Spirit Airlines may shut down as soon as Saturday morning after failing to secure the critical financial support from the government needed to keep operating, according to reports.

The struggling budget airline was negotiating with the Trump administration for a $500 million rescue package that would have provided cash in exchange for equity-like warrants, giving the government up to a 90 percent stake.

The effort has stalled because Spirit has been unable to secure the necessary backing from bondholders and government stakeholders, people familiar with the matter told the Wall Street Journal Friday.

Spirit is currently expected to cease operations around 3 a.m. ET Saturday, according to several outlets.

JetBlue, Frontier Airlines and other carriers have stepped in to offer assistance to Spirit Airlines passengers who have tickets booked for this weekend, if needed.

“We know that uncertainty is never easy. We’re here to help if Spirit Airlines’ operations are suspended and your travel plans are disrupted,” JetBlue said in an social media post Friday.

Frontier Airlines offered a similar message, announcing it is “ready to support customers who may be impacted if Spirit Airlines ceases operations, with a focus on helping people continue their travel plans with low-fare options.”

Henry Harteveldt, founder of Atmosphere Research Group, a travel consulting firm, told CNBC that Spirit Airlines passengers should wait to cancel their tickets until the company formally announces its closure to ensure their tickets are refunded.

“If you’re holding a reservation for a flight on Spirit don’t proactively cancel it. Wait for the airline to announce it is shutting down,” he said.

Customers who bought tickets using a debit card or loyalty points may not receive refunds, Harteveldt added.

Sources close to the discussions told The WSJ that there had been disagreements within the Trump administration over whether and how to fund the bailout, while some Spirit bondholders were reluctant to accept a deal.

President Donald Trump told reporters Friday that his administration offered a “final” bailout to Spirit, warning the carrier would likely be forced to liquidate without it.

“If we could do it, we’d do it, but only if it’s a good deal this weekend, because they haven’t gotten a deal looking at it,” Trump said, according to CNBC. “I said I’d like to save the jobs but we’ll have an announcement sometime today … We gave them a final proposal.”

The Independent has contacted Spirit and the White House for comment.

Without agreement from both groups, the airline could not secure the funding it needed to continue operations, according to The WSJ. As a result, people familiar with the situation say the airline is now facing a total shut down, including plans to liquidate its fleet.

Like other airlines, Spirit is facing intense pressure from rising fuel costs, which have roughly doubled since the outbreak of the Iran war. Without a government bailout, those higher expenses are quickly draining what’s left of Spirit’s cash.

Under the proposed deal, the federal government would have offered Spirit up to $500 million in loans in exchange for warrants that could translate into a significant ownership stake, sources told the WSJ. The Commerce and Transportation Departments were reportedly both involved in the discussions.

Trump also reportedly met with several Cabinet secretaries on April 21 to try to finalize the agreement. The next day, Trump told CNN, “I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out.”

Spirit CEO Dave Davis told The Independent in a statement last week that he values Trump’s interest in the company, which carried millions of passengers last year.

“We are grateful for President Trump’s support and look forward to continuing to work with him and his administration on a solution that protects thousands of jobs, preserves and enhances competition and helps ensure Americans continue to have access to affordable fares,” Davis said.

Spirit has already spent much of the past 18 months in Chapter 11 bankruptcy protection as it faces the threat of liquidation over rising fuel costs caused by the Iran war, Bloomberg reported last week.

Spirit has struggled to recover since the pandemic, as travel patterns shifted and many passengers increasingly preferred full-service airlines over ultra-low-cost carriers. The airline’s finances took a major hit, with losses piling up to more than $2.5 billion since 2020.

These ongoing challenges led Spirit to file for bankruptcy twice – first in November 2024 and again in August 2025. Despite this, the company initially showed signs of recovery after striking a deal with creditors to reduce its debt load and cut operating costs, raising expectations that it could emerge from bankruptcy by the summer.

That recovery path was disrupted when escalating geopolitical tensions, including strikes involving the U.S. and Israel against Iran beginning February 28, added further uncertainty to global markets and travel conditions.