Spirit Airlines to cease operations after federal bailout negotiations fail

Spirit Airlines to cease operations after federal bailout negotiations fail

Budget airline Spirit Airlines is reportedly preparing to shut down after talks to secure a $500 million federal bailout apparently collapsed.

The Wall Street Journal first reported on Spirit’s imminent demise Friday morning. The Journal said that as negotiations petered out, the company simply ran out of money.

President Donald Trump had been positive about the deal and recently made remarks about saving the company.

“They have some good aircraft and good assets,” Trump said Thursday. “I’d love to be able to save those jobs. I’d love to be able to save an airline.”

But some Cabinet members weren’t so optimistic about the deal. Transportation Secretary Sean Duffy noted that Spirit has yet to turn a profit.

“What we don’t want to do is ‌put good money after bad, and there’s been a lot of money thrown at Spirit, ‌and they haven’t found their way into profitability,” Duffy said. “And so would we just forestall the inevitable and then own that?”

The last time a major U.S. airline went under was in 1991, when Pan American World Airways ceased operations. The company’s unexpected collapse left thousands of passengers stranded, as they tried to receive refunds from a suddenly defunct company.

Nearly 10,000 people lost their jobs when Pan Am, then one of the country’s largest airlines, closed.

With Spirit’s apparent closure looming, nearly 13,000 people may soon be seeking employment in a market experiencing a hiring slowdown.

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