Spirit Airlines is in “very advanced discussions” with the US government over a potential financing package that could provide up to $500 million in support as the low-cost carrier works through bankruptcy proceedings, according to reports.
Marshall Huebner, an attorney representing Spirit Airlines, disclosed the talks during a bankruptcy hearing, confirming growing speculation that President Donald Trump’s administration is weighing a federal rescue package for the struggling budget airline.
While Huebner did not provide terms of the proposed deal, earlier reports indicated the administration was nearing an agreement to loan Spirit as much as $500 million in exchange for up to a 90% equity stake in the airline once it emerges from bankruptcy.
President Donald Trump said on Thursday that the government could potentially acquire the carrier, signaling openness to an unusual level of federal involvement in the airline industry.
The possible bailout has sparked debate within the administration, with supporters arguing that preserving Spirit is critical to maintaining competition in the US airline market and protecting thousands of jobs.
Commerce Secretary Howard Lutnick has reportedly backed the proposal, saying the rescue would help save about 14,000 jobs and preserve low-cost travel options for consumers at a time when higher fuel costs are pressuring the industry.
However, Transportation Secretary Sean Duffy has reportedly expressed concern over public backlash to supporting a carrier that had been struggling financially long before the recent fuel price surge.
Spirit, known for its no-frills, ultra-low-cost business model, has faced mounting financial strain from elevated operating costs, debt burdens and weaker consumer demand in the budget travel segment.