Spirit Airlines races to secure $500 million government rescue as cash runs out

Key facts

• Spirit Airlines has only days of cash left to continue operations.
• A $500 million government rescue package is under negotiation, with warrants for 90% of Spirit's equity.
• A bankruptcy court hearing scheduled for Thursday was canceled as talks continue.
• Lenders have not filed a notice that could trigger liquidation in seven business days.
• President Trump said his administration is looking at buying Spirit at the 'right price'.
• The rescue faces bipartisan backlash in Congress.
• Spirit lawyer Marshall Huebner said the airline needs $240 million of its funds or new financing quickly.
• Budget airlines separately requested $2.5 billion in aid to cover jet fuel costs from the U.S.-Israeli war on Iran.

Time runs out for Spirit Airlines as cash reserves dwindle

Spirit Airlines is racing against the clock as its available cash can sustain operations for only a matter of days, not weeks. The Florida-based budget carrier said flights are currently operating normally and travelers can still book tickets, but the window to avoid a shutdown is narrowing rapidly. A bankruptcy court hearing scheduled for Thursday was canceled as the airline continues discussions with lenders over the terms of a potential $500 million U.S. government rescue. Spirit said in a court filing on Wednesday that talks are ongoing and that lenders have not yet filed a notice with a New York federal court that could trigger a liquidation of Spirit assets in seven business days.

Government rescue terms include 90% equity warrants

The proposed rescue package, which sources say includes $500 million in financing, would come with a condition that the government receive warrants equal to 90% of Spirit's equity. A lawyer for Spirit creditors said last week they had reviewed a term sheet of the government's offer. The senior debtor-in-possession financing would help Spirit exit its second bankruptcy restructuring since 2025. President Donald Trump said last week his administration was looking at buying the embattled airline at the 'right price,' though the possible rescue has faced pushback from members of Congress in Trump's own party.

17,000 jobs and billions in claims hang in the balance

Spirit lawyer Marshall Huebner warned last week that the airline quickly needs new financing or access to $240 million of its funds. A liquidation of Spirit would eliminate more than 17,000 jobs and generate billions of dollars in claims, he added. The exact number of days before a possible liquidation remains unclear, but the carrier has indicated it is running short on time. The potential collapse of Spirit would have significant ripple effects for the budget airline industry and its employees, as well as for travelers who rely on its low-cost services.

Bipartisan backlash on Capitol Hill complicates rescue

A possible bailout of Spirit has been met with bipartisan backlash on Capitol Hill, with lawmakers from both parties expressing skepticism about government intervention. The political opposition adds another layer of uncertainty to the negotiations, as the Trump administration would need congressional approval for any substantial financial assistance. Transportation Secretary Sean Duffy said Congress would need to get involved if the administration were to provide aid. 'I don't have that money — can't just pull it out of the couch cushions. There would have to be a lot of government engagement and a bipartisan effort to find the funds for them. You can't snap your fingers,' Duffy said Tuesday.

Broader industry seeks $2.5 billion in fuel-cost relief

Separately, budget airlines have asked the Trump administration for $2.5 billion in government aid to address the spike in jet fuel costs during the U.S.-Israeli war on Iran. This broader request underscores the financial strain on the low-cost carrier sector, which has been hit hard by rising operational expenses. Asked about the prospect of government assistance, JetBlue Airways CEO Joanna Geraghty said Tuesday the airline was focused on its turnaround plan but added: 'Never say never — we're open to anything and everything, assuming the terms would make sense for JetBlue.'

What comes next: negotiations continue amid ticking clock

Spirit Airlines has not provided a specific deadline, but the cancellation of Thursday's court hearing suggests that both sides are still working to reach an agreement. The key question remains whether the government and lenders can finalize the $500 million rescue package before the airline's cash reserves run out. If a deal is not reached, Spirit could be forced into liquidation, wiping out more than 17,000 jobs and triggering billions of dollars in claims. The outcome will also set a precedent for how the Trump administration handles distressed airlines and whether further industry-wide aid will materialize.

The bottom line

• Spirit Airlines has only days of cash left and faces liquidation without a $500 million government rescue or access to $240 million in funds.
• The proposed rescue includes warrants for 90% of Spirit's equity, sparking bipartisan backlash in Congress.
• A liquidation would eliminate 17,000 jobs and generate billions in claims.
• Budget airlines are separately seeking $2.5 billion in aid to cover jet fuel costs from the U.S.-Israeli war on Iran.
• Transportation Secretary Sean Duffy said any aid would require bipartisan congressional approval.
• JetBlue CEO Joanna Geraghty left the door open to government assistance if terms are favorable.