Major CA Airline On Brink Of Closure As Taxpayer Bailout Falters: Report

Spirit Airlines is preparing to shut down, potentially in the next few days as negotiations for a government bailout break down, according to a report published Friday.

Spirit operates dozens of daily flights to and from Los Angeles International Airport, Hollywood Burbank Airport and John Wayne Airport in Santa Ana. Now, Southland travelers are being urged to explore alternative travel plans.

The financially troubled airline had been hoping to secure a $500 million bailout from the government before running out of cash. But the company hasn't been able to get enough support between certain creditors and the government to finalize the deal, the Wall Street Journal reported.

The deal would have provided the airline with cash in exchange for warrants that could convert into a stake of up to 90% of the company, according to the publication.

Spirit — which is in its second bankruptcy process in about a year — has been facing a major financial squeeze from the rapid increase in jet fuel prices spurred by the U.S. war with Iran, Bloomberg reported. The airline maintains a hub in Southern California where dozens of Spirit flights come and go daily.

Despite the report on the bailout deal falling apart, President Donald Trump on Friday said he's still weighing a taxpayer-funded takeover of the airline.

The president didn’t offer details about the proposal, but said he would have an announcement on the matter Friday or Saturday.

“We’re looking at it. If we could do it, we’ll do it. But only if it’s a good deal,” Trump said.

Trump said he would like to save jobs at the airline and his administration gave Spirit “a final proposal.”

“We’re looking at Spirit and if we can help them, we will. But we have to come first,” he said.

Should a government deal fail to materialize, the airline will likely be forced shut down, according to reports. That could mean that customers planning to fly on Spirit in the immediate future could find that they have tickets for an airline that essentially doesn't exist anymore.

The ultra-low-cost carrier emerged from bankruptcy in March 2025 but is now seeking court approval for its second bankruptcy exit plan in about a year.

A lawyer for Spirt told a judge a week ago that it was in advanced talks with the government on a deal that would allow it to exit Chapter 11 bankruptcy protection.

Its current restructuring plan was built on fuel costs averaging ‌about $2.24 per gallon in 2026 and $2.14 in 2027. But jet fuel prices are already double the level assumed in its projections — $4.24 a gallon in the middle of last month, according to Reuters.

If fuel costs stay at their current levels, Spirit would end up operating at a significant loss — about 20 percent below break even. Creditors have already raised concerns that there's so little room for error in the airline's plan, Reuters reported.

RELATED: 'Everyone’s Gonna Shut Up:' Airline Employee Goes Off On Crowd

The company is aware of the risk: In its latest annual report, executives said the recent increase in fuel prices would have ​an "immediate and substantial negative impact" on results and warned that if higher costs make it harder to reach agreements with creditors and other stakeholders, ⁠it could be forced to liquidate, according to Reuters.

Spirit services the Burbank, Los Angeles and Orange County airports. It previously served Oakland, Sacramento, San Jose and San Diego, but pulled out of those cities in October. That was about a month after it filed for Chapter 11 bankruptcy protection.

RELATED: Budget Airline Stops Flights At 4 CA Airports: Report

Over the last year, Spirit has been cutting routes as part of its restructuring. It had more than 200 planes at the time it filed for bankruptcy and dropped to 80 by the end of 2025,CBS News reported.

There are currently no publicly announced plans for Spirit to shutter, and flights are continuing to operate as planned.

The airline, however, is urging travelers to monitor their flights closely.

Travelers may not be able to recoup the cost of cancelled flights.

Spirit ticket holders are urged to have backup travel plans and may be able to dispute the cost of a cancelled flight with the bank if a credit card was used to purchase the ticket.

Alternatively, they could file a claim in bankruptcy court in hopes of delayed compensation.

Travelers may also want to buy traveler's insurance and avoid buying flights to far in advance amid the turmoil.

Material from the Associated Press was used in this report.

More California News:

• World's Tallest Basketball Player, 7-Foot-9 Olivier Rioux, Signs With OC College
• Tate Slams Fieri With Misogynistic, Racist Slur After Viral UFC Encounter
• Pizza Place Raffling Off Mystery Contents Of Long-Unopened Safe
• $400M Listing For Mega Mansion Aims To Be Country's Most Expensive Home Ever Sold
• Bay Area United Flight Has Close Call With Drone Over San Diego
• D4vd Lured Teen, Used Chainsaw To Dismember Her — How He Did It, According To Prosecutors