The Trump administration is close to finalizing a financial rescue package for hard-pressed Spirit Aviation, according to people familiar with the matter.
The deal, which has not yet been finalized, calls for offering up to $500 million in financing in exchange for share purchase warrants, said the sources, who spoke on condition of anonymity to describe the terms ahead of the official announcement.
O Wall Street Journal was the first to report the rescue measure. President Donald Trump said Tuesday that he was open to offering federal assistance to the airline.
Spirit’s shares rose as much as 57% on the prospect of a government bailout that could help avoid a possible liquidation. THE Bloomberg News had previously reported that Spirit was at risk of liquidation due to the rise in the price of aviation kerosene, driven by the US war with Iran, and that the company even suggested that the government take a stake in the company, which has been seeking an emergency package from the Trump administration.
Scott Kirby, CEO of United Airlines, said Spirit’s problems stem from flaws in its ultra-low-cost business model, known for offering dirt-cheap fares and charging for additional items such as assigned seats and in-flight snacks.
“Spirit’s problems come from before the fuel price boom,” Kirby said in an interview with Bloomberg TV this Wednesday (22). “It would fail because the business model doesn’t work.”
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Spirit was poised to emerge from bankruptcy protection this summer after reaching a deal with creditors to reduce billions of dollars in debt and cut fleet costs. The company filed for Chapter 11 recovery in August 2025 — the second time in less than a year.
In the past, the company tried to merge with other airlines, but the attempts did not result in an agreement. Before filing for bankruptcy protection, Spirit had signed a deal to be bought by JetBlue Airways Corp., but a federal judge blocked the transaction in 2024 on antitrust grounds.
“Spirit Airlines would be on much stronger financial footing today if the Biden administration had not irresponsibly blocked the merger with JetBlue,” White House spokesman Kush Desai said in a statement. “The Trump administration continues to monitor the status and overall health of the U.S. airline industry, which millions of Americans depend on every day for essential travel and their livelihoods.”
A Bloomberg News reported last year that Frontier and Spirit resumed merger talks, but no agreement was reached.
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