Catherina Gioino
The Trump administration is nearing a rescue package for Spirit Airlines that could provide up to $500 million in financing for the struggling budget carrier, the Wall Street Journal reported. The deal, which has not been finalized, would reportedly give the government warrants to purchase Spirit stock, potentially leaving taxpayers with a meaningful stake in the airline if it recovers.
It’s an unusually direct federal intervention in the fate of a single airline and comes as Spirit has been trying to survive an extended financial crisis. The low-cost carrier has struggled with rising jet fuel prices, weak demand in the leisure travel market, and the aftermath of a failed turnaround. Spirit had already been seeking government help as it faced the risk of liquidation. The airline reportedly was willing to offer the government equity in exchange for emergency aid, according to The Points Guy.
President Donald Trump signaled this week that he was open to federal support for Spirit. “I’d love somebody to buy Spirit,” Trump said Tuesday in an interview with CNBC’s Squawk Box, adding, “Maybe the federal government should help that one out.”
“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 spokesperson Kush Desai told Fortune in a statement.
“Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue,” the statement continued.
Desai is referring to a 2022 bid by JetBlue to buy Spirit for $3.8 billion, arguing the two smaller carriers together would create a larger challenger to the Big Four airlines in the U.S.: American, Delta, Southwest, and United.
However, in March 2023, the DOJ under the Biden administration stopped the deal and argued Spirit’s presence in the market created a “Spirit Effect” that forced other airlines to lower fares where Spirit competed. The DOJ said the deal would eliminate the nation’s largest ultralow-cost carrier and raise fares for travelers.
The Iran war sparked fuel shortages
Global airline carriers, not just Spirit, are dealing with surging jet fuel prices thanks to U.S.-Israeli strikes on Iran, which have disrupted traffic through the Strait of Hormuz—previously the route taken by more than a fifth of the world’s oil supply tankers.
Spirit has said it plans to shrink its fleet to about one‑third of its pre‑bankruptcy size, retaining roughly 76 to 80 aircraft by the third quarter of 2026. It built the plan based on fuel costs averaging about $2.24 per gallon in 2026 and $2.14 in 2027, according to its March disclosures.
By mid-April, jet fuel prices were around $4.24 a gallon, roughly double the level assumed in its projections.
