U.S. Government Considers Defense Production Act Loan for Spirit Airlines Amid Bankruptcy

U.S. officials familiar with the discussions said. President Trump is open to some type of federal action regarding the airline, several sources stated. He said publicly he would 'do it to save the jobs' in reference to Spirit Airlines.

Spirit Airlines declared bankruptcy twice in the past two years. The Department of Justice blocked a merger between Spirit Airlines and JetBlue during the Biden administration. Earlier this month, creditors expressed serious doubts that Spirit Airlines could remain viable.

U.S. government to direct industrial production during national emergencies, typically for defense purposes. It includes providing loan authority to private firms for national defense. The strategy to use the Defense Production Act for Spirit Airlines would be subject to approval from Spirit's creditors, two of the officials said.

The Office of Management and Budget has explored what a federal bailout of Spirit Airlines would look like. The Office of Management and Budget has discussed possibilities for a federal bailout of Spirit Airlines that would include Commerce Department and Pentagon involvement. The government would lend Spirit Airlines $500 million at a reasonable interest rate as part of the bailout.

The government would become the top debtor in Spirit Airlines' bankruptcy pecking order as part of the bailout. The loan to Spirit Airlines would be protected by Spirit assets that exceed the government's costs. The bailout would provide taxpayers with a warrant, the right to own 90% of Spirit Airlines after it emerges from bankruptcy.

The Pentagon would use Spirit Airlines' excess capacity for transporting troops, military cargo, or other missions, sources said. Commerce Secretary Howard Lutnick and the White House have advocated for proceeding with the bailout of Spirit Airlines. Transportation Secretary Sean Duffy argued against the bailout of Spirit Airlines.

' At the end of 2025, Spirit Airlines owned 48 planes and leased 83 planes, one official said. In early April, Spirit Airlines and United Airlines executives approached White House officials with part of a liquidation plan that would include selling Spirit's slots at Newark Airport. Slots are scheduled times for airlines to take off or land at a given airport.

Trump officials rejected the idea of selling Spirit's slots at Newark Airport as part of the liquidation plan, one of the sources said. The federal government owns slots at airports. Slots would be preserved to make Spirit Airlines more attractive for a future owner, one of the sources said.