Spirit Airlines is preparing to cease operations after a $500 million government rescue deal collapsed. According to sources, the airline has been unable to secure sufficient support between bondholders and the government to obtain funding necessary for continued business. Without this agreement, Spirit faces the risk of running out of cash and shutting down entirely.
The budget carrier has spent much of the past 18 months in Chapter 11 bankruptcy protection as it battles mounting debt, rising operational costs, and failed merger attempts. Spirit filed for Chapter 11 bankruptcy initially in November 2024 and again in August 2025.
A proposed $500 million lifeline would have granted the government up to a 90% stake in the airline’s finances. The deal could have enabled federal authorities to utilize part of Spirit’s fleet for military missions.
President Donald Trump previously indicated he was considering a taxpayer takeover of Spirit Airlines with plans to resell the carrier once oil prices decline. He stated, “They have some good aircraft and good assets. I’d love to be able to save those jobs. I’d love to be able to save an airline.”