Spirit Airlines and the Trump administration are in advanced talks over a potential half-billion-dollar rescue package for the embattled budget carrier, The Wall Street Journal reported Wednesday.
Citing sources with knowledge of the discussions, the newspaper said the White House is considering loaning Spirit up to $500 million. In return, the U.S. government would receive warrants for a stake in the airline.
Direct federal investments in private-sector companies are rare but not unheard of, especially for the current administration, which bought stakes in chipmaker Intel and mining and manufacturing company USA Rare Earth. But unlike Spirit, neither of those companies is in bankruptcy.
The Air Current broke the news late last week that Spirit had asked the administration for help, but it was not clear until the Journal’s report if any negotiations were taking place.
Spirit was set to emerge from its second stint in bankruptcy protection this spring, but the recent surge in jet fuel prices has put the carrier’s very survival in question. Reports circulating last week suggested the airline could opt for liquidation within a matter of weeks.
President Donald Trump told CNBC on Tuesday that he would “love” for another airline to buy Spirit. He also suggested that the federal government could intervene to help the carrier, though he did not elaborate on what that assistance could look like.
CBS News reported Tuesday that Trump had instructed the U.S. Department of Transportation to review possible options for Spirit.
“He’s directed us to take a look,” Transportation Secretary Sean Duffy told the network. “I’ll have a conversation with the president later today.”
Duffy was also scheduled to meet with representatives from several budget carriers Tuesday to discuss the impact of higher fuel prices on their operations and financial health.
