A major airline, which operated more than 500 daily flights to 60 destinations, has been forced to shut down all operations after 34 years in business. American ultra-low-cost airline, Spirit Airlines, which had nearly 4,200 domestic flights scheduled between May 1 and May 15 alone, has ceased operations with immediate effect following the collapse of rescue negotiations with the Trump administration, it confirmed on Friday (May 1).
The budget airline had been seeking a $500million (£368milllion) US Government bailout to avoid closure. However, talks broke down, leaving the company with no viable path forward. In a statement posted to its website, Spirit expressed “great disappointment” and confirmed it had begun “an orderly wind-down of our operations, effective immediately”. The move will also result in around 15,000 members of staff being laid off.
The collapse has come amid soaring jet fuel prices, triggered by the US-Israel war in Iran. Spirit had been working through its second bankruptcy filing in recent years when the conflict erupted, sending aviation fuel costs soaring. Since the strikes began on February 28, jet fuel prices have doubled, with fuel expenses accounting for up to 40% of airline operating costs.
The budget carrier had been attempting to restructure during bankruptcy proceedings, reducing its fleet size and cutting back on routes, but the sudden fuel crisis proved insurmountable.
All scheduled Spirit flights have been cancelled, with passengers who paid by credit or debit card set to receive automatic refunds to their original payment method, the airline confirmed. Passengers who made bookings through travel agents must approach those agents directly to secure a refund.
However, customers who used vouchers, airline points or credits face an uncertain wait, with compensation to be determined through bankruptcy court proceedings at a later stage. The carrier also stated it cannot cover additional expenses incurred by stranded travellers, including emergency accommodation or replacement flights on other airlines.
Spirit Airlines operated scheduled flights throughout the US, the Caribbean and Latin America. In 2023, Spirit was the seventh-largest passenger carrier in North America and its largest ultra-low-cost carrier. The company started as Clippert Trucking Company in 1964. After going through several iterations, in May 1992, jet aircraft were brought into the fleet and its name was changed to Spirit Airlines.
Spirit filed for Chapter 11 bankruptcy in November 2024, emerged after financial restructuring in March 2025 and then filed again in August 2025.