Spirit Airlines could cease operations as early as Saturday morning unless a last-minute rescue agreement is reached, after negotiations over a government-backed bailout appeared to stall.
US President Donald Trump said on Friday that the White House had presented what he described as a final proposal aimed at saving the bankrupt low-cost carrier. Speaking to reporters, Trump said his administration was willing to assist if a viable agreement could be reached.
“We’re looking at Spirit. If we can help them, we will,” Trump said. “But only if it’s a good deal.”
He added that an announcement was expected later in the day.
According to sources familiar with the matter, Spirit’s board met after markets closed on Friday to consider whether to approve a shutdown. If authorised, the airline could halt operations as early as 3 a.m. Saturday local time. The move would mark the first major airline collapse linked to the economic fallout from the Iran conflict.
Spirit has been in talks with creditors over a proposed $500 million government rescue package. The plan reportedly included federal financing in exchange for warrants representing up to 90% of the company’s equity. However, discussions have been complicated by resistance from some bondholders and differing views within the administration over the terms of any bailout.
A rescue hearing scheduled for Thursday was postponed as negotiations continued.
If Spirit shuts down, the airline would carry out an orderly wind-down, including cancelling flights overnight, repositioning aircraft for return, and sending crews home. A company spokesperson said Spirit was continuing normal operations while discussions remained ongoing.
The White House has already begun coordinating with other airlines to minimise disruption for travellers. United Airlines, American Airlines, Frontier Airlines and JetBlue Airways have all indicated they are prepared to accommodate stranded Spirit passengers. American has also capped fares on routes where it competes directly with Spirit.
Labour groups have warned of significant job losses. Sara Nelson, president of the Association of Flight Attendants, said a shutdown could affect nearly 20,000 workers.
Spirit had been working toward emerging from its second bankruptcy later this year after previously reaching an agreement with lenders. Those plans were derailed by a sharp rise in jet fuel prices following the outbreak of war in the Middle East.
The airline had based its restructuring on fuel prices averaging around $2.24 per gallon in 2026. By late April, however, prices had surged to roughly $4.51 per gallon, dramatically increasing operating costs and undermining its recovery strategy.
Spirit’s shares fell 25% in over-the-counter trading on Friday, while shares of rival carriers rose as investors anticipated a redistribution of market share should the airline cease operations.
