Spirit Airlines is permanently shutting down all operations as of 3:00 AM ET today, May 2, 2026. A last-minute government bailout deal with the Trump administration collapsed Friday after key creditors rejected a plan that would have granted the government majority control.

The shutdown results in the immediate loss of 17,000 jobs and leaves 1.8 million passengers scrambling for travel alternatives this month alone. 

Soaring jet fuel prices, which doubled following the start of the war in Iran, derailed Spirit’s attempts to emerge from its second bankruptcy.

Spirit will automatically refund tickets purchased via credit or debit cards. Passengers who paid with cash, vouchers, or loyalty points must seek reimbursement through bankruptcy court, as they are now considered company creditors. 

The airline will not reimburse passengers for incidental costs resulting from the cancellations.

Jet fuel prices nearly doubled following the start of the war in Iran, which cut off 20% of the world’s oil supply. As the second-highest cost for airlines, the fuel spike overwhelmed Spirit’s low-cost business model, one that relied on bargain-hunting customers sensitive to fare increases.

The company said: “Spirit is unfortunately not able to reimburse Guests for incidental travel costs associated with cancelled trips. If you purchased travel insurance, check with your carrier to see if these expenses may be covered under your plan.”

President Trump initially considered a rescue package or government purchase but ultimately withdrew support after failing to reach a good deal and facing backlash from Congress.

This marks the first total shutdown of a major US airline since Midway Airlines in 2001. As the 8th largest US carrier, Spirit’s exit is expected to drive industry-wide airfares higher due to decreased competition. 

Spirit has been unprofitable since the COVID-19 pandemic and had previously filed for bankruptcy as recently as August 2025.

Although a deal with creditors was reached in February 2026 to restructure debt, the onset of the war in Iran three days later rendered the recovery plan impossible.