Spirit Airlines has filed for bankruptcy twice. Its turnaround plan assumed jet fuel at $2.24 a gallon. By mid-April 2026, jet fuel was $4.24 a gallon — roughly double — because Donald Trump started a war with Iran and the Strait of Hormuz is effectively closed. Now the Trump administration wants to bail the airline out with up to $500 million in taxpayer-backed financing.
The deal, first reported by the Wall Street Journal and confirmed by Reuters, would include warrants giving the U.S. government a potential stake of up to 90% in the carrier. The federal government might end up owning nine-tenths of a failed budget airline that nobody else wants to buy.
Even Republicans Think This Is Insane
Republican Senator Ted Cruz, who chairs the Senate Commerce Committee: “This is an absolutely terrible idea. The government doesn’t know a damn thing about running a failed budget airline.”
Republican Senator Tom Cotton: “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.”
Trump’s own Transportation Secretary, Sean Duffy, in an interview with Reuters: “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?” Then: “What would someone buy? If no one else wants to buy them, why would we buy them? We can’t make dumb investments.”
When your own Transportation Secretary is publicly calling the deal dumb, you know the only person who wants it is the guy in the Oval Office.
“Donald Trump’s war with Iran caused the sky-high fuel prices that finally did Spirit Airlines in. What do the American people get out of this taxpayer bailout? Will the failed airline executives be held accountable?” — Senator Elizabeth Warren
The Numbers Are Brutal
Bankruptcies: 2 (2025 and 2026)
Fleet size: Shrinking to ~76-80 aircraft (one-third of pre-bankruptcy)
Fuel cost projection: $2.24/gallon (turnaround plan, March 2026)
Actual fuel cost: $4.24/gallon (mid-April 2026)
Proposed bailout: Up to $500 million in government-backed financing
Government stake: Warrants for up to 90% ownership
Who wants to buy Spirit: Nobody
Spirit built its entire exit-from-bankruptcy plan on fuel costing roughly half what it actually costs right now. That’s not bad luck — that’s a direct consequence of the Iran war that doubled global energy prices. The same war that’s pushed gas above $4 a gallon for American drivers, that’s sent oil to $98 a barrel, that’s shut down the strait through which 20% of the world’s oil normally flows.
Trump told CNBC he’d prefer someone acquire Spirit, but said government involvement was “possible.” The White House blamed Biden for blocking Spirit’s 2024 merger with JetBlue. That merger was blocked on antitrust grounds — a federal judge agreed it would hurt consumers. But sure, blame Biden.
This Is What “America First” Looks Like
Here’s the sequence: Trump started a war that cratered the global energy market. Fuel prices doubled. Airlines that were already struggling got crushed. Now he wants taxpayers to bail out one of them — a company that has already been through two bankruptcies, that no private investor will touch, that his own cabinet members are calling a bad bet.
United Airlines CEO Scott Kirby said on an earnings call that he “was not sure about the outcome” of a government bailout. Translation: even the competition thinks this is a bad idea.
Bloomberg reported April 15 that Spirit was “at risk of facing liquidation” as fuel costs bite. This isn’t a company that needs a bridge loan to get through a rough quarter. This is a company that’s dying because the economics of budget air travel don’t work when fuel costs $4.24 a gallon — a price that exists because of this president’s military decisions.
And the solution is to have the federal government potentially own 90% of it. With your money. While 68% of Americans disapprove of the war that made this necessary in the first place.
Ted Cruz is right about one thing: the government doesn’t know a damn thing about running a failed budget airline. But thanks to the Iran war, the government might have to learn.
Sources
- Reuters via Investing.com: Trump administration nears deal to rescue Spirit Airlines. Up to $500 million government-backed financing. Warrants for up to 90% stake. Spirit’s fuel plan: $2.24/gallon; actual: $4.24/gallon. April 22, 2026.
- Reuters via KFGO: Senators raise concerns about bailout. Cruz: “absolutely terrible idea.” Cotton: “Not the best use of taxpayer dollars.” Warren: “Trump’s war with Iran caused the sky-high fuel prices.” Duffy: “We can’t make dumb investments.” April 22, 2026.
- ABC News (YouTube): White House close to offering bailout. Deal could be announced “as soon as today.” Cruz posted opposition. Spirit filed for bankruptcy twice. April 23, 2026.
- MarketScreener / Reuters: Confirms loan structure, 90% stake warrants, bipartisan opposition. Transportation Secretary Duffy: “What would someone buy? If no one else wants to buy them, why would we buy them?” April 22, 2026.
- Good Morning America: Reports Spirit risks “imminently shutting down” from soaring jet fuel costs. Cruz opposition. Trump told CNBC he’d like someone to acquire Spirit. April 23, 2026.
- Reuters via KFGO (2nd): Trump told CNBC he prefers acquisition but said government involvement “was possible.” White House blamed Biden for blocking JetBlue merger. Commerce and Transportation departments declined to comment. April 22, 2026.