Report: Spirit Airlines Is Getting Ready to Shut Down

The Trump administration's proposed lifeline for Spirit Airlines apparently didn't work out. The Wall Street Journal, citing "people familiar with the matter," reports that the budget airline is preparing to shut down. The airline has been unable to lock in a roughly $500 million federal rescue package it was negotiating with the Trump administration, the sources say. The proposed deal would have swapped cash for warrants that could have given the government control of up to 90% of the company, but internal disagreements in the administration and resistance from some bondholders stalled the plan, according to the Journal's sources.

Last week, Trump confirmed that he was looking at a taxpayer-funded takeover, saying he'd "love to be able to save an airline." "When the price of oil goes down, we'll sell it for a profit," he said. Without that bailout, and squeezed by rising fuel costs, Spirit is said to be preparing to liquidate its fleet and wind down operations, though the timing is unclear. The airline has spent most of the last 18 months in Chapter 11 as its once-disruptive low-fare, high-fee model came under strain from mounting competition, years of losses, and heavy debt. If Spirit does shut down, it will be the first US carrier to liquidate since the 2008 recession, the Guardian reports.