The Trump Administration may give Spirit Airlines a $500 million loan to keep the struggling airline afloat, according to a report.
The deal currently being discussed would have the U.S. government loan Spirit as much as $500 million, in exchange for a potential stake in the company, people familiar with the matter told The Wall Street Journal.
The Transportation Department and Commerce Department are involved in the discussions, which are not yet final. President Donald Trump met Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy Tuesday night to work on the deal, according to the sources.
“Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue. The Trump administration continues to monitor the situation and overall health of the U.S. aviation industry that millions of Americans rely on every day for essential travel and their livelihoods,” White House Spokesman Kush Desai told The Independent on Wednesday.
The president has urged someone to step in to prevent the troubled airline from going out of business, telling CNBC on Tuesday, “I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out.”
The Florida-based airline has been working to make a comeback after filing for Chapter 11 bankruptcy in 2024 over a multibillion-dollar debt load. While the company exited court protection soon after, it has struggled amid high costs and continued debt and filed for bankruptcy again in August.
Spirit appeared to be making a comeback after reaching an agreement with creditors on a plan to cut its debt and reduce operational costs. It was expected to emerge from bankruptcy this summer, until the U.S. and Israel began launching strikes against Iran at the end of February.
When Iran effectively closed off the Strait of Hormuz in retaliation, oil prices surged. Even with the passageway open, jet fuel prices have spiked, putting even further pressure on the airline.
Bloomberg reported last week that Spirit was at risk of being liquidated over the rising jet fuel prices. The publication’s sources said a decision to liquidate could come as soon as this week, but a Reuters source said that there are no plans for the airline to liquidate in the coming days.
The budget airline reportedly asked the Trump administration for an emergency bailout as it tries to avoid liquidation amid rising fuel costs.
