I feel like I’m living in an alternate universe, because none of this makes sense, as it looks increasingly likely that the government may just buy Spirit Airlines…
Spirit Airlines is days from running out of cash, liquidating
We’ve known that Spirit Airlines is on the verge of liquidation, as the carrier is in Chapter 11 bankruptcy for the second time in a couple of years. While the massive increase in the cost of jet fuel has no doubt made things tougher, the reality is that Spirit didn’t have a viable business model even before that, and hasn’t turned a profit in seven years.
In a bankruptcy court hearing today (Thursday, April 23, 2026), a lawyer for the ultra low cost carrier indicated that the company’s current cash will run out in the coming days, if the airline doesn’t get more funding. As the lawyer explained:
“The cash actually available to Spirit to fund ongoing operations is not going to last for very much longer. So either new financing, either or both of new financing or access to almost $240 million of restricted cash, is absolutely essential. Round about, no later than the end of next week.”
This is more or less what we were expecting and what we had heard. Quite honestly, with everyone knowing that Spirit is on the verge of liquidation, I have to imagine this makes the cashflow situation even worse, since no one in their right mind would be booking a ticket on Spirit at the moment, given all the uncertainty.
Trump seems increasingly onboard with buying Spirit Airlines
Several days ago, we learned how Spirit Airlines had floated the idea of a government bailout in exchange for equity, which is a completely absurd idea… except for the fact that President Trump seems fully onboard with it? Yesterday we learned how Trump is seriously considering a bailout of up to $500 million for the airline, which could get the government up to a 90% stake in the carrier.
Trump doubled down on that plan today, saying:
“I think we just buy it. We’d be getting it virtually debt-free. They have some good aircraft, good assets — and when the price of oil goes down, we’ll sell it for a profit. I’d love to be able to save those jobs… I like having a lot of airlines so it’s competitive.”
Trump talking out of his you-know-what is nothing new, but this is misguided on every level:
- Spirit has some “good aircraft” — a bunch of used A320/A321s are “good aircraft” that are somehow worth saving? And these are mostly leased, as at this point Spirit owns very few aircraft
- Spirit has some “good assets” — like what?
- Trump wants to sell Spirit for a profit, but Spirit doesn’t have anything that anyone else wants, or else they would’ve already bought the airline
- I’m all for saving jobs, but the issue is that there’s no viable business model here
I just can’t wrap my head around the logic of any of this, and this is going to be such a mess. I hate to see people lose their jobs, of course, but there’s only so much money you can pour into an airline before it’s time to give up.
Again, it’s one thing if Spirit’s issues were simply related to the current jet fuel crisis. However, Spirit hasn’t been profitable in seven years, has the industry’s worst margins, and even before the current situation, there was almost no upside.
It amazes me the mental gymnastics some people are using to justify this as anything other than absurd. “Oh, but Amtrak is also government subsidized.” Right, it’s the only national rail service. That’s a little different than the airline industry, where there’s quite a bit of competition.
Can we expect that other money losing airlines will also be government owned? Frontier, JetBlue, etc.? Or why is Spirit special? Just because it’s based in Florida, not far from Mar-a-Lago?
Before anyone accuses me of this being politically motivated and anti-Trump, let me be very clear — I think it was dumb of the Biden administration to block JetBlue’s takeover of Spirit. That’s something I consistently said, and was very vocal about. Now, in retrospect that was probably a good thing for JetBlue, but it doesn’t change the current reality of the situation that Spirit is in, and how the market has evolved.
Bottom line
One of Spirit Airlines’ lawyers reports that the company is just days from running out of cash and potentially liquidating, which isn’t much of a surprise. At the same time, Trump is doubling down on the concept of having the government bail out the airline, which could see the government take control of 90% of the airline.
Trump claims that Spirit has “good aircraft” and “good assets,” and he’d “love to be able to save those jobs.” While I agree it’s a shame if jobs are lost, the reality is that Spirit will likely just continue to lose money, so this is an absolute money pit.
What do you make of this whole Spirit situation?