Spirit Airlines reshaped aviation in the United States by stripping down flying to its essentials and selling what were often the cheapest tickets around. But the airline shut down for good on Saturday, a victim of the rising costs it once excelled at controlling.

In a statement just after 2 a.m., Spirit said it had canceled all flights and told passengers not to go to the airport. On the airline’s homepage, a bright yellow banner declared that the airline was “winding down all operations.”

The budget airline had lost billions of dollars in recent years as it struggled with intense competition at its most important airports — Las Vegas, Florida and New York among them — along with rising labor costs and aircraft maintenance needs.

As a result, Spirit filed for bankruptcy in 2024 and again in 2025. It had aimed to emerge from the second bankruptcy this summer as a smaller company, but those plans fell apart as jet fuel prices rose dramatically in recent weeks, a consequence of the U.S. and Israeli war with Iran.

The Trump administration started an 11th-hour effort to provide Spirit a $500 million lifeline, but government officials and the airline’s creditors could not reach a deal in time to save the company.

The proposed bailout faced resistance from investors in part because the Trump administration had demanded that the government have the first claim to Spirit’s assets if the airline ultimately failed. That would have left other investors that had lent money to the airline with little or nothing.

The airline’s lenders had put forward their own counterproposal that would have given the lenders better terms in a government deal, according to people familiar with the situation. But the parties could not reach an agreement.

In a letter on Thursday to Spirit Airlines, the creditors said they did not see how the company could survive and urged Spirit’s board to begin winding down its business, according to a copy reviewed by The New York Times.

The shutdown leaves 17,000 full- and part-time Spirit employees without work and tens of thousands of customers without flights. Spirit said it would automatically issue refunds for tickets purchased on credit or debit cards and was working to get more than 1,300 flight crew members home.

Many other airlines said they would offer affected travelers discounted prices on flights to and from the airports that Spirit served. Some said that they would help stranded Spirit employees get home and United Airlines also invited them to apply for jobs.

Spirit said it safely flew more than 50,000 passengers on Friday. Spirit flight 1833, the airline’s last, departed from Detroit late in the evening and landed in Dallas after midnight, local time.

The airline’s check-in counters were deserted at airports in Chicago, New York and Fort Lauderdale, Fla., near Spirit’s headquarters. But some customers continued to stream in on Saturday, unaware of the airline’s fate.

On Friday night, Eustaquio Mendez, had packed his bags, including his trumpet, eager to celebrate his birthday with family in San Juan, Puerto Rico, and play in a series of festivals, including one with the popular merengue star Juan Luis Guerra.

But when Mr. Mendez, his wife, Maria, and their young son showed up to Chicago O’Hare International Airport for their Saturday morning Spirit flight, they found the ticketing area eerily empty.

Mr. Mendez checked his email and discovered a message from Spirit announcing the end of service. He said he had heard rumblings late last year that budget airlines were in financial trouble, but he didn’t think Spirit would shut down so fast.

“When we booked this flight in March, maybe they should have said, ‘don’t,’” he said of Expedia, the third-party bookings site, where he purchased the tickets.

Mr. Mendez booked a new one-way flight out of Chicago Midway International Airport, which cost more than their original round-trip fare, which included a return flight on American. More disappointing to Mr. Mendez, who plays trumpet in the band Chicago Merengue All-Stars, he will miss a day of shows, including the gig with Mr. Guerra.

“All I could do is laugh it off,” Mr. Mendez said, adding that it did no one any good to kick the kiosk and pout. “We have to stay in high spirits.”

Spirit has been widely credited with democratizing air travel in the United States by keeping costs and ticket prices very low. The approach served Spirit well for years, generating huge profits. But competition from larger airlines and rising costs, particularly for pilots and other professionals, hobbled the company after the pandemic. It also suffered disproportionately from industrywide engine problems.

“Spirit Airlines played an important role in expanding access to affordable travel and bringing more low fares to more people,” Bobby Schroeter, the chief commercial officer of a rival, Frontier Airlines, said in a statement announcing discounted fares for affected travelers.

In an interview this past week, Scott Kirby, the chief executive of United Airlines, said Spirit’s problems predated the current rise in fuel prices. “They were in trouble well before this, and well-run airlines are able to be profitable even in this environment,” he said. He also criticized Spirit’s business model, saying it was fundamentally flawed because it was based on treating customers poorly.

While Spirit was particularly affected by rising competition and costs, other budget airlines have also struggled financially in recent years. This past week, the Association of Value Airlines, a trade group representing low-cost airlines including Spirit and Frontier, asked the Trump administration for $2.5 billion in aid to offset higher jet fuel costs, which have risen by about 65 percent since the war in Iran began.

Airlines for America, which represents larger carriers, said in a statement that such aid “would punish other airlines that have engaged in self-help.”

Sean Duffy, the transportation secretary, said on Saturday that he did not believe that the aid was necessary, at least not yet. The government would be “a lender of last resort,” he said, but the airlines can raise money, if needed, through private markets.

“Are there some financial issues with some of the low-cost carriers? Yes,” he said at a news conference at Newark Liberty International Airport. “But they have access to capital and many of them are well-run businesses.”

Spirit was founded in Michigan in the 1960s as a trucking company. In the 1990s, it started offering charter flights. Then, in the next decade, it started to upend the airline business.

In 2006, Indigo Partners, a private equity fund that specializes in budget airlines, acquired a majority stake in Spirit. The airline adopted the business model made famous by Ryanair, the European carrier, and focused on reducing costs, selling cheap tickets and offering bare-bones services. The industry calls airlines that use that business model “ultra-low-cost carriers” to distinguish them from an earlier generation of low-cost carriers like Southwest Airlines.

One of the main proponents of that strategy was Ben Baldanza, who spent a decade as Spirit’s chief executive. During his tenure, the airline generated big profits. Mr. Baldanza, who died in 2024, was proud of Spirit’s no-frills approach, which the airline highlighted in sometimes provocative advertising.

Spirit became the subject of jokes on late-night talk shows and frustrated many travelers by charging fees for services that other airlines provided for free, such as printed boarding passes, carry-on bags and the ability to choose a seat. But Spirit’s approach worked and forced other airlines to make big changes.

Experts in aviation and economics say Spirit’s low fares helped to make air travel accessible to more people. Its decision to fly to an airport often prompted other carriers operating there to quickly lower prices.

The loss of Spirit could be devastating for its home airport, Fort Lauderdale-Hollywood International Airport. But it could present an opportunity to other airlines, too. About 25 percent of flights at the airport were operated by Spirit in the past year, while JetBlue Airways operated a similar share, according to Cirium, an aviation data firm. Delta Air Lines and Southwest Airlines each operated about 10 percent of flights.

“This is really going to hurt the airport,” said Bernard Burawski, 66, who works as a volunteer there.

“Even though it’s a budget airline, a lot of people use it,” he said of Spirit. “It’s the Greyhound of the skies. The shutdown went so fast, they didn’t even have to take down their signs.”

Spirit’s ability to pressure other airlines to lower fares was one of the main reasons that a federal judge sided with the Biden administration’s Justice Department in blocking the airline’s plan to merge with JetBlue Airways in 2024.

“In eliminating Spirit from the marketplace, the proposed transaction would, by definition, dampen Spirit’s disruptive force,” the judge, William G. Young, wrote in his ruling.

Trump administration officials have repeatedly criticized the Biden administration for thwarting the merger. But JetBlue has also struggled to turn a profit for years, and aviation experts say there is no guarantee that a combination of the two airlines would have been profitable. Airline mergers are hard to pull off well and are often marred by major problems. Even successful combinations can lose money for years before the benefits of merging begin to surface.

As Spirit grew, it expanded into airports served by major airlines, which, in turn, adopted some of Spirit’s tactics to compete with it.

In 2012, Delta Air Lines introduced lower but restrictive “basic economy” fares that were in the same ballpark as the fares that Spirit and other budget airlines offered. Later, United Airlines and American Airlines rolled out similar basic tickets.

As a result, many people who previously flew on Spirit began to book tickets on larger airlines, which could also lure them with more frequent service, shorter waits between connecting flights and more alternatives if flights were canceled.

Gabe Castro-Root, Kim Bellware and Lauren Hirsch contributed reporting.