Spirit Airlines goes bust and cancels all flights after bailout talks fail

Spirit Airlines has ceased all operations with immediate effect after failing to secure a $500 million (£368 million) bailout from the Trump administration.

All upcoming Spirit flights have been cancelled and passengers have been asked to seek a refund if they booked through a third party.

All internal bookings will be refunded automatically.

The budget airline was in talks with the US Government about a potential rescue deal, but discussions collapsed, and the carrier broke the news on Saturday with “great disappointment”.

Compensation for flights booked with vouchers, credits, or airline points will be determined later through bankruptcy court proceedings.

Unfortunately, the airline said it was unable to reimburse guests for non-flight related costs such as emergency hotel stays or replacement flights associated with cancelled trips.

The shutdown follows years of financial struggle, including a failed merger with JetBlue in 2024 and two separate bankruptcy filings.

The "final nail in the coffin" was a massive surge in jet fuel costs—which doubled in early 2026— following the outbreak of the US-Israel war in Iran , according to Savanthi Syth, airlines analyst at the investment bank Raymond James.

The airline said on Saturday it had "started an orderly wind-down of our operations, effective immediately".

Airlines have seen the cost of jet fuel double since the US and Israeli strikes began in February, with costs making up as much as 40 per cent of Spirit’s outgoings.