Spirit Aviation Holdings Considers Government Stake to Avoid Liquidation

Spirit Aviation Holdings Inc. is contemplating the possibility of selling a share in the low-cost airline to the U.S. government as a strategy to prevent potential liquidation, according to sources familiar with the situation.

With rising jet fuel prices, airlines are looking for financial assistance from the federal government. These sources, who wished to remain unnamed due to the confidential nature of the discussions, noted that this proposal follows a precedent set last year, when the White House facilitated a deal to become a major stakeholder in Intel, intended to enhance the chipmaker’s domestic initiatives.

Air Current was the first to report Spirit’s search for governmental support.

However, any potential aid package may face pushback from other airlines, which are also grappling with escalating fuel costs amid ongoing conflicts in the Middle East. Transportation Secretary Sean Duffy is expected to convene with executives from low-cost airlines this week to address these ongoing issues, according to officials.

A spokesperson mentioned that the Department of Transportation is keeping an eye on Spirit’s situation. Meanwhile, the White House has not provided any comments on the matter.

Spirit representatives have not responded to requests for their input.

Recently, the Value Airlines Association, representing budget carriers like Spirit and Frontier Group Holdings, reached out to Congressional leaders seeking temporary relief from specific fees and taxes. They requested a pause on the 7.5% federal excise tax on airline tickets, as indicated in a letter obtained by Bloomberg News.

The letter, dated April 14, emphasized that without intervention, soaring fuel costs would lead to increased overall travel expenses for consumers. A similar kind of relief was granted to airlines during the Covid-19 pandemic.

Spirit was on track to emerge from bankruptcy by this summer after coming to terms with creditors on a plan to lower its debts and fleet costs. The airline had sought Chapter 11 bankruptcy protection in August 2025, marking its second such filing in less than a year.

In the past, Spirit attempted to merge with other airlines, but these efforts were unsuccessful. Prior to its initial bankruptcy filing, JetBlue Airways had agreed to acquire Spirit, but a federal judge blocked that move in 2024, citing antitrust concerns. Recently, talks between Frontier and Spirit to merge have been rekindled for 2025.