Spirit says it is shutting down and ceasing operations immediately
· Business Insider
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- The ultra-low-cost airline announced it is shutting down after nearly 50 years.
- A proposed bailout fell through. The US government offered $500 million in exchange for a 90% stake.
- Spirit said it would automatically process refunds for flights bought with a credit or debit card.
After two bankruptcies and a failed federal bailout, Spirit Airlines is out of moves.
The ultra-low-cost airline announced early on Saturday that it is shutting down and ceasing operations immediately.
"All Spirit flights are cancelled and customer service is no longer available," the airline said on its website. It said customers booked on flights should not go to the airport.
Directing travelers to links offering advice and information, it said: "Thank you for choosing Spirit — we are grateful to all our Guests who flew with us over the past 34 years."
The collapse comes after a proposed $500 million bailout from the Trump administration in exchange for an up to 90% stake fell through.
As far as refunds, flyers with tickets may not be totally out of luck.
A company document shows Spirit's credit card processor has been holding up to $3 million a day since August in the event of a collapse, meaning those with canceled tickets should be able to get their money back.
In its advice to customers, Spirit said: "While we are not able to help rebook your flight on another airline, we will automatically process refunds for any flights purchased through Spirit with a credit or debit card to the original form of payment.
"Guests who booked flights via a travel agent should contact the travel agent directly to request a refund. Compensation for Guests who booked flights using any other methods, including a voucher, credit or Free Spirit points, will be determined at a later date through the bankruptcy court process."
Credit card holders may be able to do a chargeback if the refund from Spirit falls through. It's unclear how long the refunds will take.
Any spent points are likely gone, as without Spirit, they're worthless.
Spirit's President and CEO, Dave Davis, referred to a March agreement "with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business."
He added: "However, the sudden and sustained rise in fuel prices in recent weeks ultimately has left us with no alternative but to pursue an orderly wind-down of the Company. Sustaining the business required hundreds of millions of additional dollars of liquidity that Spirit simply does not have and could not procure."
Spirit's collapse comes after decades of flying bare-bones planes to leisure destinations across the US and Latin America.
It was consistently profitable before the pandemic, but rising labor and operating costs post-COVID, mixed with changing traveler habits and the oil crisis amid the war in Iran, proved too much to bear.
The airline tried to adapt to the premium demand trend, as flyers are increasingly willing to pay extra for greater comforts in the sky.
It added extra legroom seats and a refreshed "first class" experience, but it still never offered long-haul international routes or the fancy airport lounges its legacy rivals could curate.
Its departure means customers no longer have access to the rock-bottom fares it's famous for. Its key leisure routes to places like Florida, Las Vegas, and the Caribbean may see fare increases since Spirit is no longer present to pressure prices downward.
A fare analysis previously conducted by Business Insider shows Spirit's exit from dozens of routes in 2024 and 2025 pushed fares up by roughly 14%. Some shot up more than $100.
President Donald Trump has taken the unprecedented step of having the government pursue a range of investments and equity stakes in private companies, but Spirit was in some ways different. The government has taken stakes in companies extracting critical materials or producing essential components, such as the rare-earth producer MP Materials, the mining company Lithium Americas Corp. and chipmaker Intel.
"It's 14,000 jobs," Trump said Friday in response to a reporter's question. "I would say we're driving a tough deal but it's one of those things. We'll do it or we won't."
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