Spirit Airlines is preparing to cease operations as a potential government bailout seems to be falling apart, according to a new report.
Citing people familiar with the business, The Wall Street Journal detailed that the company has not been able to get support of bondholders and the government to secure funding to stay in business.
CBS News had already noted on Thursday that even if there was a proposal, any deal needs to get approved by Spirit's creditors, some of whom are wary of a bailout.
Citadel, owned by Ken Griffin, submitted a counterproposal that was rejected by the government. Two others are also opposed, according to the outlet, as becoming the senior bondholder would allow the government to get paid before others.
President Donald Trump had confirmed he was considering the possibility, saying the government could later sell the company for a profit.
Speaking during an unrelated Oval Office event, Trump said the company has "some good aircraft and good assets." "When the prices of oil goes down, we'll sell it for a profit," Trump added.
Trump went on to say that if the administration "could get it for the right price," he'd "do it to save the jobs."
Spirit has been struggling to exit Chapter 11 bankruptcy for the second time in under a year. The airline initially filed for bankruptcy protection in November 2024 after reporting heavy losses and debt pressure, and again in 2025 following a failed restructuring attempt.
According to another report by The Wall Street Journal, rising jet fuel prices have significantly undermined Spirit's turnaround plan. The publication reported that the surge in fuel costs, linked in part to geopolitical tensions, has increased operating expenses to a level that some creditors believe makes the current restructuring plan unworkable.
The possibility has led others to also ask the government for a bailout. The Association of Value Airlines (AVA), a trade organization for value airlines, said that its members were working collaboratively and looking for help from the Trump administration. Last week, member air carriers, which include Spirit, Frontier, Avelo Air, Allegiant Air, and Sun Country, met with Transportation Secretary Sean Duffy.
AVA says that it has asked for the creation of a $2.5 billion liquidity pool to be used only to offset "incremental fuel costs, as a necessary and targeted measure to stabilize operations and keep airfares affordable."
Among the arguments the AVA makes is that market intervention by the government to preserve competition during a crisis is not without precedent. "The market dominance of the country's biggest airlines has never been greater, and smaller value airlines are disproportionately impacted by higher fuel prices," the AVA said.
Originally published on IBTimes
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