Spirit Airlines is running out of runway. That is bad news for travelers who depend on cheap fares. But it is no excuse for Washington to turn taxpayers into unwilling owners of a failing airline.
Yet that is reportedly on the table: a federal rescue that could leave Uncle Sam owning as much as 90% of Spirit.
That would be economic folly.
Americans do not want a boarding pass on Government Airlines. They want safe flights, low fares, and real competition. They do not want politicians and bureaucrats deciding which carriers survive and which corporate losses get dumped on taxpayers.
The irony is rich. Spirit’s current trouble was made worse by the same interventionist thinking now being offered as the cure.
Three years ago, Spirit had a private-sector lifeline. JetBlue wanted to buy it. The deal would have given Spirit a credible path to survival and stability. But the Biden Justice Department, cheered on by Pete Buttigieg’s Transportation Department, killed it. The Department of Transportation broke with decades of precedent by helping sink the merger.
The excuse was consumer protection. Regulators insisted Spirit’s ultra-low-cost model was too important to lose. Without Spirit, they warned, fares would rise, seats would disappear, and competition would suffer.
That was the theory. Reality has now landed. Hard.
Spirit was left alone in a brutal industry of high labor costs, expensive aircraft, volatile fuel prices, and relentless competition. The airline Washington claimed it was saving is bankrupt and may vanish altogether.
So what is Washington’s answer? Humility? Restraint? An admission that bureaucrats are poor substitutes for markets?
Hardly.
The new idea is more intervention: block the private-sector solution first, then put taxpayers on the hook when the company crashes. This is how bad policy becomes permanent policy.
The 2008 TARP bailout should have taught Washington a lesson. Emergency rescues create dangerous precedents. They tell executives and investors that risk is negotiable. Make good bets and keep the gains. Make bad bets and call Washington.
That’s not capitalism. It’s corporate welfare.
A Spirit bailout would bring that same poison to the airline industry. Worse, it would distort the very competition regulators claim to cherish. A government-backed Spirit could absorb losses, undercut rivals, and keep flying with advantages no private carrier can match.
That’s not competition. That’s subsidized sabotage.
And subsidized sabotage does not produce cheaper travel in the long run. It produces higher costs, weaker companies, and fewer choices as efficient private operators are forced to compete not against other private airlines, but against the federal treasury.
Markets are not painless. But they have one indispensable virtue: discipline. Companies that fail must restructure, find buyers, sell assets, or exit. Their planes do not disappear. Their gates do not disappear. Their routes do not disappear. In a functioning market, those assets move to stronger operators that can serve consumers better.
That is what bankruptcy is for. It allows companies to renegotiate debts, attract new capital, reorganize, or sell viable pieces of the business. It is unpleasant. It is also far better than putting a failed airline on the federal balance sheet.
The real issue is larger than Spirit. Does America still believe in markets, risk, and accountability? Or does every politically visible company now get a federal parachute?
Washington can block a merger in the name of competition, watch the company crumble, then rescue it with taxpayer money. The message is disastrous. Politics, not performance, will decide winners. Executives can gamble on bailouts. Taxpayers will be handed the bill.
The right answer is simple: let the market work.
Spirit should restructure, find private capital, sell assets, merge where legally appropriate or exit in an orderly fashion. What it should not become is another monument to Washington’s belief that it can run the economy better than the people who actually invest, build, and compete.
Low fares matter. Competition matters. Consumers matter. But none of them is served by putting bureaucrats and the Washington politicians in the cockpit.
Washington helped block Spirit’s safest landing. It should not now force Americans to pay for the wreckage.
Steve Forbes is Chairman and Editor-in-Chief of Forbes Media.
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