florida-based airline, which has filed twice for bankruptcy since 2024, recently faced surging costs in jet fuel due to the Iran war.

The "recent material increase in oil prices" brought on by the Iran war and "other pressures on the business have significantly impacted Spirit's financial outlook," the airline said in its statement. "With no additional funding available to the Company, Spirit had no choice but to begin this wind-down."

Duffy disputed this version of events, highlighting Spirit's bankruptcy filings.

"Spirit was in dire straits long before the war with Iran," Duffy said, adding that the airline's low-cost model "wasn't working."

By the time of Spirit's first bankruptcy filing in November 2024, the company had lost more than $2.5 billion since the start of 2020. In 2025, Spirit cut almost 4,000 jobs and 200 underperforming routes, ending the year with about 7,500 employees, including 2,000 pilots and 3,000 flight attendants, according to its latest annual report.

Spirit again filed for bankruptcy in August 2025 and disclosed in a regulatory filing that it had "substantial doubt" about its ability to continue operating.

The airline industry faces higher costs due to rising energy prices, prompting carriers to raise fares and cut unprofitable routes. A new Deutsche Bank forecast predicts U.S. passenger airlines' annual fuel bill increasing $24 billion, relative to a forecast made before the start of the Iran war. While the bank believes airlines will be able to generate $14 billion more in revenue to offset those costs, they predict airlines will earn $8.4 billion less than previously expected.

The Trump administration's proposed bailout would have given the U.S. government a 90% stake in the airline. Spirit's cash reserves had dwindled in recent days as talks with the government broke down, according to multiple sources familiar with the discussions. Duffy said President Trump "was like a dog on a bone trying to figure out a way to keep Spirit afloat," but that "in the end, a deal couldn't be reached."

Some of Spirit's bondholders, including Ken Griffin's Citadel and Ares Management Corp., had opposed the deal, U.S. officials previously told CBS News. Duffy said that a "creditor issue" ultimately prevented a rescue plan.

"The Trump administration made an extraordinary effort to try and save Spirit, but you can't breathe life into a corpse," a creditor of Spirit told CBS News.

A counterproposal from creditors was rejected by the government, CBS News previously reported. Spirit thanked creditors and financial stakeholders in a press release announcing the airlines' shuttering.

Liquidating Spirit will bring an end to an airline known for its bright yellow planes and rock-bottom fares. The company's roots go back to 1983, when the airline was spun off from a trucking company. Initially called Charter One, the airline rebranded in 1992 as Spirit Airlines and added more planes and routes. The company shifted to a "no frills" approach to travel in 2007, according to its union.