By FrumNews.com

Florida-based Spirit Airlines is in advanced discussions with the Trump Administration over a potential federally backed loan package of up to $500 million to help it survive its second bankruptcy and possible restructuring amid high oil prices and an urgent cash shortfall.

The struggling ultra-low-cost carrier (ULCC) is seeking approx $500 million in government-backed funding to help it survive the crisis, according to a filing made in bankruptcy court. A lawyer representing Spirit said financing could stabilize the airline and position Spirit as a stronger competitor in the ULCC market.

According to the WSJ, the Trump administration is nearing a rescue deal for Spirit Airlines that would involve a loan and warrants for a significant stake. Members of President Trump’s team aired differing views at a private meeting at the White House on Tuesday night, according to the Journal, regarding the plan to save Spirit Airlines.

For Spirit, the need for funding is immediate. Spirit requires access to hundreds of millions of dollars within days to continue operating, avoid liquidation and prevent a massive drop in competition in the US airline market.

Furthermore, the airline was prevented from merging with JetBlue by a federal judge in 2024 when the Biden admin brought them to court.

Spirit’s struggles were compounded by a sharp rise in jet fuel costs—due to the Iran war. Higher costs have been incurred due to engine issues on some jets and increased competition from legacy carriers.

Under the proposed deal, the federal government could receive a stake in the airline that may translate into a stake in the struggling airline. Supporters, including labor unions, argue the move is necessary to preserve jobs and maintain competition in the airline industry.

Trump confirmed his admin is direct talk, “They have some good aircraft and good assets, and when the prices of oil goes down, we’ll sell it for a profit,” Trump said at an Oval Office event. “I’d love to be able to save those jobs. I’d love to be able to save an airline.”

“And we’re looking, if we could get it for the right price, I’d do it to save the jobs,” the president added.

Some Republicans have quickly delivered an apparent brushback pitch against the Trump administration’s idea to bail out Spirit.

“This is an absolutely TERRIBLE idea,” Sen. Ted Cruz of Texas posted on X (Twitter). “The TARP corporate bailouts [which bailed out the banks in 2008] were a huge mistake & the government doesn’t know a damn thing about running a failed budget airline (that the Biden admin killed).”

Sen. Tom Cotton of Arkansas was a little less adamant. “If Spirit’s creditors or other potential investors don’t think they can run it profitably coming out of its second bankruptcy in under two years, I doubt the US Government can either.”

“Not the best use of taxpayer dollars,” Cotton added.

The talks remain ongoing, with no standard agreement announced, leaving the airline’s future uncertain as pressure mounts in the immediate future.