Spirit Airlines prepares to cease operations amid financial struggles and high oil prices | Business

Spirit Airlines is preparing to cease operations after the beleaguered company ran out of cash and the Trump administration’s rescue attempt faltered.

According to the Wall Street Journal, the company was struggling to make deals with its creditors and obtain financing to continue its operations. report I’m quoting people who know the subject.

Following earlier reports that Spirit was close to liquidation, the Trump administration said it was working on a deal to keep the carrier afloat, including a potential $500 million loan from the federal government.

Donald Trump said last week that he was aware the company was in trouble and even suggested that the federal government could buy the carrier in the meantime.

“We’re thinking about doing that, helping them, meaning bailing them out or buying them,” Trump said, adding that the government could “sell them for a profit” when oil prices fall.

If Spirit is liquidated, it would be the first major U.S. carrier to liquidate since the 2008 recession.

Spirit and other airlines are struggling with high oil prices, which are driving up jet fuel prices. However, the company’s difficulties in increasing demand after the epidemic predated the war in Iran.

In 2024, a federal judge blocked the $3.8 billion merger between JetBlue and Spirit on antitrust grounds, saying the merger would reduce competition between the airlines and harm customers.

In its previous statements, the White House said, “If the Biden administration had not recklessly blocked the airline’s merger with JetBlue, the company’s financial situation would have been much stronger.”

Spirit and the White House did not immediately respond to requests for comment.