MISSION FAILED

Airline Facing Collapse as $500 Million Trump Deal Falls Apart

The deal to save it has disintegrated.

Spirit Airlines is preparing to shut down after a proposed $500 million government rescue deal fell through.

The budget airline hoped to secure a lifeline from President Donald Trump’s administration, but that is now off the cards, according to The Wall Street Journal, citing people familiar with the matter.

The deal would have provided a cash infusion that would have converted into a stake of up to 90 percent, but it couldn’t secure enough support from the government and key bondholders.

FLIGHT RISK

Trump Eyes Federal Fix as Spirit Airlines’ Collapse Looms

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Speaking over the phone with CNBC in April, Trump, 79, said the federal government could step in to prevent the carrier from going out of business.

“I would love somebody to buy Spirit... Spirit’s in trouble,” he said, noting 14,000 jobs were in jeopardy. “Maybe the federal government should help that one out.”

But disagreements among government officials soon emerged, the Journal reports, over how the bailout would be funded and whether it should happen at all.

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The Daria Beach, Florida-based carrier spent much of the last year on the brink of bankruptcy, filing for Chapter 11 in November 2024 and again in August 2025, but was tipped over the edge by strong headwinds driven by skyrocketing jet fuel prices.

Trump’s war with Iran has closed off the Strait of Hormuz, cutting off around one-fifth of the world’s oil supply and creating a global energy crisis.

Meanwhile, the Journal’s sources said that some Spirit bondholders were reportedly also unsure about the deal.

Spirit, the sources said, is now running out of money, planning to sell its fleet of planes, and cease trading.

The timeline for the plans remains unclear at the time of writing.

Trump’s suggestion of a government-funded rescue deal did not go down well with MAGA, with one figure blasting it as a “horses--t” idea.

Republican chair of the Senate Committee on Commerce, Science, and Transportation, Ted Cruz, said it was an “absolutely terrible” idea and urged Trump to think again.

The staunch Trump ally told Semafor, “It is a terrible idea; corporate bailouts are a mistake.

“The federal government doesn’t know a damn thing about running a budget airline—so I hope that this ill-conceived idea is put back on the shelf.”

Sen. John Kennedy agreed, calling out Commerce Secretary Howard Lutnick after the Journal reported that he and Transportation Secretary Sean Duffy had lobbied for a bailout for the ultra-low-cost airline.

“Right now, we can’t pass gas around here, much less a bill doing a Spirit deal,” Kennedy said, adding, “Lutnick is giving the president incredibly bad advice.”

Rep. Troy Nehls wore a tie with Trump’s face on to February’s State of the Union address, but it wasn’t enough to stop him from breaking with the president over Spirit.

“Where does it end? I mean, next thing you know, we’ll be bailing out football teams. I’m not a big fan of it,” the Transportation and Infrastructure Committee member said.

The Points Guy noted that customers are often the last to get their money back in liquidation cases, but added that people who pay with a credit card are often afforded some protection.

The Daily Beast has contacted Spirit and the White House for comment.

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Harry ThompsonNews Reporter

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