Clock ticks on Spirit Airlines as bondholders weigh Trump bailout
A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
Kevin Carter | Getty Images News | Getty Images
Spirit Airlines‘ future is hanging in the balance over the next week as President Donald Trump said the government could bail out the airline and the struggling discount carrier‘s lenders are assessing a potential deal.
“We’re thinking about doing it, helping them out, meaning bailing them out, or buying it,” Trump told reporters in the Oval Office on Thursday.
“I’d love to be able to save those jobs. I’d love to be able to save an airline. I like having a lot of airlines, so it’s competitive,” Trump said.
The White House and major bondholders either didn’t immediately comment or declined to comment on the matter.
Trump told reporters that “when the price of oil goes down,” the government could “sell [Spirit] for a profit.”
Spirit expected to emerge from bankruptcy mid-year, but that was before the U.S.-Israel attacks on Iran led to a surge in jet fuel costs. Spirit had a nearly $28.3 million operating loss in February, according to a court filing, which was before the fuel price spike hit carriers — and travelers’ wallets.
Spirit, the iconic budget carrier known for its bright yellow planes and bare-bones service that became a punchline for late-night comedians, has struggled to survive. The industry’s costs ballooned after Covid, as customer tastes changed for more upmarket offerings and international destinations.
Spirit has aggressively axed its costs, selling aircraft and shrinking its network. Last May, Spirit operated 19,575 flights, according to aviation data-firm Cirium. This May, it’s operating 9,353.
A planned acquisition of Spirit by JetBlue Airways was successfully challenged by the Biden administration, which the Trump administration said hurt Spirit.
“Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue,” a White House spokesman said by email. “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.”
Will others follow suit?
Some industry members and analysts have suggested other airlines, especially low-cost carriers, could seek similar assistance from the government.
Low-cost airlines met with Transportation Secretary Sean Duffy earlier this week to discuss the current surge in fuel costs, people familiar with the matter told CNBC.
The Trump administration has taken stakes in companies it views as a national security interest, while companies from automakers to banks to the airline industry as a whole have received bailouts in the past, but it’s highly unusual that the government would rescue a single company.
Delta Air Lines and United Airlines account for most of the airline industry’s profit in the U.S.,…
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