Bankrupt Spirit Airlines appears to be flying on fumes, with a late Friday report indicating the budget carrier has become so desperate for cash that it has approached the Trump administration for an emergency bailout, even as creditors mull pulling the plug at any moment.
Aviation news website The Air Current reports that Spirit has asked the Trump administration for "hundreds of millions of dollars in emergency funding" to offset the surge in jet fuel costs that have pushed the carrier even closer to "possible liquidation." The report was based on multiple accounts from individuals familiar with the situation.
In a separate report, CBS News also confirmed through its sources that "Spirit is looking for a lifeline" and that creditors are questioning whether the airline can meet future multimillion-dollar debt payments due to surging jet fuel costs.
The airline had been aiming to exit its second bankruptcy since 2024 by this summer, but the U.S.-Iran conflict spiked jet fuel prices so quickly that it appears the airline had limited hedging in place to offset the surge.
Side note: The best-hedged airline amid the jet fuel turmoil has been Delta Air Lines, the only U.S. carrier to operate a refinery.
Spirit executives and other budget carriers are expected to meet with Transportation Secretary Sean Duffy next week.
"Spirit is flying on financial fumes," airline industry analyst Henry Harteveldt told CBS News on Wednesday.
CNBC and Bloomberg warned earlier this week that Spirit's "risk of liquidation" was elevated.
Harteveldt warned that Spirit's operations could cease if enough creditors decide to pull the plug.
By late week, jet fuel prices had fallen, and airline stocks soared on news that Iran had reopened the Strait of Hormuz chokepoint.
Meanwhile, UBS analysts called for a possible bottom in airline stocks (read the report) in mid-March.
For years, Spirit was a profit machine, but the pandemic, combined with the failed $3.8 billion merger with JetBlue due to a Biden-era federal court ruling, left the budget carrier in financial straits