Between the spike in jet fuel prices and regular operating cost issues that often make aviation an unlucrative industry to get into, dozens of small and mid-size airlines filed for bankruptcy or shut down entirely in the first half of 2026.
The May 2026 collapse of Spirit Airlines is the most prominent case. But other major bankruptcy-related shutdowns include Mexican holiday carrier Magnicharters and British cargo airline European Cargo.
Argentine low-cost carrier Flybondi is, while not permanently shut down, currently also facing its own financial and operating crisis after authorities in Brazil blocked it from selling tickets to flights onto or out of the country due to a high rate of cancelations since the start of the summer. As rumors of a potential bankruptcy swirl, the airline is currently promising to restart flights by mid-September.
Airline investment firm 777 Partners wins move to refile bankruptcy in Texas
Another major bankruptcy came on July 16, 2026, when Miami-based investment firm 777 Partners filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of Florida.
Established in 2005 by Josh Wander and Stephen Pasko, the investment firm started out by acquiring several soccer clubs in Europe and later bought major stakes in several low-cost airlines.
Related: Another airline shuts down, cancels all flights due to low demand
Two of the carriers 777 Partners backed, including Australian airline startup Bonza and Canadian budget airline Flair Airlines, ended up in bankruptcy in the last two years.
777 Partners also faced a string of financial and legal problems, including a Department of Justice investigation into money laundering that ended up with co-founder Joshua Wander and Chief Financial Officer Damien Alfalla being charged with fraud of over $500 million in October 2025.
The Chapter 11 filing was an effort to eliminate over $2 million in debt while, according to the latest update, 777 Partners just won a bid to move an involuntary Chapter 7 liquidation initiation against it from Florida to Texas.
Bonza
What is happening with the multiple bankruptcy petitions against 777 Partners
The Miami judge overseeing the case argued that “Texas is the stronger administrative forum” to hear the petition. For the investment firm, this is a win because it allows it to tap into more than $8.6 million in debtor-in-possessor funds while also halting the petition to liquidate it filed in Miami.
That said, the firm still faces more than 23 bankruptcies from creditors in different states.
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Other airlines that filed for bankruptcy in 2026:
- Spirit Airlines: The largest airline shutdown of the year occurred when Spirit Airlines canceled all remaining flights on May 2. Although the airline had filed for Chapter 11 protection twice before, the skyrocketing price of jet fuel dealt the final blow to its operations.
- Magnicharters: The Mexican low-cost airline canceled all of its flights until May 2026 in a shutdown that left thousands stranded.
- Starflite Aviation: Houston-based Starflite Aviation had its AOC license revoked in March 2026, amid FAA claims that owners falsified pilot training records to bypass safety audits.
- AlpAvia: Slovenian charter airline AlpAvia also shut down in March 2026 over financial problems.
Related: Backers of bankrupt airline shut down in Chapter 11 arrested for fraud
