The Trump administration is nearing a potential rescue deal for Spirit Airlines that could provide up to $500 million in government loans to help keep the struggling carrier in business, according to reports.
Under the proposal, the federal government would extend financing to Spirit in exchange for warrants that could later give taxpayers a significant ownership stake in the airline, according to people familiar with the talks. Discussions reportedly involve the U.S. Department of Transportation and the U.S. Department of Commerce.
The agreement has not been finalized, and terms could still change.
Donald Trump met on Tuesday with Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy to discuss options for the airline, according to reports. White House officials said the administration is monitoring the situation closely and views aviation as strategically important.
Spirit, known for its bright yellow planes and ultra-low fares, employs about 14,000 people. Trump said this week he was concerned the airline could fail and suggested the federal government might need to step in.
The carrier has faced years of financial pressure. Its planned $3.8 billion merger with JetBlue Airways was blocked in court in 2024 after the Justice Department argued the combination would reduce competition and increase fares.
Since then, Spirit has struggled with debt, aircraft groundings tied to engine issues, and heavy competition from larger airlines. The company filed for Chapter 11 bankruptcy in late 2024, later emerged, and then entered bankruptcy protection again last August.
Rising jet fuel prices linked to the conflict involving Iran have added to the airline’s challenges, increasing costs across the industry.
Not everyone supports a government bailout.
Ted Cruz criticized the idea of taxpayers taking control of a failing airline, while Scott Kirby said Spirit’s larger issue is its business model rather than fuel prices.
Source: WSJ