NEW YORK, United States (AFP) — US airline shares shot higher Friday following a report that Spirit Airlines was preparing to shut down as hopes fade for a potential White House bailout.

Hopes for a relief package for the discount carrier rose last week after President Donald Trump expressed interest in organising a package to save the carrier and thousands of jobs.

But The Wall Street Journal reported Friday that a potential US$500 million lifeline faced opposition within the Trump administration and among some Spirit bondholders.

The airline is “preparing to cease operations”, said the Journal, which reported that the exact timeframe wasn’t clear.

Shares of JetBlue surged 8.4 per cent, while American Airlines, Delta Air Lines, United Airlines and Southwest Airlines all won more than three percent following the Wall Street Journal report.

Spirit had announced on February 24 an “agreement in principle” to restructure its debt with creditors, saying it expected to emerge from bankruptcy by early summer.

However, a spike in fuel prices sparked by the US-Israeli war on Iran that started a few days later delivered a new blow to the struggling carrier.