New York, New York - Bargain US carrier Spirit Airlines, which filed for bankruptcy in 2025 for the second time in a year, could be spared by a controversial potential White House rescue package.
Donald Trump confirmed on Thursday that he was hoping Spirit could be saved, sparing thousands of jobs.
"I think we'd just buy it," Trump said in the Oval Office. "They have some good aircraft, have good assets, and when the price of oil goes down, we'll sell it for a profit."
Trump's administration has been working on a potential $500 million package for the embattled airline, media have reported in recent days.
Under a potential plan being discussed, the US government would make a loan to Spirit and receive warrants to take a large stake in the carrier, the Wall Street Journal reported.
Spirit had announced on February 24 an "agreement in principle" to restructure its debt with creditors, saying it expected to emerge from bankruptcy by early summer.
But only days later, the US-Israel alliance launched attacks on Iran, leading to a spike in oil prices.
That translated into a surge in jet fuel prices that proved to be "the straw that broke the camel's back," said Jan Brueckner, emeritus economics professor at the University of California, Irvine.
Jet fuel prices have more than doubled since the February 28 start of the war, prompting major US airlines to lower their profit forecasts, trim back on capacity growth plans, or both.
As a no-frills carrier, Spirit adds pressure on larger airlines, which have responded with bare-bones "basic economy" offerings, according to Brueckner.
"It's beneficial to preserve this type of competitive airline that helps keep fares low," Brueckner said.