Report: Trump Is Preparing to Bail Out Spirit Airlines

Spirit Airlines may be about to avoid a crash landing, thanks to taxpayers. The budget carrier is close to securing a roughly $500 million federal rescue that would give Washington an ownership stake in the airline, a source familiar with the talks tells CNN. A deal could be announced as early as late Wednesday or Thursday and is aimed at keeping Spirit flying long enough to complete its second bankruptcy restructuring since 2024. The airline could otherwise become a casualty of the Iran war: Jet fuel prices have doubled since the war began, disrupting the airline's recovery plans.

Without a bailout, Spirit could become the first major US airline in decades to shut down entirely. The stakes for travelers and workers are sizable: Spirit accounts for about 2% of US domestic seat capacity and employs tens of thousands of staff and contractors. Its ultra-cheap base fares—offset by fees for things like carry-ons—have pushed big rivals to offer their own bare-bones "basic economy" tickets. Removing Spirit from the skies would likely tighten seat supply and drive fares higher, on top of roughly 20% year-on-year ticket price increases tied to jet fuel costs and strong demand.

• President Trump has publicly signaled openness to a Spirit lifeline in exchange for a government stake, saying Tuesday on CNBC he'd "love somebody to buy Spirit" and suggesting Washington might fill that role to protect jobs. "And I told my people," he said. Transportation Secretary Sean Duffy said Trump told him to "take a look" at a deal. Sources tell the Wall Street Journal that Trump met with Duffy and Commerce Secretary Howard Lutnick Tuesday night to try to work out a deal.
• But industry pushback is fierce. United Airlines CEO Scott Kirby argued that a bailout isn't warranted, calling Spirit's business model "fundamentally flawed" even before the fuel price spike. "Well-run airlines are still solidly profitable even in this environment," he said Wednesday. "I don't think this crisis is anywhere near big enough to cause the need for an airline bailout."
• The White House declined to confirm that there had been talks about a deal, but spokesman Kush Desai blamed the Biden administration for the airline's financial woes. A proposed merger with JetBlue was called off in 2024 after the Justice Department sued to block it, saying the merger would reduce competition and drive up costs.