Bankrupted Spirit Airlines Faces Imminent Liquidation

Bankrupt Spirit Airlines “could liquidate as early as this week,” according to a new CNBC report. The troubled carrier, stuck in years of turbulence, has failed to emerge from its second bankruptcy in less than a year and is now being squeezed by soaring jet fuel costs.

NEW: Spirit Airlines could liquidate and shut down as soon as this week, @lesliejosephs of @CNBC reports, citing “people familiar with the matter.”

Latest round of chatter about a deeply troubled airline … but rising fuel prices could be its death knell.…

— Kyle Potter (@kpottermn) April 16, 2026

When the budget carrier would begin the liquidation process was not immediately clear to CNBC’s sources, but the report comes just after an overnight Bloomberg story warned about the “risk of liquidation” due to the latest surge in jet fuel prices.

The airline had been trying to downsize its jet footprint and focus on popular seasonal routes, while labor unions made concessions to help keep operations afloat. But Spirit’s financial problems have been mounting for a while.

In 2024, JetBlue terminated its $3.8 billion merger deal with the carrier, citing low odds of regulatory approval after a Biden-era federal court blocked the deal over antitrust concerns.

Both CNBC and Bloomberg sources said the liquidation was likely to happen this week; today is Thursday, and the news may break as early as Friday.

The airline, which is still operating as of late Thursday morning, was expected to exit bankruptcy this summer, but that now appears increasingly unlikely. The carrier filed for Chapter 11 bankruptcy protection in August of last year, the second time in less than a year.

Airlines have increasingly warned of a spike in jet fuel costs and the financial impacts stemming from the Hormuz chokepoint disruption. Multiple carriers, including United Airlines, have warned about hiking baggage fees and ticket prices to offset jet fuel costs.

Meanwhile, UBS analysts are searching for a possible bottom in airline stocks (read the report). 

The best-hedged airline amid the jet fuel turmoil has been Delta Air Lines, the only U.S. carrier to operate a refinery.

Earlier this week, Reuters reported that United CEO Scott Kirby pitched a tie-up with American Airlines during a recent conversation with President Trump. The potential merger would create a super airline to strengthen U.S. competitiveness globally.