President Donald Trump is weighing a taxpayer-backed takeover of Spirit Airlines as the low-cost carrier struggles with rising fuel prices and mounting debt. The president told reporters in the Oval Office on Thursday, "I think we just buy it. We'd be getting it virtually debt-free."
Trump highlighted the airline's assets, saying, "They have some good aircraft, good assets, and when the price of oil goes down, we'll sell it for a profit. I'd love to be able to save those jobs." Spirit Airlines, based in Florida, employs about 14,000 people and filed for Chapter 11 bankruptcy twice in the past two years, most recently in August. Its debt and lease obligations stood at around $7 billion in March.
The proposed deal, first reported by The Wall Street Journal, would involve the federal government loaning Spirit up to $500 million in exchange for warrants granting a major stake in the airline. The Commerce and Transportation departments have participated in discussions, which have not been finalised. Trump met with Cabinet secretaries on Tuesday evening to work on the agreement.
Spirit CEO Dave Davis expressed gratitude for Trump's interest, stating, "We are grateful for President Trump's support and look forward to continuing to work with him and his Administration on a solution that protects thousands of jobs, preserves and enhances competition and helps ensure Americans continue to have access to affordable fares."
A government rescue would mark another Trump administration foray into private-sector investments, following a 10 percent stake in Intel last year and investments in rare-earth metals firms by the Commerce and Defense departments.
