WASHINGTON—With the Trump administration moving forward with talks about bailing out Spirit Airlines, one of the nation's no frills budget airlines, the federal government could very well use the bankrupt airline to transport military personnel and cargo.
The bailout measure being considered would include a $500 million loan that would also include warrants that may give the government ownership of 90% of the airline.
The airline had been on track to exit its second bankruptcy this summer, until the cost of jet fuel surged following the outbreak of the U.S.–Iran conflict in late February. This would add an estimated $360 million to Spirit’s expenses if jet fuel stays around $4.60 per gallon, according to JPMorgan.
President Donald Trump has already expressed his support for helping the airline, but has not specifically indicated or state that he would bail out the airline.
Florida Rep. Mike Haridopolos (R) is supportive of President Trump and his leadership, but being a fiscal conservative lawmaker, the freshman member of the U.S. House of Representatives contends that he would "rather see the free market play" dictate what will happen to Spirt, and not see a bailout by the federal government.
"The more competitors we have in that space is good...We have a lot of competitors, we always want to have other companies look at taking over, because those are very valuable flights in some cases, you know at Reagan National, having those slots is a big deal," said Rep. Haridopolos in an interview with The Floridian. "I'd rather see the free market play this thing out. One of their competitors might purchase them because its advantageous.The a last resort on any of these things, would be the government to get involved and purchasing, when there could be a viable buyer out there.
The is a developing story...
