The collapse of the US-based budget carrier due to a doubling in jet fuel prices will cost thousands of jobs.

Low-cost US carrier Spirit Airlines has said that all of its flights have been cancelled as it started an “orderly wind-down of operations,” after a potential White House bailout fell through.

“Spirit Aviation Holdings, Inc., parent company of Spirit Airlines … today regretfully announced that the Company has started an orderly wind-down of operations, effective immediately. All Spirit flights have been cancelled, and Spirit Guests should not go to the airport,” the airline said in a statement in the early hours of Saturday.

Spirit had 4,119 domestic flights scheduled between May 1 and May 15, offering 809,638 seats, according to the latest data from Cirium.

The collapse of the carrier due to a doubling in jet fuel prices during the two-month-old Iran war will cost thousands of jobs. It is also a blow to US President Donald Trump, who had proposed $500m to save Spirit despite opposition from some of his closest advisers and many Republicans in Congress.

Spirit had reached a deal with its lenders that would have helped it emerge from its second bankruptcy by late spring or early summer. But those plans derailed after the US war on Iran triggered a spike in jet fuel prices, upending Spirit’s cost projections and complicating its bankruptcy exit.

A Spirit board meeting had ended without an agreement to rescue the company, a person close to the discussions told the Reuters news agency late on Friday.

“Unfortunately, despite the Company’s efforts, the recent material increase in oil prices and other pressures on the business have significantly impacted Spirit’s financial outlook,” Spirit said in a statement announcing its “orderly wind-down”.

Trump on Friday said the White House had given Spirit and its creditors a final rescue proposal, after talks hit an impasse over a $500m financing package that would have helped the airline keep operating through bankruptcy.

“If we can help them, we will, but we have to come first,” Trump told reporters. “If we could do it, we’d do it, but only if it’s a good deal.”

Spirit’s restructuring plan assumed jet fuel costs of about $2.24 a gallon in 2026 and $2.14 in 2027, but prices had climbed to about $4.51 a gallon by the end of April, leaving the carrier unable to survive without new financing.

Transportation Secretary Sean Duffy told Reuters he had tried to get many airlines to buy Spirit but found no takers. “What would someone buy?” Duffy asked. “If no one else wants to buy them, why would we buy them?”

A creditor close to the deal said, “The Trump administration made an extraordinary effort to try and save Spirit, but you can’t breathe life into a corpse. Given that, the company should make its intentions clear for the sake of its customers and employees.”

No US carrier of Spirit’s size – it accounted for 5 percent of US flights at one point – has liquidated in two decades. Spirit helped keep fares lower in markets where it competed against major carriers.

Its collapse shows how the Iran war’s fuel-price shock has exposed weaker airlines. Across the globe, airlines have been increasing prices to reflect the high cost of jet fuel and some airlines have also cut flights.

German airline Lufthansa last month said it cancelled 20,000 flights in a bid to protect itself from the soaring cost of oil.

On Friday, Indian carrier Air India also said it has increased fuel surcharges on all flights and said it will cut 100 flights a day across domestic and international routes.