Spirit offers equity stake in exchange for US government aid, report says
Spirit Airlines is seeking aid from the U.S. government as it struggles to stay in business. The airline is even willing to give the government an equity stake, according to a new report.
Spirit is facing the imminent possibility of running out of cash and being forced to shut down and liquidate assets, as a surge in jet fuel prices since the start of the U.S.-Iran war has imperiled the airline's plans to emerge from bankruptcy this summer and return to profitability. It is not clear whether the airline can convince its creditors to extend more cash to cover fuel costs.
In exchange for an infusion of cash from the U.S. to help cover those rising costs, the airline has floated giving the government an equity stake in the airline, Bloomberg reported Monday.
What to know: Spirit Airlines could shut down imminently, reports say — here's what to do if you're scheduled to fly with them
Aviation publication The Air Current first reported on Friday that the airline was turning to the government for help staying afloat. Spirit and other low-cost carriers are expected to meet with Transportation Secretary Sean Duffy this week, the publication reported.
While airline around the world have been forced to truncate schedules, ground jets and implement fuel surcharges as costs have climbed following the first U.S. strikes on Iran, low-cost airlines have fewer levers to pull to offset fuel prices. Those budget airlines' business models are predicated on keeping costs low to make tight profit margins — fuel typically represents up to around a third of airlines' operating expenses, second only to labor.
According to Bloomberg, the Association of Value Airlines, which represents Spirit and rival Frontier, among other budget carriers, has asked congressional representatives to waive some taxes and fees until prices go back down, warning of "higher trip costs for passengers" without relief.
Jet fuel prices were averaging $3.79 per gallon as of April 17, according to the Argus U.S. Jet Fuel Index, up from $2.50 on Feb. 27, the day before the strikes on Iran.
Spirit in particular has struggled to turn a profit since the start of the COVID-19 pandemic in 2020, and it has filed for bankruptcy twice since late 2024, most recently in August.
The Florida-based airline had hoped to exit its second bankruptcy by this summer after reaching an agreement with creditors in late February; it was in the process of shrinking its fleet and reconfiguring its network in an effort to find a more viable business model. The airline had also tried to merge with rival JetBlue, citing an existential threat if it remained on its own, but the merger was blocked by a federal judge in 2024 after the Biden administration sued on antitrust grounds.
In an email, a spokesperson for the Department of Transportation said that the agency was monitoring Spirit's situation.
Related reading: