Spirit Airlines bailout talks: Trump weighs taxpayer-funded takeover amid bankruptcy review

US President Donald Trump said the administration was still assessing a taxpayer-funded takeover of Spirit Airlines. Talks were continuing, and no final decision was made on a possible bailout. Spirit was in bankruptcy proceedings for a second time in under two years. Trump said an update could come later on Friday or Saturday.

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Speaking to reporters before leaving the White House for Florida, Trump said, "Were looking at it. If we could do it, well do it. But only if its a good deal,\". Trump also said, \"If we can help them, we will,\". Trump added, \"But we have to come first.\"

Spirit Airlines bailout talks and possible government takeover

The idea became public last week after Trump raised the option of a federal financial lifeline. A lawyer for the airline later told a US Bankruptcy Court that Spirit was in advanced discussions with the government. The talks involved financing that could help Spirit exit Chapter 11 protection. Trump said the administration delivered what Trump called a final proposal.

Trump suggested the government could later sell the airline for a profit. Trump linked that prospect to oil prices rising due to the Iran war. Trump said lower oil prices later could improve the airline’s value. Spirit is known for bright yellow planes and a no frills service model. Trump did not share deal terms or funding amounts.

Spirit Airlines bankruptcy filings, debt and operating pressure

Spirit has struggled since the COVID-19 pandemic amid higher costs and rising debt. When Spirit filed for Chapter 11 protection in November 2024, losses exceeded USD 2.5 billion since 2020. Spirit sought bankruptcy protection again in August 2025. Court filings listed USD 8.1 billion in debts and USD 8.6 billion in assets.

Shortly before that filing, the parent company warned about Spirit’s ability to keep operating. A quarterly report cited \"substantial doubt\" about survival over the next year. It pointed to weak leisure domestic travel demand. It also referenced ongoing uncertainty around business operations. These market pressures added to the airline’s financial strain.

Spirit Airlines passenger decline, capacity cuts and Cirium data

About 1.7 million passengers flew domestically with Spirit Airlines in February, Cirium reported. That was around 500,000 fewer than the same month a year earlier. Spirit also cut capacity by 51.6 per cent year over year, Cirium said. The firm said seats scheduled this month were 1,646,878 versus 3,399,378 in May 2025.

Rising jet fuel costs tied to the Iran war have increased pressure on Spirit. Creditors last month questioned whether the airline could keep operating. That raised the risk of asset sales and a shutdown. A Spirit spokesperson in Dania Beach, Florida, declined to discuss talks on Friday. The spokesperson said Spirit was operating as usual.

Political criticism has grown around the use of taxpayer money for an ultra-low cost airline. Some lawmakers from both parties, and some in the Trump administration, opposed a rescue. Supporters, including unions for pilots and flight attendants, warned of job losses. They also said a collapse could reduce competition and raise fares, as Spirit’s costs and debts build.

With inputs from PTI