By Chris Isidore, CNN
(CNN) — Spirit Airlines is set to announce in the coming hours that it will halt flying as of 3 am ET Saturday, according to two sources familiar with its plans, making it the first significant US airline to halt operations in nearly 25 years.
The shutdown comes as soaring jet fuel prices derailed its plans to emerge from its second bankruptcy. Efforts to reach a deal with the Trump administration on an 11th-hour rescue package that was also acceptable to a key group of creditors proved unsuccessful Friday.
The decision will leave millions of passengers holding Spirit tickets in coming months scrambling to make other travel arrangements and put 17,000 Spirit employees out of a job. Eliminating the airline’s flights is also likely to raise fares across the entire US airline industry.
As of just before midnight ET Friday, the airline still did not have a statement confirming the shutdown plans.
An attorney for Spirit told a bankruptcy court last week that the airline was in “very advanced discussions” with the administration on a rescue package.
But a key group of creditors did not agree to the that plan, according to a source familar with negotiations. Those creditors balked at the package that reportedly would have given the government control of the overwhelming majority the airline’s shares.
Earlier in the day Friday President Donald Trump seemed to back away from his earlier support of a rescue package for the airline, or possibly even a government purchase.
“Well, we’re looking at it — but if we can’t make a good deal, no institution’s been able to do it,” Trump said on Friday. “I’d like to save the jobs, but we’ll have an announcement sometime today. We gave them, we gave them a final proposal.”
Rising fuel costs the final blow
All air carriers have been struggling with higher jet fuel costs, which have nearly doubled since the start of the war in Iran. Jet fuel is the second greatest cost for airlines, behind only labor.
To help compensate, airlines have been raising fares and increasing fees, such as for checked bags. But fierce competition for travelers has kept them from passing along all of the costs to customers. And discount carriers like Spirit have a harder time raising fares due to their dependence on bargain-hunting customers.
Spirit has about 9,000 flights scheduled from May 2 through the end of the month, according to aviation analytics firm Cirium. Those flights have a total of 1.8 million seats. So that’s an average of about 300 flights and 60,000 potential passengers a day affected in just the next month.
What happens to passengers?
Passengers with tickets for upcoming Spirit flights should be able to get their money back by filing a claim with the issuer of the credit or debit card used to purchase the tickets. Those who paid cash, however, have now become Spirit’s creditors. That means they’ll have to wait to be reimbursed with everyone the company owes money.
As of 1 am ET Saturday there was still no word from the airline about its decision to shut down. Its site was still allowing passengers to search for flights to book. But its employees were getting word of the loss of their jobs. The leadership of the Association of Flight Attendants at Spirit sent a message out to the union’s 5,000 members at the airline about 1 am stating, “We are delivering the hardest news of our lives that Spirit will permanently cease operations at 3:00 AM Eastern Time on May 2.”
For those passengers in the middle of a trip, they must now find a seat on another airline. Last-minute “walk-up” fares are the most expensive in the industry.
While Trump last week signaled his approval, the idea of a bailout for a single airline sparked backlash from both the airline industry and among Republican members of Congress.
Spirit ranked as the eighth-largest US airline in 2025 by the number of seats offered. The airline was a pioneer in offering ultra-low base fares in the US, charging extra for things like carry-on bags. That model pushed fares lower, even for passengers on other carriers and prompted larger airlines to offer cheap “basic economy” tickets.
Fares across the industry have risen this year due to the spike in jet fuel prices. Removing the 2% of domestic US flights Spirit is scheduled to fly this summer will push fares up even higher.
Losses go back years
But Spirit has been unprofitable since travel plunged shortly after the start of the Covid pandemic, warning repeatedly in recent years there was “substantial doubt” over its ability to continue flying. Spirit has filed for bankruptcy twice, most recently in August 2025.
Spirit announced it had reached a deal with its creditors in February to emerge from its latest bankruptcy with less debt and the ability to keep flying. But three days later, the war in Iran started, choking off about 20% of the world’s oil supply and sending jet fuel prices soaring.
Bankruptcies are common in the airline industry, which is a capital-intensive business. Companies deal with massive costs for aircraft and labor, as well as the wild swings in the price of fuel and demand for travel. Even in the best of times, airlines can run on thin margins. Eight major US airlines have filed for bankruptcy over the past 25 years.
In many cases, bankrupt airlines are purchased by solvent rivals, which has led to widespread consolidation. Four major carriers – United, American, Delta and Southwest – now control about 80% of flights available to passengers.
But an airline completely shutting down is far less common. Spirit’s closure is the first shutdown of a significant US airline since Midway Airlines went out of business immediately following the September 11, 2001 attacks.
This is a developing story. It will be updated.
CNN’s Donald Judd and Ramishah Maruf contributed to this report.
The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
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