Spirit Airlines Faces Shutdown as Cash Runs Out and Federal Help Stalls

Spirit Airlines is preparing to shut down after the budget carrier ran out of money and a potential rescue from the Trump administration appears to be falling apart. According to a Wall Street Journal report, the company failed to reach a deal with its creditors or secure the funding needed to keep flying.

Earlier reports suggested the airline was close to liquidation, prompting the White House to explore a possible $500 million federal loan. President Trump said last week he was aware of the carrier’s troubles and floated the idea of the government buying it outright. “We’re thinking about doing it, helping them out, meaning bailing them out, or buying it,” Trump said, adding that the government could “sell it for a profit” once oil prices drop.

If Spirit does enter liquidation, it would be the first major U.S. carrier to do so since the 2008 recession. The airline, like many others, has been hammered by high oil prices driving up jet fuel costs. But Spirit’s problems go back further—it has struggled to revive demand after the pandemic.

In 2024, a federal judge blocked a proposed $3.8 billion merger between Spirit and JetBlue, ruling it would reduce competition and harm passengers. The White House has since argued that the airline would be in much better shape if the Biden administration hadn’t “recklessly blocked” that deal.

Spirit and the White House did not respond to requests for comment.