Spirit Airlines is preparing to cease operations after a $500 million government rescue deal fell apart, The Wall Street Journal reports.

“The discount carrier hasn’t been able to get sufficient support between certain bondholders and the government to secure the funding to keep it in business, people familiar with the matter said,” the outlet wrote.

More from The Independent:

Without agreement from both groups, the airline could not secure the funding it needed to continue operations. As a result, people familiar with the situation tell the WSJ that Spirit is now preparing for the possibility that it will run out of cash and cease operations entirely, though the exact timeline remains unclear.

The Independent has contacted Spirit and the White House for comment.

Spirit has already spent much of the past 18 months in Chapter 11 bankruptcy protection as it faces the threat of liquidation over rising fuel costs caused by the Iran war, according to reports.

ADVERTISEMENT

The $500 million lifeline would have given the government a stake of up to 90% in the budget airline.

The deal would have potentially allowed the White House to “use part of the bankrupt carrier’s fleet for military missions,” the New York Post noted.

KTLA noted:

President Donald Trump had previously said he was weighing a taxpayer takeover of Spirit Airlines, with plans to resell the troubled carrier after oil prices decline.

“They have some good aircraft and good assets,” Trump said Thursday at an unrelated Oval Office event. “I’d love to be able to save those jobs. I’d love to be able to save an airline.”

Spirit, known for its ultra‑low fares and bare‑bones service, has been struggling to stay aloft amid mounting debt, rising costs and failed merger attempts. The airline filed for Chapter 11 bankruptcy protection in November 2024 and again in August 2025.

CBS News provided additional coverage:

What’s your take?

 

Join The Conversation. Leave a Comment.