The Trump administration is close to finalizing a rescue package for Spirit Airlines that includes up to $500 million in government loans. The financing would come with warrants allowing the government to acquire as much as 90 percent of the airline once it emerges from bankruptcy.

President Donald Trump met Tuesday evening with Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy to discuss terms for the deal, according to people familiar with the matter. Trump had signaled support for aid during a CNBC interview the same day, stating, "I’d love somebody to buy Spirit. It’s 14,000 jobs, and maybe the federal government should help that one out."

Spirit Airlines, the ultra-low-cost carrier known for its yellow planes and add-on fees, filed for Chapter 11 bankruptcy in late 2024 and again in August 2025 after briefly exiting protection. The airline planned to emerge from restructuring by mid-2026 but now faces liquidation risks due to jet fuel prices that have more than doubled to around $4.24 per gallon, driven by the U.S.-Israeli conflict with Iran. The surge has added hundreds of millions in unexpected costs, threatening creditor agreements.

Spirit has cut flights drastically, shed aircraft, and raised fares amid engine groundings from Pratt & Whitney issues, heavy debt, and competition from rivals like Frontier. A proposed $3.8 billion merger with JetBlue was blocked in 2024 by the Biden Justice Department and a federal judge over antitrust concerns. The White House has blamed that decision for exacerbating Spirit's woes.

The proposed bailout marks a rare intervention for a single airline, differing from broad industry aid during 9/11 and COVID-19. White House press secretary Karoline Leavitt said the administration is tracking the aviation sector, which millions of Americans rely on.

Transportation Secretary Duffy expressed caution, warning against throwing "good money after bad" and questioning if aid would forestall the inevitable, especially since no private buyer has emerged. United Airlines CEO Scott Kirby criticized the plan, calling Spirit's model "fundamentally flawed" and arguing that well-run carriers remain profitable.

J.P. Morgan analysts warned the deal could distort competition and prompt similar requests from JetBlue or Frontier. Shares of rival low-cost airlines fell sharply on the reports, with Frontier dropping 11.8 percent.

Spirit declined to comment on the negotiations but affirmed normal operations for bookings and travel. Negotiations continue, with no final agreement reached as of Wednesday evening.