Trump Administration Weighs Lifeline for Spirit Airlines via Defense Production Act

The Trump administration is considering employing the Defense Production Act to aid Spirit Airlines amid its financial struggles. Discussions involve a $500 million financing package with conditions detailed in a government offer. Spirit faces an urgent need for funds before a court hearing next week regarding its bankruptcy exit.

The Trump administration is exploring measures to assist Spirit Airlines by using the Defense Production Act, sources disclosed. The potential aid, reported first by CBS News, could involve Title 3 of the Act, enabling government investment in industrial capacity for national defense.

White House spokesman Kush Desai confirmed ongoing discussions aimed at keeping Spirit operational. The Defense Production Act provides emergency authority for the government to prioritize federal contracts and bolster output of crucial goods, potentially offering loans to private firms critical for national defense.

Amid financial pressures, Spirit Airlines is running out of time, with a crucial court hearing approaching. The government has put forward a $500 million financing package, currently under review by Spirit’s creditors, which could see the government acquiring warrants amounting to 90% of Spirit's equity.