Affordable carrier Spirit Airlines, which went bankrupt in 2025, is reportedly staring at a shutdown after a $500 million bailout deal with the federal government fell through.
The Wall Street Journal reported the news Friday, citing sources that claim Spirit failed to bring some bondholders and the US government on the same page over the bailout plan.
The shutdown would be a big hit for discount flyers in several regional airports where Spirit is a significant carrier, including Detroit in Michigan, where Spirit is the second-largest airline operating from the airport after Delta.
Meanwhile, the report has sparked a collapse of Spirit Airlines' share prices, with a 65% fall in just an hour, from $1.40 to $0.4, as of 12:30pm ET.
Spirit Airlines is a majority publicly traded company, with more than 70% shares held by public companies and retail investors.
Among the institutional investors with significant assets deployed in Spirit Airlines are Vanguard Group, Inc., with approximately 9.52% holdings, and BlackRock, Inc., which holds about 7.69% shares.
Spirit Airlines has not officially released a statement on the bankruptcy and possible shutdown, but the carrier is reportedly "preparing to cease operations."
