Spirit Airlines moves toward shutdown after rescue deal collapses: report

Spirit Airlines preparing to shut down

Spirit Airlines is preparing to shut down after failing to secure a $500 million bailout from the federal government. The airline is currently in its second bankruptcy. 

Spirit Airlines is preparing to cease operations after failing to secure a $500 million government lifeline, The Wall Street Journal reported, citing people familiar with the matter, while President Donald Trump says he’s still considering a taxpayer-funded takeover of the airline.

What they're saying:

"We’re looking at it. If we could do it, we’ll do it. But only if it’s a good deal," Trump told reporters on Friday as he prepared to leave the White House for a trip to Florida.

He didn’t offer any details about what proposal he was considering but said he’d like to save jobs at the airline, which has filed for bankruptcy twice in two years.

Trump said his administration gave Spirit "a final proposal" and would make an announcement Friday or Saturday."

"We’re looking at Spirit and if we can help them, we will. But we have to come first," he said.

Dig deeper:

The ailing budget carrier had sought to finalize a $500 million government lifeline before running out of cash, but failed to win enough support from certain bondholders and officials to secure the funding needed to stay afloat, the outlet reported, citing people familiar with the matter.

RELATED: Trump suggests bailout or merger as Spirit Airlines faces mounting costs

Spirit Airlines files for bankruptcy

Spirit Airlines said Monday that it has filed for bankruptcy protection and will attempt to reboot as it struggles to recover from the pandemic-caused swoon in travel, stiffer competition from bigger carriers, and a failed attempt to sell the airline to JetBlue. Al Root with Barron's joins LiveNOW's Andrew Craft to discuss.

The backstory:

Spirit has struggled with losses for years. The airline filed for Chapter 11 protection in November 2024 and again in August 2025. With the Iran war driving up jet fuel costs for all airlines, creditors earlier this month expressed doubts about Spirit’s ongoing viability, raising the possibility the airline recognized for its bright yellow planes would be forced to sell its assets and cease operating.

RELATED: Spirit Airlines’ $500 million rescue funding talks face setback

Spirit’s relatively young fleet has made it an attractive acquisition target. But previous buyout attempts from budget rivals like JetBlue and Frontier were unsuccessful both before and during Spirit’s first bankruptcy.

Trump weighed a taxpayer-funded takeover of Spirit Airlines with the intent of reselling the struggling budget carrier after oil prices drop.

The White House has attempted to blame Spirit’s predicament on the Biden administration, which in 2023 sued to stop JetBlue Airways from buying Spirit for $3.8 billion. A little more than a year before Trump replaced Joe Biden as president, a federal judge in Dallas blocked a proposed Spirit-JetBlue merger, saying it would drive up airfares for passengers.

White House weighs $500M Spirit Airlines bailout

The Trump administration is currently considering a $500 million rescue package for Spirit Airlines as the carrier teeters on the brink of collapse. LiveNOW's Anna Marsick discussed the potential deal with Nick Ewen, from The Points Guy. 

Where does Spirit Airlines operate?

Why you should care:

Spirit Airlines serves destinations across the United States, Latin America, the Caribbean, and South America. 

The airline operates more than 675 routes, primarily focusing on cities within the U.S. while also maintaining significant international service to countries such as Mexico, Colombia, and the Dominican Republic. Its key operating bases include Atlanta, Chicago O’Hare, Dallas/Fort Worth, Detroit, Fort Lauderdale—its largest hub—Houston, Las Vegas, Miami, Newark, and Orlando.