Spirit Airlines Preparing to Shut Down After Failed Bailout Talks

Spirit Airlines is preparing to shut down after the iconic budget airline failed to reach a deal for a lifeline, according to people familiar with the matter. The carrier could shut down as early as 3 a.m. ET, sources told CNBC. The people requested anonymity because they weren't authorized to speak about the discussions.

The Trump administration last month had offered a $500 million loan that could have given the government up to a 90% stake in the Florida-based airline. But talks with bondholders for a government bailout this week failed to yield a deal.

President Donald Trump said earlier Friday that his administration had extended a "final" bailout proposal. "I would say we're driving a tough deal, but it's one of those things we will do it, or we won't," Trump told reporters on Friday. "Seems like the other lenders are blocking. They think they'll get bumped down in priority." "We come first," Trump said.

The Wall Street Journal reported earlier that Spirit was preparing to shut down. Other airlines said Friday that they have plans to help fly Spirit customers and crews if Spirit stops operating.

Spirit, which pioneered the budget airline model of low fares and fees for everything else in the U.S., had been profitable, but it was struggling in recent years. It faced rising labor and other costs, changing consumer tastes toward more upscale travel and a engine recall. A planned acquisition of Spirit by JetBlue was successfully challenged by the Biden administration two years ago.

The airline had expected to emerge from bankruptcy midyear before the jump in fuel prices. Spirit flew around 1.7 million U.S. domestic passengers, with a 3.9% market share in the U.S. market, as of February, according to aviation data firm Cirium. That was down from 5.1% market share last year, as the airline axed flights to cut costs.

As of Friday at 6:25 p.m., Spirit had 44 flights operating, according to Flightradar24.