New throughout, adds details, context and lawmakers’ comments
By David Shepardson
A number of American lawmakers have expressed concern about a potential government bailout of bankrupt airline Spirit Airlines, with the Republican chairman of the Senate commerce committee calling the idea “terrible.”
“This is an absolutely terrible idea,” Senator Ted Cruz said on social media. He added that “the government knows absolutely nothing about managing a low-cost bankrupt airline.”
Reuters reported that President Donald Trump’s administration was nearing a deal to rescue low-cost airline Spirit Airlines, which could include up to $500 million in government-backed funding to help it emerge from bankruptcy, its second restructuring since 2025.
It would likely be a loan to allow Spirit to continue operating during bankruptcy, which would then become a longer-term loan when the airline emerges from bankruptcy, with warrants giving the U.S. government a potential stake of up to 90%, sources said.
The White House and Spirit did not immediately comment.
Republican Senator Tom Cotton said, “If Spirit’s creditors or other potential investors don’t think they can run the company profitably coming out of its second bankruptcy in less than two years, I doubt the U.S. government can either. This is not the best use of taxpayer money.”
Democratic Senator Elizabeth Warren said, “Donald Trump’s war with Iran caused the steep rise in fuel prices that ultimately spelled the end for Spirit Airlines.” She added, “What does the American people get out of this taxpayer-funded bailout? Will the airline’s failed executives be held accountable?”
Transportation Secretary Sean Duffy, in an interview with Reuters on Tuesday, expressed serious concerns about a potential bailout. “What we don’t want to do is throw good money after bad, and there has been a lot of money thrown at Spirit, and they haven’t figured out how to be profitable. So should we not just face the inevitable and become owners?” Mr. Duffy said. “We can’t make dumb investments.”
According to Mr. Duffy, it appears that no one wants to buy Spirit. “What would someone buy?” Mr. Duffy asked. “If no one wants to buy it, why would we buy it?”
