No bailout needed for other US low-cost airlines, Duffy says

Transportation Secretary Sean Duffy said he doesn't think the U.S. government needs to provide financial lifelines for now to other low-cost carriers, following the collapse of Spirit Aviation Holdings Inc.

"At this point, I don't think it's necessary," he said during a press conference Saturday at Newark Liberty International Airport. "They do have access to cash."

Duffy spoke hours after Spirit ceased operations, leaving passengers and employees stranded across the U.S. Earlier in the day, he announced measures to support those passengers, saying several carriers including United Airlines Holdings Inc., Delta Air Lines Inc., Southwest Airlines Co., American Airlines Group Inc. and JetBlue Airways Corp. agreed to cap prices or reduce fares for customers impacted by the shutdown.

The Association of Value Airlines, which represents carriers including Frontier Group Holdings Inc. and Allegiant Travel Co., has asked the government for $2.5 billion to help its members.

Spirit shuttered after talks between the airline and the Trump administration failed to produce a rescue package. At one point, the administration considered a plan to provide $500 million in financing in exchange for warrants to purchase as much as 90% of the company when it emerged from bankruptcy.

The discussions collapsed after key creditors balked at some of the terms of the deal. They offered a counterproposal, according to a person familiar with the matter who asked to remain anonymous because the talks weren't public. But ultimately it didn't go anywhere.

"In the end, this was a creditor issue," Duffy said.

Spirit has been struggling for years and in August filed for Chapter 11 bankruptcy protection for the second time in less than a year. The airline had been expected to exit bankruptcy over the summer, but higher fuel costs stemming from the conflict in the Middle East were the final nail in the coffin. Spiking fuel costs have also hurt other airlines, especially Spirit's low-cost competitors.

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This story was originally published May 2, 2026 at 12:34 PM.