Spirit Airlines is facing a possible shutdown within days as negotiations over a $500 million U.S. government rescue loan have hit a major roadblock, according to sources familiar with the matter.
The budget airline, already struggling after two bankruptcies since 2024, is running dangerously low on cash.
Reports say the company has only enough funds to continue operating for a short time, raising urgent concerns about its future.
At the center of the crisis is a proposed $500 million rescue package backed by the Trump administration, Reuters reported.
The deal would give the government a large stake—up to 90% ownership—in exchange for emergency funding. However, the plan cannot move forward without approval from key creditors, and several major lenders are refusing to agree.
Spirit Airlines’ efforts to secure a $500 million financial lifeline hit a significant roadblock as lenders balk at the terms of the proposed rescue package. https://t.co/YCBQ39hPCF pic.twitter.com/2eALQgmFv6
— FOX 2 Detroit (@FOX2News) April 30, 2026
Spirit Airlines Risks Default After Missed Payment
Among those opposing the proposal are firms linked to Ken Griffin, whose company submitted a counteroffer that was rejected.
Other investment groups, including Ares Management Corp. and Cyrus Capital, have also pushed back, worried the deal would reduce the value of what they are owed.
A scheduled bankruptcy hearing was postponed as talks continue, but time is running out.
The airline recently skipped an interest payment, putting it at risk of default. According to CBS News, while Spirit still has about $250 million in cash, creditors control that money, limiting the airline's ability to use it freely.
Donald Trump has signaled support for a potential government takeover, saying it could save jobs and make use of the airline's remaining assets. "For the right price," he said, the government could step in to stabilize the company.
Officials are also considering using emergency powers under the Defense Production Act. If approved, Spirit's planes could be used for military transport, including moving troops and cargo. The airline could later be sold once it exits bankruptcy.
Despite some earlier signs of support from creditor groups, the latest reports suggest negotiations have stalled again.
A White House official said the administration is still reviewing options to protect both passengers and airline workers.
Originally published on vcpost.com
