The Trump administration is nearing a rescue package for Spirit Airlines that could give the U.S. government the option to own as much as 90% of the carrier once it emerges from bankruptcy, according to people familiar with the matter.
The agreement, which has not yet been finalized, would offer as much as $500 million in financing in exchange for warrants to purchase up to 90% of the new entity, said the people, who spoke on condition of anonymity to describe the deal before it is announced. The talks are still fluid and an agreement might still not be reached. It’s also unclear what stake the U.S. might ultimately end up with.
President Donald Trump said Tuesday that he was open to offering federal assistance to the airline. U.S. Commerce Secretary Howard Lutnick is leading the effort for a possible government deal, the people said. There’s internal disagreement about whether to proceed, according to one of the people.
Lutnick was also a key player in the government’s decision to take a 10% stake in Intel Corp.
The potential federal intervention has significant implications for Westmoreland County, where Spirit Airlines serves as the sole commercial carrier at the Westmoreland County Airport Authority’s Arnold Palmer Regional Airport in Unity.
“Can they do that?” Westmoreland County Commissioner Ted Kopas said of the federal bailout proposal. “Certainly, given the relationship our airport has with Spirit, it is a concern to us that it stays in business. But I’m not sure the federal government owning an airline is the answer and, quite frankly, I’m not sure this can even be done. This is really coming out of left field.”
Kopas said Spirit’s continued presence is important for the county, which gives the airport authority a nearly $2.6 million annual subsidy. Those funds are used in part to pay personnel to work at Spirit’s airline ticket counter, reservation desk, and as baggage handlers, de-icing services and tarmac staff.
“I really hope Spirit can find a way to survive on its own, but my overall concern is to have a viable airline at the Arnold Palmer Regional Airport. The name on the planes doesn’t matter,” Kopas said.
Commissioner Sean Kertes said a potential bailout for Spirit could be good news for Westmoreland County, but cautioned there’s no guarantee to how the deal would be implemented.
“We’d like Spirit to stay here for consistency, but it’s really a wait and see,” Kertes said.
Commissioner Doug Chew did not immediately return a call seeking comment. Arnold Palmer Regional Airport Executive Director Gabe Monzo declined to comment.
Spirit Aviation Holdings Inc.’s shares jumped as much as 57% on the prospect of a government lifeline that could help it avoid a potential liquidation.
A spokesperson for the airline declined to comment. The White House did not immediately respond to requests for comment.
The Wall Street Journal first reported that the Trump administration was close to reaching a deal on Spirit. Bloomberg News previously reported that Spirit was at risk of possible liquidation due to rising jet fuel prices spurred by the U.S. and Israeli war with Iran and that the carrier had floated the idea of the government taking a stake in the company, which has sought an emergency bailout.
Scott Kirby, chief executive officer of United Airlines Holdings Inc., said Spirit’s troubles stem from flaws in the ultra low-cost carrier’s business model known for offering cut-rate fares while charging customers for extras, such as assigned seating and in-flight snacks.
“The problems at Spirit predate the run-up in fuel,” Kirby said in a Bloomberg Television interview on Wednesday. “It was going to fail because the business model doesn’t work.”
Spirit had been poised to exit bankruptcy this summer after reaching an agreement with creditors on a plan to trim billions of dollars in debt and reduce the cost of its fleet. The carrier filed for Chapter 11 bankruptcy protection in August 2025 — the second time it did so in under a year.
The carrier in the past had tried to merge with other airlines but those efforts failed to result in a deal. Before filing its first bankruptcy, the carrier agreed to be acquired by JetBlue Airways Corp., but a federal judge blocked the tie-up in 2024 on antitrust grounds.
“Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline’s merger with JetBlue,” White House spokesman Kush Desai said in a statement. “The Trump administration continues to monitor the situation and overall health of the U.S. aviation industry that millions of Americans rely on every day for essential travel and their livelihoods.”
Bloomberg News reported last year that Frontier Group Holdings Inc. and Spirit had revived talks to merge, though no deal ever emerged.
Staff writer Rich Cholodofsky contributed.