Spirit Airlines ceased operations before dawn Saturday, canceling every remaining flight and putting 17,000 direct and indirect employees out of work after bondholders rejected an 11th-hour $500 million federal bailout that would have handed the U.S. government a 90 percent stake in the discount carrier. Flight NK1833, a Detroit-to-Dallas Fort Worth run, touched down shortly after midnight local time as the airline's last departure, according to the company and Flightradar24 data.
The shutdown ends a 34-year run for the Florida-based carrier known for its bright yellow planes and no-frills fares, and it marks the largest U.S. airline liquidation in two decades. The Trump administration had begun weighing a Defense Production Act rescue a week earlier, but talks unraveled as creditors led by Ken Griffin's Citadel and Ares Management Corp. balked at the terms and jet fuel prices, driven up by the Iran war, blew through the assumptions of Spirit's bankruptcy plan.
Fuel shock
Chief Executive Dave Davis said in the shutdown announcement that "the sudden and sustained rise in" fuel prices made it impossible to execute Spirit's reorganization. The carrier had built its restructuring around jet fuel at roughly $2.24 a gallon; by late April, prices had reached about $4.51 a gallon, according to Al Jazeera. Jet fuel costs have doubled in some markets since the United States and Israel attacked Iran on Feb. 28, CNBC reported.
Deutsche Bank forecasts that the U.S. passenger-airline industry's annual fuel bill will rise by $24 billion because of the energy shock, with carriers expected to recover only $14 billion through fares.
Bondholders walk
The White House proposal would have advanced $500 million in federal financing in exchange for 90 percent of the equity, leaving private creditors with a diminished stake in a company that had filed for Chapter 11 protection twice since November 2024. Citadel and Ares, two of the largest holders of Spirit debt, opposed the deal, CBS News reported. Spirit's lawyer, Marshall Huebner, told a New York bankruptcy court on April 23 that the airline's cash "is not going to last for very much longer."
Davis thanked the Trump administration and Commerce Secretary Howard Lutnick "in particular" for their efforts to keep the airline alive. The James St. Journal reported on April 25 that the administration was studying a Defense Production Act loan that could put the government in a controlling position; that track collapsed in the eight days that followed.
Rivals move in
United Airlines opened a webpage offering capped fares to displaced Spirit ticketholders. Southwest Airlines, JetBlue Airways and Delta Air Lines published reduced fares for stranded passengers. American Airlines, which serves 70 of the 72 airports Spirit flew from, said it was reviewing route additions and preparing a hiring page for laid-off Spirit workers.
Spirit's market share had already shrunk to 3.9 percent of U.S. passengers in February from 5.1 percent a year earlier, NPR reported, after the airline cut nearly 4,000 jobs and 200 routes in 2025. Industry analyst Shye Gilad told NPR that ultra-low-cost carriers "just don't have that anymore."
The pushback
Critics inside the administration and on Capitol Hill argued from the start that taxpayers had no business owning a serially bankrupt airline. Transportation Secretary Sean Duffy questioned the premise of the deal in remarks reported by Al Jazeera: "What would someone buy? If no one else wants to buy them, why would we buy them?" Lawmakers from both parties also panned the plan, PBS NewsHour reported, and bondholders objected that the federal terms wiped out their recoveries.
President Trump, speaking to reporters Friday before leaving for Florida, still framed the talks as live. "We're looking at it. If we could do it, we'll do it. But only if it's a good deal," he said. Hours later, the deal was dead. By Saturday morning, the Spirit app carried a different message: "We regret to inform you that all Spirit Airlines flights have been canceled, effective immediately."