The Trump administration is negotiating a deal that would provide as much as $500 million to the struggling company, which is in its second bankruptcy in two years.
Spirit Airlines is in advanced talks to secure a loan of as much as $500 million from the Trump administration as part of last-minute efforts to avoid shutting down, two people familiar with the situation said Tuesday.
The move would be the latest in a series of government interventions in the private sector that President Trump has made in his second term. It could help prevent, or delay, the loss of thousands of jobs, but it would also raise questions about whether the government was spending money wisely. Spirit Airlines has been struggling for years and is in its second bankruptcy in two years.
The government’s loan would have a more senior claim to Spirit’s assets than loans the airline has taken from other creditors, the people said. The government would also receive the right to purchase a significant ownership stake in Spirit through financial instruments known as warrants, the people said on the condition of anonymity to discuss an ongoing deal. The government’s stake in Spirit could ultimately climb to 90 percent, one of the people said.
The goal of the agreement is to give Spirit enough money to establish a sustainable business plan, the people said.
Mr. Trump previewed the rescue on Tuesday, saying in an interview on CNBC that “maybe the federal government should help” the company. He also said he would “love somebody to buy Spirit.”
The airline declined to comment on Wednesday on the possibility of receiving federal aid. “We are operating our business as normal,” Spirit said in a statement. “Guests can continue to book, travel and use tickets, credits and loyalty points as usual.”