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Spirit Airlines’ $500 million rescue funding talks face setback

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Published  April 29, 2026 1:50pm EDT
Business
FOX Local
article

FILE-A Spirit Airlines plane taxis at Hollywood Burbank Airport on April 16, 2026 in Burbank, California. (Photo by Justin Sullivan/Getty Images)

The Brief 

    • Spirit Airlines and lenders are at an impasse over the terms of a proposed $500 million rescue deal.
    • The budget carrier is enduring obstacles with its business and filed for bankruptcy last year. 
    • Recently, President Donald Trump hinted that the federal government might offer a bailout to the airline. 

Spirit Airlines’ bid to receive a potential $500 million rescue from the federal government apparently is in a stalemate.

Reuters reported, citing Bloomberg News, that a collection of lenders, including Citadel, a hedge fund, is contesting the proposed terms of the deal that may diminish the value of their claims, while lowering reclamations. The lenders introduced a counterproposal to Spirit Airlines but has yet to receive a response.

RELATED: Trump suggests bailout or merger as Spirit Airlines faces mounting costs

These latest developments with the Spirit Airlines proposed deal come after the budget carrier reportedly won the support of two of its three creditor groupings to obtain a financial bailout.

According to Reuters, if the creditor groups working with Spirit agree to a bailout deal, a federal bankruptcy hearing may be scheduled in New York on Thursday. 

Last week, President Donald Trump intimated on April 21 in a CNBC interview that the federal government may consider keeping Spirit Airlines afloat, while he also requested for a buyer to step in and help the airliner.  

Spirit Airlines financial obstacles

Dig deeper:

Spirit Airlines filed for bankruptcy in August 2025 following two failed mergers in less than two years. The most recent merger attempt was with Frontier Airlines and then with JetBlue.

The airliner also filed for bankruptcy in 2024 and announced that same year it was planning to sell off multiple aircraft and lay off workers as it attempted to revive operations and raise revenue. 

RELATED: Spirit’s bankruptcy uncertain as jet fuel prices soar 

The backstory:

The organization started out as a long-haul trucking company in 1964 before shifting to aviation in 1983. The company offered travel packages to popular destinations under the name Charter One Airlines and rebranded to Spirit in 1992.

Spirit Airlines became popular with budget-conscious customers willing to forgo features like checked bags and seat assignment.

The Source: Information for this story was provided by Reuters, Bloomberg, and previous FOX Local reporting. This story was reported from Washington, D.C.


 

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