Spirit Airlines Ceases Flying After Federal Bailout Talks Collapse

Spirit Airlines said early Saturday that it has begun an orderly wind-down and canceled all flights, ending more than 30 years of service after talks on a federal rescue failed. CBS News reported that officials had been told the carrier would shut down within 24 hours and that sources expected no last-minute administration effort on a bailout.

In a statement, the airline’s parent, Spirit Aviation Holdings, said it has “no additional funding available” and told customers not to go to the airport. It blamed “the recent material increase in oil prices,” along with other business pressures, saying that keeping the airline running would have required “hundreds of millions of additional dollars of liquidity” it could not obtain. Chief executive Dave Davis called the outcome “tremendously disappointing and not the outcome any of us wanted.”

The company had reached a restructuring agreement with its bondholders in March that was meant to let it continue operating, according to its statement, but that plan did not stabilize its finances. CBS News reported that negotiations over a $500 million government aid package stalled after bondholders objected to the terms, and that the carrier’s cash was expected to last only a matter of days.

President Trump had said Friday that the administration was weighing a rescue. “Well, I guess we’re looking at it. If we can do it, we’ll do it but only if it’s a good deal,” he told reporters, according to CBS News. “I’d like to save the jobs, but we’ll have an announcement some time today,” he added, saying the administration had given the airline a “final proposal.” The airline’s chief executive thanked Commerce Secretary Howard Lutnick and the Commerce and Transportation departments in his statement, along with labor unions, aircraft lessors and financial backers including Citadel, Cyrus Capital and Ares Management.

The shutdown leaves ticket holders to rebook. Spirit said passengers who paid by credit or debit card directly with the airline will be refunded automatically to the original payment method, while those who booked through a travel agent must contact the agent. Compensation for vouchers, credits and Free Spirit loyalty points will be decided later through the bankruptcy process, the company said. Information is posted at spiritrestructuring.com.

Spirit served more than 40 U.S. cities as well as destinations in Central and South America, with its main hub at Fort Lauderdale-Hollywood International Airport in Florida, CBS News reported. At its headquarters in Dania Beach, Florida, employees waited Friday for word on their jobs; CBS News said no official communication about next steps had been sent to staff, and one employee told the network, “Everybody knows.” The company’s statement gave no figure for the number of jobs affected.

Industry experts told CBS News that the exit of a low-fare carrier would ripple through commercial aviation and would likely raise fares. Spirit pointed to higher oil prices, which have climbed during the war with Iran, and CBS described it as an already bankrupt airline.