According to a source, the United States is considering using the Defense Production Act as part

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(Adds a statement from the White House and contextual information)
by David Shepardson and Kanishka Singh

The administration of President Trump is considering using the Defense Production Act as the legal basis to bail out Spirit Airlines, a source told Reuters.

CBS News was the first to report on this project on Friday, citing American officials close to the discussions.

The source indicated that the government could invoke Title 3 of the Defense Production Act, which authorizes the U.S. government to invest in industrial capabilities to ensure supply chains for national defense.

The Trump administration “continues to explore possible options to ensure that the airline remains operational for its passengers and employees,” said White House spokesman Kush Desai.

He added that information regarding the mechanism or financing structure should be considered speculation.

The Defense Production Act is an emergency measure that allows the U.S. government to demand that private companies prioritize federal contracts and increase production of essential goods. It also allows for loans to be granted to private companies for national defense purposes, a measure that could support the airline.

Mr. Trump stated on Thursday that his administration is considering buying the struggling airline at a “reasonable price.”

“When oil prices drop, we will sell it to make a profit,” he told reporters at the White House.

The Florida-based low-cost airline is running out of time. A Spirit lawyer stated on Thursday that the company needs new financing or access to its liquidity by the end of next week, and a hearing is scheduled next week as the company’s attorneys and creditors seek to reach an agreement on a bankruptcy exit plan.

The Trump administration made a financing offer to help the airline emerge from bankruptcy, an offer that was under review by its major creditors, an external Spirit lawyer said on Thursday.

A Spirit creditor lawyer said on Thursday that they were reviewing a list of conditions from the government’s offer, which, according to some sources, includes $500 million in financing and a condition where the government would receive warrants equivalent to 90% of Spirit’s equity.

This priority financing provided to the debtor in possession of its assets would help Spirit emerge from its second bankruptcy restructuring since 2025.