Archie MitchellEconomic journalist
Spirit Airlines is closing its doors after failing to secure a $500m (£368m) bailout from the Trump administration.
The budget airline was in talks with the US government over a bailout deal that would have saved it from collapse.
But talks broke down and the airline said in a statement on its website on Saturday that with “great disappointment” the airline had “begun an orderly cessation of our operations, effective immediately.”
Spirit was emerging from its second bankruptcy filing in recent years, before the U.S.-Israel war in Iran, but the resulting rise in jet fuel prices pushed it to the brink.
All upcoming Spirit flights have been canceled.
In Saturday’s release, the airline said it will automatically process refunds for any flights purchased through Spirit with a credit or debit card using the original payment method.
Customers who booked their flights through a travel agency should contact the travel agency directly to request a refund.
Compensation for those who booked flights using a voucher, credit, airline points or other method will be determined later through the bankruptcy court process.
The airline said it was unfortunately unable to reimburse customers for other related costs such as emergency hotel stays or replacement flights associated with canceled trips.
Fuel costs can account for up to 40% of an airline’s expenses, and airlines have seen the cost of jet fuel double since U.S. and Israeli strikes began in late February.
Savanthi Syth, an airline analyst at investment bank Raymond James, said skyrocketing jet fuel costs following the Iran war had been “the final nail in the coffin” for Spirit.
Speaking to the BBC, Syth said the operator had avoided the radical overhaul it needed during bankruptcy proceedings in 2024.
Spirit was making necessary changes in its current bankruptcy process, reducing the number of flights it offered and the number of planes it owned, she said.
But its ability to survive the year was in question even before the Iran war, Syth added.
“Without the fuel scenario, everything would be fine all summer. Beyond the summer, I would have said it was still precarious.”
By late April, Spirit was confident that its bailout deal with the Trump administration would be finalized imminently.
But after that deal fell through, Trump told BBC partner CBS on Friday that the airline had been offered “a final proposal” to keep it in business.
The previous plan, which would have seen the US government take 90% ownership of the airline, faced stiff opposition from Wall Street, Capitol Hill and even a member of Trump’s cabinet. Transportation Secretary Sean Duffy told Reuters a bailout would be like throwing “good money after bad money.”
Correction 02/05/2026: An earlier version of this story incorrectly stated the refund process for canceled Spirit flights.