April 22 (Reuters) - The Trump administration has neared a deal to rescue embattled low-cost carrier Spirit Airlines, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
The U.S. government will lend Spirit as much as $500 million in exchange for warrants to take a potential stake in the carrier, according to the report.
U.S. President Donald Trump told CNBC on Tuesday that he would like someone to acquire Spirit and said it was possible that the federal government
could get involved, the latest example of the Trump administration's intervention in public companies.
Global carriers are contending with surging jet fuel prices after U.S.-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz. Spirit has said it plans to shrink its fleet to about one‑third of its pre‑bankruptcy size, retaining roughly 76 to 80 aircraft by the third quarter of 2026.
The carrier built its turnaround plan based on fuel costs averaging about $2.24 per gallon in 2026 and $2.14 in 2027, according to its March disclosures. By mid-April, jet fuel prices were around $4.24 a gallon, roughly double the level assumed in its projections.
White House spokesperson Kush Desai said the Trump administration continues to monitor the situation and overall health of the U.S. aviation industry.
Desai added that Spirit would have a "much firmer financial footing" had the Biden administration not blocked its merger with JetBlue.
United Airlines' CEO Scott Kirby too chimed in on a post-earnings call and said that he was not sure about the outcome of the government's bailout for Spirit.
Kirby called Spirit's business model fundamentally flawed and said it was not going to be able to make it or cover cash operating costs.
Spirit, best known for its bright yellow all-Airbus fleet, built its brand around affordable fares for budget-conscious travelers ready to eschew add-ons such as checked bags and seat assignments.
Spirit declined to comment on the matter but said it was operating normally.
(Reporting by Nathan Gomes in Bengaluru; Editing by Shreya Biswas and Devika Syamnath)
