Spirit Airlines shutting down after rescue talks collapse
The budget airline was in talks with the US government about a rescue deal which would have saved it from collapse.But discussions collapsed and the carrier said in an announcement on its website on Saturday that with "great disappointment" the airline had "started an orderly wind-down of our operations, effective immediately".Spirit was emerging from its second bankruptcy filing in recent years before the US-Israel war in Iran, but the resulting surge in jet fuel costs pushed it over the brink.All upcoming flights with Spirit have been cancelled.In Saturday's statement, the airline said it would automatically process refunds for any flights purchased through Spirit with a credit or debit card to the original form of payment. Guests who booked flights via a travel agent should contact the travel agent directly to request a refund. Compensation for those who booked flights using a voucher, credit, airline points or any other method will be determined at a later date through the bankruptcy court process.The airline said it was unfortunately not able to reimburse guests for other related costs such as emergency hotel stays or replacement flights associated with cancelled trips. Fuel costs can make up as much as 40% of an airline's outgoings, and airlines have seen the cost of jet fuel double since the US and Israeli strikes began at the end of February.Savanthi Syth, airlines analyst at the investment bank Raymond James, said spiralling jet fuel costs in the wake of the Iran war had proved "the final nail in the coffin" for Spirit.Speaking to the BBC, Syth said the operator had shied away from the radical overhaul it needed during a 2024 bankruptcy procedure.Spirit had been in the process of making the changes it needed in its current bankruptcy process, scaling back the number of flights it was offering and aircraft it owned, she said.But its ability to survive the year was in question even before the Iran war, Syth added."If it wasn't for the fuel scenario, they would have been okay through the summer, beyond the summer I would have said it was still precarious."At the end of April, Spirit had been confident its rescue deal with the Trump administration was to be finalised imminently. But after that deal fell through, Trump on Friday told BBC partner CBS the airline had been offered "a final proposal" to keep it in business. The earlier plan, which would have seen the US government take effective ownership of as much as 90% of the airline, faced stiff opposition from Wall Street, Capitol Hill and even a member of Trump's own cabinet. Transportation Secretary Sean Duffy told Reuters a rescue would amount to tossing "good money after bad".Correction 02/05/2026: An earlier version of this story incorrectly stated the refund process for cancelled Spirit flights.
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