April 24 (UPI) — The Trump administration is working on a bailout of Spirit Airlines, which is in bankruptcy for the second time in a year, to keep it from shutting down.
President Donald Trump several times this week that the government may get involved in the situation — specifically highlighting his concerns about jobs and the airline industry — after increases in jet fuel cost made the airline’s situation even worse, CNBC and USA Today reported.
Spirit has not commented on the bailout negotiations, which would have to be approved by its creditors, but the administration has offered Spirit a $500 million loan, with the government receiving the right to own 90% of the company when it exits bankruptcy, CBS News reported.
“We’re thinking about doing it, helping them out, meaning bailing them out, or buying it,” Trump said on Thursday.
“I’d love to be able to save those jobs,” he said. “I’d love to be able to save an airline. I like having a lot of airlines so it’s competitive.”
Commerce Secretary Howard Lutnick has argued it is necessary for the government to step in and save Spirit because if it is shut down and liquidated during bankruptcy, at least 7,500 jobs will be lost.
The White House may use the Defense Production Act, which gives the government the ability to compel private companies to prioritize its contracts in the event of an emergency and to loan money to those companies, to give Spirit a loan.
The loan would make the government Spirit’s main debtor and, while the company is working its way through bankruptcy, the Department of Defense would use extra seats for transporting troops or moving other military cargo.
The union that represents Spirit’s ramp service employees, the International Association of Machinists and Aerospace Workers, urged the administration to prioritize employees at the airline, The Hill reported.
“IAM Union members at Spirit, and all frontline aviation workers, did not cause this crisis,” the union said in a statement.
“They should not be the ones forced to pay the price. Any federal assistance must prioritize protecting jobs, preserving pay and benefits, and maintaining the affordable air service that millions of Americans rely on,” the union statement said.
Spirit filed for chapter 11 bankruptcy protection in November 2024 after a judge blocked its proposed $3.8 billion merger with JetBlue Airlines in March of that year, and filed for bankruptcy again in 2025.
Spirit’s current bankruptcy plan includes the cost of jet fuel, which has roughly doubled for the company since the United States and Israel launched the war in Iran. The cost of fuel has also tanked their current business model, according to reports.
Spirit missed an interest payment this week, leading to it being warned that it could be in default with its creditors — to which Spirit has warned they may only have days to operate, which spurred the bailout talks.
The federal government already is working with the company’s creditors and has made a loan offer, CBS News reported, and Spirit has said it continues to operate normally, which includes deeply discounted flights.
