Spirit Airlines announced early Saturday morning that it is ceasing operations after the budget carrier failed to secure a $500 million federal bailout. 

Spirit Aviation Holdings, the airline's parent company, said in a news release that it "regretfully announced" that it had "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. 

The Florida-based airline, which has filed twice for bankruptcy since 2024, recently faced surging costs in jet fuel due to the Iran war. CBS News reported on Friday that Spirit planned to shut as early as Saturday. 

The "recent material increase in oil prices" brought on by the Iran war and "other pressures on the business" that "have significantly impacted Spirit's financial outlook," the airline said in its statement. 

"With no additional funding available to the Company, Spirit had no choice but to begin this wind-down," the company said. 

The Trump administration's proposed bailout would have given the U.S. government a 90% stake in the airline. Spirit's cash reserves had dwindled in recent days as talks with the government broke down, according to multiple sources familiar with the discussions.

Some of Spirit's bondholders, including Ken Griffin's Citadel and Ares Management Corp., had opposed the deal, U.S. officials previously told CBS News.

"In March 2026, we reached an agreement with our bondholders on a restructuring plan that would have allowed us to emerge as a go-forward business," Spirit CEO Dave Davis said in a statement Saturday. "However, the sudden and sustained rise in fuel prices in recent weeks ultimately has left us with no alternative but to pursue an orderly wind-down of the Company."

The airline industry faces higher costs due to rising energy prices, prompting carriers to raise fares and cut unprofitable routes.

By the time of Spirit's first bankruptcy filing in November 2024, the company had lost more than $2.5 billion since the start of 2020. In 2025, Spirit cut almost 4,000 jobs and 200 underperforming routes, ending the year with about 7,500 employees, including 2,000 pilots and 3,000 flight attendants, according to its latest annual report. 

Spirit again filed for bankruptcy in August 2025 and disclosed in a regulatory filing that it had "substantial doubt" about its ability to continue operating.

"No frills" flying

Liquidating Spirit will bring an end to an airline known for its bright yellow planes and rock-bottom fares. The company's roots go back to 1983, when the airline was spun off from a trucking company. Initially called Charter One, the airline rebranded in 1992 as Spirit Airlines and added more planes and routes. The company shifted to a "no frills" approach to travel in 2007, according to its union.

Trump administration officials were told that Spirit would wind down operations within 24 hours, CBS News learned Friday from people familiar with the matter. They confirmed that the White House would not make a last-ditch effort to save the airline. 

When President Trump was asked about a bailout for Spirit Airlines on Friday, he said, "Well, I guess we're looking at it. If we can do it, we'll do it, but only if it's a good deal." 

Spirit flew to more than 40 cities in the U.S., with a main hub at Fort Lauderdale-Hollywood International Airport in Florida, and had international routes to the Caribbean and Central and South America.