The Trump administration is nearing a rescue package for Spirit Airlines that could hand the federal government the option to own as much as 90% of the carrier once it exits bankruptcy, according to people familiar with the matter reported by Bloomberg.
Spirit, which filed for bankruptcy protection after a failed merger attempt with Frontier Airlines, has been searching for a path forward as its low-cost model struggled against rising fuel costs and increased competition. A government-backed rescue of this scale would represent an unusual level of federal involvement in a commercial airline.
The potential ownership stake would come through a structured financial arrangement, giving the U.S. government significant control over the carrier's future direction once it completes the bankruptcy process. Details of the full rescue package were still being finalized as of Wednesday.
Spirit has operated as one of the country's largest ultra-low-cost carriers, known for its unbundled fare model and heavy presence in leisure travel markets. Its collapse has left millions of passengers scrambling for alternatives and raised questions about consolidation in the budget airline sector.
A 90% government ownership stake would dwarf previous federal interventions in the airline industry. Following the September 11 attacks, Congress passed the Air Transportation Safety and System Stabilization Act, which provided loan guarantees rather than direct ownership. During the COVID-19 pandemic, the federal government extended payroll support grants and loans but did not take controlling equity positions in carriers.
The arrangement, if completed, would give federal officials an unprecedented degree of influence over Spirit's route network, pricing strategy, and workforce decisions. It would also raise questions about how and when the government might seek to divest its stake.
No timeline for finalizing the deal has been publicly announced.
