Spirit Airlines shutting down after rescue talks collapse

Spirit Airlines is shutting down as a business after failing to secure a $500m (£368m) bailout from the Trump administration.

The budget airline was in talks with the US government about a rescue deal which would have saved it from collapse.

But discussions collapsed and the carrier said in an announcement on its website on Saturday that with "great disappointment" the airline had "started an orderly wind-down of our operations, effective immediately".

Spirit was emerging from its second bankruptcy filing in recent years before the US-Israel war in Iran, but the resulting surge in jet fuel costs pushed it over the brink.

All upcoming flights with Spirit have been cancelled, while those with tickets are not expected to be refunded as part of the winding down process.

Customers with outstanding tickets may be able to claim refunds via their credit card companies for flights which are not honoured.

Spirit's customer service is also no longer available, the airline said early on Saturday.

Fuel costs can make up as much as 40% of an airline's outgoings, and airlines have seen the cost of jet fuel double since the US and Israeli strikes began at the end of February.

Savanthi Syth, airlines analyst at the investment bank Raymond James, said spiralling jet fuel costs in the wake of the Iran war had proved "the final nail in the coffin" for Spirit.

Speaking to the BBC, Syth said the operator had shied away from the radical overhaul it needed during a 2024 bankruptcy procedure.

Spirit had been in the process of making the changes it needed in its current bankruptcy process, scaling back the number of flights it was offering and aircraft it owned, she said.

But its ability to survive the year was in question even before the Iran war, Syth added.

"If it wasn't for the fuel scenario, they would have been okay through the summer, beyond the summer I would have said it was still precarious."

At the end of April, Spirit had been confident its rescue deal with the Trump administration was to be finalised imminently.

But after that deal fell through, Trump on Friday told BBC partner CBS the airline had been offered "a final proposal" to keep it in business.

The earlier plan, which would have seen the US government take effective ownership of as much as 90% of the airline, faced stiff opposition from Wall Street, Capitol Hill and even a member of Trump's own cabinet. Transportation Secretary Sean Duffy told Reuters a rescue would amount to tossing "good money after bad".