Spirit Aviation Holdings Inc. is set to start an orderly wind-down process to sell its assets, capping the downfall of the low-cost carrier that has filed for bankruptcy twice in recent years and failed to clinch a last-minute US government rescue.

The airline filed a motion on Monday requesting to wind down operations, after ceasing all passenger flight operations early Saturday. It is also seeking to modify a bankruptcy loan to have the necessary funding to proceed with the sale of its assets, which include aircrafts and spare engines and parts.

The airline had planned to exit bankruptcy by the summer after striking a deal with creditors to shed billions in debt and lease obligations. But its financial position significantly worsened due to the surge in fuel costs stemming from the ongoing conflict in the Middle East.

As Spirit veered toward liquidation last month, the Trump administration floated a rescue package. But the effort fizzled out after pushback from a group of creditors and even some Republicans. Late last week, the company was informed that this potential new financing “was no longer an available option,” chief financial officer Fred Cromer said in a declaration filed Monday in support of the wind-down request.

The company made the call to wind down on Friday as it was running short on cash, Cromer said. Spirit incurred nearly $100 million in incremental fuel costs between March and April 30, he said.

Spirit ceased operations around 3 a.m. Saturday so that none of its planes would be in the air and all crew who were away from bases had sufficient time to make hotel accommodations, Cromer added.

Like other airlines, Spirit’s outlook has dramatically changed since the start of the US-Iran war and disruption in the Strait of Hormuz, a key passage for oil. Fierce competition among low-cost carriers and major airlines for the budget customer has also weighed on the finances of Dania Beach, Florida-based Spirit, which traces its roots back to the early 1980s.

The airline missed opportunities to merge with competitors in recent years. In its latest bankruptcy, it had revived talks to merge with Frontier Airlines, after Spirit rejected an offer from the low-cost rival early last year. But the effort went nowhere.

JetBlue Airways Corp. was previously blocked from merging with Spirit on antitrust grounds by the Justice Department under the Biden administration.

As part of the wind-down plan, Spirit is looking to enter sale-process agreements for its owned aircraft with counterparties that have security interests over them. Absent those deals, it plans to abandon its planes as they are unlikely to have sufficient value to justify incurring additional costs during while a sale process is pending, the CFO said on Monday. The company is also looking to sell a significant part of its non-fleet assets for $1 million or less.

To oversee the wind-down, the company is asking to initially retain about 150 workers, which will be reduced to 40 after the first few months. Spirit said it had more than 11,200 employees when it filed Chapter 11 in August.

The cost to retain these key employees is expected to be around at least $10.7 million, and there may be an additional incentive compensation for senior management.

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