Low-cost airlines plunge on report Trump administration is close to $500 million rescue deal for Spirit
Low-budget US airlines are sinking on Wednesday morning following a Wall Street Journal report that the Trump administration is close to making a rescue deal for Spirit Airlines, which is said to be nearing liquidation amid high fuel costs.
Shares of Frontier, Allegiant, JetBlue, and Southwest Airlines all dropped notably.
Per the WSJ, the US government could soon loan Spirit up to $500 million in return for warrants to take a sizable stake in the airline, which has filed for bankruptcy twice since late 2024. Those warrants could give the US government the ability to purchase as much as 90% ownership of Spirit, Bloomberg reports. The carrier has made efforts to emerge from its latest bankruptcy, filed in August, but fuel costs amid the war in Iran have upset the math.
On Tuesday, President Trump told CNBC he would “love somebody to buy Spirit.”
Per the WSJ, the US government could soon loan Spirit up to $500 million in return for warrants to take a sizable stake in the airline, which has filed for bankruptcy twice since late 2024. Those warrants could give the US government the ability to purchase as much as 90% ownership of Spirit, Bloomberg reports. The carrier has made efforts to emerge from its latest bankruptcy, filed in August, but fuel costs amid the war in Iran have upset the math.
On Tuesday, President Trump told CNBC he would “love somebody to buy Spirit.”
