Spirit Airlines is preparing to cease operations after failing to secure a $500 million government lifeline, marking the end of the low-cost carrier known for its bright yellow planes.
The airline, currently in its second bankruptcy, had sought to finalize the bailout before running out of cash but failed to win enough support from certain bondholders and officials to secure the funding needed to stay afloat.
Spirit has struggled with losses for years. The airline filed for Chapter 11 protection in November 2024 and again in August 2025. With the Iran War driving up jet fuel costs for all airlines, creditors earlier this month expressed doubts about Spirit’s ongoing viability, raising the possibility that the airline would be forced to sell its assets and cease operating.
Spirit’s relatively young fleet has made it an attractive acquisition target. However, previous buyout attempts from budget rivals like JetBlue and Frontier were unsuccessful both before and during Spirit’s first bankruptcy.
President Trump weighed a taxpayer-funded takeover of Spirit Airlines with the intent of reselling the struggling budget carrier after oil prices dropped. The White House has attempted to blame Spirit’s predicament on the Biden Administration, which in 2023 sued to stop JetBlue Airways from buying Spirit for $3.8 billion — a little more than a year before President Trump replaced Joe Biden as president. A federal judge in Dallas blocked the proposed Spirit-JetBlue merger, saying it would drive up airfares for passengers.
The airline has struggled with losses, bankruptcies, rising fuel costs, failed mergers, and political disputes.
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