The Trump Administration may offer Spirit Airlines a $500 million financial lifeline as the carrier teeters on the brink of collapse, according to reports.
The federal government is considering providing the airline with a convertible financing facility that would allow it to convert debt into equity. According to Bloomberg, the arrangement could give the government the option to acquire a significant ownership stake in the airline, potentially as much as 90% of a restructured entity.
Transportation Secretary Sean Duffy and Commerce Secretary Howard Lutnick are leading the talks and reportedly met with President Donald Trump on Tuesday night to discuss the proposal.
Trump signaled support for potential federal assistance earlier this week, saying, “Maybe the federal government should help that one out,” while raising concerns about the possible loss of roughly 14,000 jobs.
Spirit Aviation Holdings Inc.’s shares jumped more than 500% following reports of the potential deal.
Spirit’s financial troubles date back several years, and the airline has accumulated more than $7 billion in debt. A planned $3.8 billion acquisition by JetBlue in 2022 was ultimately blocked by the Biden administration’s Department of Justice and later upheld by a federal judge in 2024. Former Attorney General Merrick Garland described the acquisition’s termination as a “victory on behalf of the American consumer,” arguing the merger would lead to increased fares for customers.
More recently, rising fuel costs tied to the war in Iran have added pressure, with JPMorgan analysts estimating those expenses could increase by as much as $360 million.
If negotiations pan out, Spirit Airlines will join a growing list of private companies in which the United States has taken a financial stake in recent years, including Intel, MP Materials, Lithium Americas, Trilogy Metals, and a “golden share” in U.S. Steel, recently acquired by Japan’s Nippon Steel.
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