Spirit Airlines (OTC:FLYYQ) stopped flying on Saturday after its creditors wouldn’t back a U.S. government rescue plan, leaving the carrier to liquidate as the Iran war sent jet fuel costs sharply higher.
The failure lands in the middle of a fierce bailout debate, with transportation policy analyst Marc Scribner arguing in a push against using public funds for bailouts that Spirit’s risks belong with shareholders and lenders rather than taxpayers.
According to a report by Reuters, Spirit’s board concluded Friday negotiations without securing a viable solution, according to sources familiar with the discussions. The airline subsequently grounded its entire operation and warned passengers to stay home.
Why Spirit Airlines’ Liquidation Signals Market Shifts
Scribner has framed a federal backstop as a “bad investment,” warning that even a loan can shift airline downside to the public and that outright ownership would deepen that transfer. He also pointed to long-running losses at Amtrak and the U.S. Postal Service as examples he says show how poorly government can perform as an operator.
Spirit’s failure marks a political blow for President Donald Trump, whose $500 million rescue plan faced pushback from Republican allies and advisers before ultimately collapsing. Trump said on Friday the White House delivered what he described as a last proposal, adding that any help had to be on terms that put the U.S. first.
Spirit’s shutdown removes a major discount competitor that at one point accounted for about 5% …
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