Trump Administration Nearing Rescue Deal for Spirit Airlines
Category: News & Politics
Via: hallux • 7 months ago • 10 commentsBy: Alison Sider, Brian Schwartz and Andrew Scurria - WSJ
S E E D E D C O N T E N T
The Trump administration is nearing a rescue deal for Spirit Airlines, people familiar with the matter said.
Under the agreement being discussed, the U.S. government would loan the embattled discount carrier as much as $500 million, receiving in return warrants to take a potential significant stake in Spirit, the people said.
The Transportation Department and Commerce Department are involved in the discussions, which aren’t yet final, and the terms of any agreement could still change.
President Trump met Tuesday night with Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy to hash out a deal to keep Spirit Airlines alive, according to people with knowledge of the talks.
“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,” White House spokesman Kush Desai said Wednesday. The White House didn’t immediately respond to further requests for comment.
Trump in his second term has shown willingness to take financial ownership positions in companies his administration considers strategically important. Last year the federal government became Intel’s largest shareholder, acquiring nearly 10% of the semiconductor manufacturer’s shares by converting $8.9 billion of 2022 Chips Act grants into equity. It also invested in a semiconductor manufacturing startup founded by a former Intel chief executive.
The Commerce Department struck an agreement earlier this year to acquire a stake in a rare-earth metals producer, while the Pentagon reached a separate deal last year for a stake in another rare-earth mining company.
While the government has helped the airline industry in times of crisis, like the aftermath of the Sept. 11 terrorist attacks and the Covid-19 pandemic, rescuing Spirit would be a rare intervention to prop up a single carrier.
Trump said Tuesday he was troubled by the idea that Spirit, which employs about 14,000 people, could go out of business. “Maybe the federal government should help that one out,” he said on CNBC.
And officials have blamed the Biden administration for helping land Spirit in its current quagmire. JetBlue Airways in 2022 agreed to acquire Spirit in a $3.8 billion deal, but the Justice Department challenged it, arguing that the combination would hamper competition and would lead to higher fares. A federal judge agreed and blocked the deal .
“Spirit is a small airline. But there are those who love it. To those dedicated customers of Spirit, this one’s for you,” U.S. District Judge William Young, of the U.S. District Court for the District of Massachusetts, wrote in his 2024 decision.
Spirit has struggled to find its footing since then. It faced an outsize impact from a problem discovered in some Pratt & Whitney engines, which grounded a chunk of its fleet. Years of competitive pressure from larger rivals has challenged budget airlines’ business models.
“Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue,” Desai said Wednesday.
Known for its bright yellow planes and cut-rate fares, Spirit filed for chapter 11 bankruptcy in late 2024 after struggling under a multibillion-dollar debt load. The company exited court protection a few months later, but continuing high lease costs and continued debt burden led Spirit back to bankruptcy last August.
Since then Spirit has sold off planes, streamlined its operations and raised airfares . But the surge in jet fuel prices driven by the war in Iran has heaped higher costs on airlines, compounding Spirit’s challenge and threatening the agreement Spirit had reached with its creditors.
The company in recent weeks has been in talks with creditors , who were considering options including a potential liquidation, The Wall Street Journal and other news organizations have reported.
Fuel ranks among airlines’ biggest costs, and the U.S. and Israel’s war on Iran drove jet fuel prices to more than double in a matter of weeks. Industry officials have estimated that it could be months before global supplies come back into balance.
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Ah yes, Trump the super rich commie pinko bailing out private industry ... can't get more conservative than that.
I didn't know Obama was also a super rich commie pinko...and conservative...when it comes to bailing out private companies.
From Chat GTP..
Barack Obama’s administration provided major financial assistance to several companies—most notably General Motors, Chrysler, AIG, and multiple large banks—primarily through the Troubled Asset Relief Program (TARP).
What Obama’s administration did
Although TARP was created under President George W. Bush in 2008, the bulk of the bailout spending and management occurred during Obama’s presidency, beginning in January 2009. Under his administration, the federal government continued disbursing funds, restructured companies, and oversaw repayment programs.
Key companies that received bailout funds under Obama
General Motors (GM) — Received about $50.7 billion in federal assistance. GM later repaid much of the aid, though the government ultimately took a loss on part of the investment.
Chrysler — Received roughly $10.7 billion. Like GM, Chrysler went through a government-managed bankruptcy and restructuring.
AIG (American International Group) — Received $67.8 billion in TARP-related aid during the crisis period. The Obama administration continued the rescue and restructuring process.
Major U.S. banks, including:
Citigroup — $45 billion
Bank of America — $45 billion
JPMorgan Chase — $25 billion
Wells Fargo — $25 billion These funds were part of stabilizing the financial system after the 2008 collapse. Many banks later repaid their assistance with interest.
Ah yes, the GM bailout that Trump called a travesty.
Stick to the subject matter bugsy.
ODS.
I can't have healthcare, but a notoriously shitty airline gets bailed out. Shit like this was supposed to be what the Tea Party was so angry about. Guess they didn't actually mean it.
I am so sick of this administration!
Whats in it financially for the Trump family? - thats all that mattters.
Well Melania landed Noam's wee jet, now the rest of the family want one too.
Ladies and gentlemen, COMMUNISM....
Trump administration keeps taking steps where the government owns or has higher and higher stakes and control over private corporations.
Follow the money into Trumps pockets, it sounds simplistic but that is always the best place to start.