Spirit Airlines Preparing Shutdown as Government Bail Out Falls Apart

After an extended period of discussions with the federal government about a potential deal to keep Spirit Airlines operational, The Wall Street Journal reports that talks have fallen apart and, as a result, Spirit Airlines will be shutting down. 

Recapping How We Got Here

In April, it was revealed that Spirit Airlines could begin liquidating, as jet fuel costs were soaring along with other issues. However, shortly after that, President Donald Trump mentioned the federal government may be willing to help them, as Spirit Airlines employs well over 10,000 people. The conversations began, and, according to CNBC, the money under discussion was $500 million and an equity stake in the company. As the talks continued and the days passed, the company was running out of money.

“The cash actually available to Spirit to fund ongoing operations is not going to last for very much longer,” the airline's lawyer, Marshall Huebner, said. “So either new financing, either or both of new financing or access to almost $240 million of restricted cash, is absolutely essential. Round about, no later than the end of next week.”

While President Trump entertained the talks, some Republican lawmakers opposed the bailout, per The New York Times. 

Among them was transportation secretary Sean Duffy. 

“The question will be: Can we do anything to save Spirit and make it viable? Or would we be putting good money into a company that inevitably is going to be liquidated?" he said in an interview with CBS in April. 

Spirit Airlines Issues

Spirit Airlines has had several years of issues. The company was set to be acquired by JetBlue a few years ago, but a federal judge blocked the deal. From there, there was a recall of engines that affected more than a thousand Spirit Airlines aircraft. 

The company filed for bankruptcy twice in a year, and finally, with the war in the Middle East, jet fuel prices began to soar. Jet fuel is the second-highest cost for an airliner after labor. 

What's Next

With this news, it's unclear when the final Spirit Airlines flights will be. In April, it had 12,000 flights, down from 25,000 two years ago, according to aviation data firm Ciricum, the Times reported. 

The Times also reports that the airliner has lost billions of dollars since 2019.

Ultimately, regardless of when, Spirit Airlines will close down.