Spirit Airlines to cease operations after rescue plan fails

Spirit Airlines will stop all operations after a planned government rescue deal failed to materialise, forcing the airline to begin an immediate shutdown and leaving passengers stranded as its financial struggles come to a head.

In a statement released on Saturday, the airline said it had “started an orderly wind-down of our operations, effective immediately,” confirming that efforts to secure a $500 million (Sh64.8 billion) bailout from the administration of Donald Trump had collapsed.

The carrier had been in discussions with the US government over a possible lifeline that would have helped it stay afloat after months of financial pressure. At one stage, the deal was expected to involve the government taking control of a large stake in the airline, but it ran into opposition from investors, lawmakers, and senior officials.

Among those against the plan was US Transportation Secretary Sean Duffy, who warned that the proposal risked throwing “good money after bad,” further weakening support for the bailout.

The airline’s closure follows a difficult period marked by repeated bankruptcy filings and ongoing restructuring attempts. Spirit had been trying to stabilise its business by reducing flights and cutting down its aircraft fleet, but new financial pressures made recovery harder.

A sharp increase in jet fuel prices, linked to the US-Israel war in Iran, placed additional strain on the airline’s finances. Fuel can take up to 40 percent of an airline’s expenses, and the recent surge pushed costs to levels many carriers have struggled to manage.

Following the announcement, all upcoming flights have been cancelled. The airline said customers who paid using credit or debit cards will receive automatic refunds to their original payment method.

Passengers who booked through travel agents have been asked to contact them directly to arrange refunds.

For travellers who used vouchers, airline credits, or loyalty points, compensation will be handled later through the bankruptcy court process.

Spirit also said it will not cover extra expenses linked to the cancellations, including hotel stays or alternative travel arrangements.

Customer support services have been shut down, with passengers directed to the airline’s claims agent for any further inquiries.

Just days earlier, the airline had expressed confidence that a rescue agreement would be finalised by the end of April. However, the deal fell apart at the last minute. Trump later said the airline had been presented with “a final proposal” to keep it operating, but no agreement was reached.