Spirit Airlines close to a $500 million bailout from Trump administration
By Chris Isidore, CNN
(CNN) — Spirit Airlines is close to getting a $500 million bailout from the federal government, according to a source familiar with the negotiations.
The deal is expected to include the federal government taking a stake in the troubled airline, which had struggled to make money ever since the Covid pandemic.
It also means Spirit avoids becoming the first significant US airline in 25 years that was forced to completely halt operations because of financial problems. Jet fuel costs have roughly doubled since the start of the war in Iran, derailing its plans to emerge from its second bankruptcy reorganization since 2024.
The source told CNN a deal could be announced as soon as late Wednesday night or Thursday. It is designed to give the airline a chance to complete its reorganization.
A shutdown of the airline will put thousands of Spirit employees out of work and leave millions of passengers that hold Spirit tickets scrambling to make other travel arrangements. It would also likely push up fares across the US airline industry.
But while a potential deal could be good for passengers and Spirit employees, it is likely to cause backlash across the rest of the airline industry. All airlines are struggling with higher fuel costs. Fuel is the second largest cost for airlines, behind only labor.
Past bailouts of US airlines have been done on an industry-wide basis, not in support of a single, relatively small carrier. And previous bailouts have come as passengers were afraid to fly in the wake of terrorist attacks and a pandemic, not because of high costs.
This is a developing story. It will be updated.
The-CNN-Wire
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