Two of Spirit Airlines' three major creditor groups have given the thumbs up to the Trump administration's $500 million bailout plan for the beleaguered budget carrier, sources close to negotiations told the Financial Times.
The White House offer would see the federal government take a 90 percent ownership stake in Spirit, saving it from liquidation and preserving some 17,000 jobs for the time being.
The ultra-low-cost airline has been struggling financially for years, filing for bankruptcy multiple times and emerging from several failed merger bids with JetBlue and Frontier Airlines. Recent spikes in oil costs in the wake of the Iran war have all but threatened to crush the carrier.
An outside lawyer for Spirit said the airline needed new financing or access to $240 million of its funds to remain operable beyond this week.
Trump's bailout is controversial in that previous relief packages, such as the 2020 COVID bailouts, in which U.S. airlines received more than $63 billion in federal payroll support, were focused on the entire industry rather than a single airline.
In addition to tens of thousands of lost jobs, a Spirit liquidation could threaten to further inflate airfares as the industry loses another competitor.
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