Spirit Airlines prepares to shut down after failing to reach bailout deal
Spirit Airlines is on the verge of shutting down after failing to secure a lifeline deal, sources familiar with the situation revealed.
The budget airline could cease operations as early as 3 a.m. ET, according to CNBC insiders who spoke on condition of anonymity.
Discussions with bondholders for a government bailout fell through this week after the Trump administration had previously offered a $500 million loan that could have given the government a significant stake in the Florida-based airline.
President Donald Trump mentioned that his administration had extended a final bailout proposal, emphasizing the tough negotiations involved.
Other airlines have expressed plans to assist Spirit customers and employees in case of a shutdown.
Despite pioneering the budget airline model in the U.S., Spirit faced challenges such as rising costs, changing consumer preferences, and an engine recall.
The airline, which had been profitable, saw a decline in market share and struggled to cut costs effectively.
Spirit was still selling tickets on its website as of 5:30 p.m. ET, despite being in its second bankruptcy in less than a year.
United Airlines and American Airlines have announced measures to support Spirit customers and employees in the event of a shutdown.
JetBlue Airways and Frontier Airlines have also pledged to offer alternative flight options for affected passengers and crews.
