By David Shepardson
WASHINGTON, April 22 (Reuters) – A number of U.S. lawmakers expressed concerns about a potential federal government rescue of bankrupt Spirit Airlines, with the Republican chair of the Senate Commerce Committee calling it a “terrible idea.”
“This is an absolutely terrible idea,” Senator Ted Cruz said on social media. He added that “the government doesn’t know a damn thing about running a failed budget airline.”
Reuters reported that President Donald Trump’s administration was nearing a deal to rescue low-cost carrier Spirit Airlines that could include up to $500 million in government-backed financing to help it exit bankruptcy, its second restructuring since 2025.
The package would likely be a loan to keep Spirit running during bankruptcy, which would later become a longer-term loan when the airline exits bankruptcy, with warrants giving the U.S. government a potential stake of up to 90%, the sources said.
The White House and Spirit did not immediately comment.
Republican Senator Tom Cotton said: “If Spirit’s creditors or other potential investors don’t think they can run it profitably coming out of its second bankruptcy in under two years, I doubt the U.S. Government can either. Not the best use of taxpayer dollars.”
Democratic Senator Elizabeth Warren said, “Donald Trump’s war with Iran caused the sky-high fuel prices that finally did Spirit Airlines in.” She added: “What do the American people get out of this taxpayer bailout? Will the failed airline executives be held accountable?”
Transportation Secretary Sean Duffy, in an interview Tuesday with Reuters, expressed serious concerns about a potential bailout. “What we don’t want to do is put good money after bad, and there’s been a lot of money thrown at Spirit, and they haven’t found their way into profitability. And so would we just forestall the inevitable and then own that?” Duffy said. “We can’t make dumb investments.”
Duffy said it appears no one wants to buy Spirit. “What would someone buy?” Duffy asked. “If no one else wants to buy them, why would we buy them?”
(Reporting by David Shepardson; Editing by David Gregorio)
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