Shares of JetBlue Airways and Frontier Airlines jumped sharply on Friday morning after a Wall Street Journal report said Spirit Airlines is preparing to shut down operations, sending shockwaves through the aviation sector. JetBlue rose 7.4% and Frontier climbed 8.8% around 11 a.m., as investors reacted to news that Spirit’s anticipated rescue deal with the U.S. government had collapsed and that the carrier’s bondholders had rejected the proposed terms. Two people familiar with the matter told the Journal that Spirit is now preparing to wind down after failing to secure the $500 million federal lifeline it had been negotiating in recent weeks.
The potential shutdown marks a dramatic fall for the budget airline that reshaped U.S. travel with ultra-low fares and à‑la‑carte fees but struggled to survive a cascade of pressures — from high fuel prices and fierce competition to pandemic losses and an engine defect that grounded part of its fleet. Spirit had already filed for bankruptcy twice in two years and was shrinking rapidly, operating fewer than half the flights it had two years ago. While the airline said Friday it was still operating normally, key questions remain about when flights might cease and how customers would be affected, as administration officials and industry experts increasingly doubt whether any bailout could keep the carrier viable.
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