Spirit Aviation shares plummeted 70% on news that the company is preparing to shut down

Spirit Aviation securities collapsed on the over-the-counter market by more than 70% to $0.4 per share (the day before they cost $1.4 per share). Such dynamics they showed on the background of reports that the carrier is preparing to stop its activities after negotiations with the U.S. government on providing it with financial assistance failed. This was reported by The Wall Street Journal (WSJ) on Ma 1, citing sources familiar with the situation.

This news, Bloomberg notes, has pushed up the securities of Spirit Aviation's competitors, with JetBlue Airways shares up 7.95% on Ma. 1 and Frontier Group up more than 12%.

Later, the rate of decline slowed down and Spirit Aviation securities, again rose to $1 per paper: U.S. President Donald Trump announced, his administration has provided Spirit Airlines "final" anti-crisis proposal, as without financial support budget carrier "may be forced to liquidate", writes CNBC.

The Wall Street Journal reported on April 27 that amid the ongoing conflict in the Middle East, which caused a sharp rise in jet fuel prices, a group of U.S. low-cost airlines, including Spirit, appealed to the U.S. government for $2.5 billion in financial assistance. And Spirit, according to the Journal, has separately requested $500 million from the U.S. government. However, Spirit, which has twice filed for bankruptcy protection (a business reorganization procedure that allows a company to continue operating while suspending creditors' claims to restructure debts) in less than a year, failed to get support from creditors and the U.S. government, sources familiar with the situation told The Wall Street Journal on May 1. Spirit, according to them, is preparing to cease operations.

The airline itself declined to comment on the reports, saying Spirit was operating as normal.

The Wall Street Journal's interlocutors in turn noted that Spirit was running out of money without government assistance, so the airline planned to liquidate its fleet and shut down.

CNBC does not provide details about the financial assistance the Trump administration has agreed to give the airline.

For the past year and a half, Spirit has mostly been "in Chapter 11 bankruptcy proceedings," the WSJ notes. This is a provision of U.S. bankruptcy law that allows a company to continue operating while restructuring debts. The airline's business model, which once made it an unconventional player in the industry - ultra-low fares combined with pay-as-you-go fares for literally everything - has come under pressure due to increased competition, the newspaper notes. The airline first filed for bankruptcy in November 2024, having difficulty managing its debts. In August 2025, it filed a similar petition for the second time - by then Spirit's debt was about $7.4 billion.

This article was AI-translated and verified by a human editor