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The U.S. airline industry was counting on the death of Spirit Airlines.
That’s not an ideal outcome for the Trump administration, however. With the U.S. midterm elections looming, the White House hopes to avoid a messy liquidation of the Florida-based budget carrier that could come within a matter of days as it runs low on cash. Prospects for a deal are dimming, a person familiar with the talks told The Air Current.
To save the embattled low-cost carrier, the administration has explored a slew of options ranging from a $500 million government bailout to President Donald Trump’s suggestion of purchasing the carrier outright. The White House has also floated a possible merger with Spirit Airlines to several of its competitors — none of whom have been particularly receptive, according to multiple people familiar with the matter.
“The better question is, who haven’t I asked?” Secretary of Transportation Sean Duffy told reporters at an April 27 event in response to a question from TAC about administration overtures.
Related: Spirit Airlines seeks U.S. government aid as oil spike threatens turnaround
The prospect of heavy-handed government intervention to rescue Spirit is deeply unsettling for an industry already grappling with rising fuel prices triggered by the U.S.-Israel war with Iran, according to more than two dozen industry and government officials who spoke with TAC for this story. From larger airlines scouting acquisitions of their own to Spirit’s low-cost competitors seeking their versions of federal relief, the entire industry is staring down both crisis and opportunity.
Spirit’s counsel announced to a New York bankruptcy court on April 23 that the airline was in “advanced discussions” with the U.S. government on a financing package, but that proposal faces backlash from Spirit creditors, as first reported by Bloomberg News. Spirit has yet to file any description of the proposed funding with the court and on April 29 canceled a bankruptcy court hearing slated for Thursday, citing ongoing conversations with its unsecured creditors and lenders on the potential aid.
In the eyes of its competitors, Spirit is worth more dead than alive — and the White House is running out of time, and options, to save it.
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