Spirit Airlines Pursues $500 Million in U.S.-Supported Financing in Bankruptcy

U.S. a stake of up to 90% in the company. The airline's lawyer told bankruptcy court that Spirit needs new financing or access to $240 million by the end of next week, warning that liquidation could eliminate more than 14,000 jobs.

Spirit has lost its competitive difference, and they don’t really know where they are,” said a former Virgin Group communications executive.

The executive added that in Europe, low-cost carriers have built strong positions to weather challenges. “In Europe, three of these big ultra-low-cost or low-cost carriers have got strong, dominant positions,” he said. He noted that Spirit's original appeal has faded.

“You once had a big enough discount that people were willing to say, ‘I’m going to save money. I’m going to get on Spirit. I’m going to fight for my seat,” the executive said. The executive distinguished the potential aid from past industry-wide support.

“The bailouts that worked,” he said, “after 9/11 or Covid, happened across an industry,” he said. “This one is slightly different. In contrast, Ryanair expects to be profitable and nearly debt-free this year, while EasyJet beat annual profit expectations in 2025 and remains a FTSE 100 company.

The Justice Department blocked JetBlue’s planned $3.8 billion acquisition of Spirit in 2022, arguing the deal would have caused tens of millions of travelers to face higher fares and fewer choices. Precedent for federal airline support includes the Covid-era Payroll Support Program, which awarded $59 billion in three rounds of assistance to the domestic aviation industry.

After 9/11, the Air Transportation Stabilization Board was authorized to issue up to $10 billion in federal loan guarantees to air carriers that suffered losses from the attacks, and Treasury testimony said it ultimately issued six loan guarantees totaling $1.56 billion.