The Trump administration is exploring the possibility of utilizing wartime emergency legislation to provide financial assistance to Spirit Airlines as the budget carrier struggles through bankruptcy proceedings, according to a source familiar with the matter.
Officials are examining whether Title 3 of the Defense Production Act could serve as the legal framework for government intervention, the source revealed. This provision enables federal investment in industrial infrastructure to maintain supply chains critical to national security.
White House spokesperson Kush Desai confirmed the administration “continues exploring possible options to ensure the airline remains in operation for its passengers and employees.” However, he cautioned that reports regarding specific financing mechanisms should be considered speculative.
The Defense Production Act grants the federal government emergency powers to direct private companies to prioritize government contracts and increase production of essential goods. The legislation also authorizes loans to private businesses for national defense objectives, which could potentially benefit the struggling airline.
During remarks to reporters at the White House on Thursday, Trump indicated his administration was evaluating the possibility of purchasing the troubled carrier at the “right price.” He added, “When the price of oil goes down, we would sell it for a profit.”
Time is running out for the Florida-headquartered discount airline. A Spirit representative stated Thursday that the company requires new financing or access to existing cash reserves by the conclusion of next week. A court session is scheduled for the coming week as attorneys representing the airline and its creditors work toward finalizing a bankruptcy exit strategy.
The administration has presented a financing proposal to assist Spirit’s emergence from bankruptcy, which major creditors are currently evaluating, according to an external attorney representing the airline.
An attorney representing Spirit’s creditors confirmed Thursday that they had examined a term sheet outlining the government’s proposal. Sources indicate the offer includes $500 million in financing, with the condition that the government would receive warrants equivalent to 90% of Spirit’s ownership stake.
The senior debtor-in-possession funding would facilitate Spirit’s exit from its second bankruptcy restructuring since 2025.
