The White House is reportedly exploring a plan to rescue Spirit Airlines that could include invoking the Defense Production Act and lending the carrier $500 million. The government loan would be secured by Spirit assets and could give taxpayers a warrant to acquire 90% of the airline after bankruptcy. Sources say the Pentagon could use Spirit’s excess capacity to transport troops and military cargo, with a likely later sale to a private buyer. President Trump acknowledged the administration was “looking at helping” the airline and cited its 18,000 employees.
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The White House is reportedly considering a government intervention to rescue Spirit Airlines that could include using the carrier’s aircraft to transport U.S. troops and military equipment, according to a CBS News report citing U.S. officials.
What’s Being Proposed
Officials say one option under review would invoke the Defense Production Act, a law enacted in 1950 that gives the president broad authority to direct domestic industry during declared national emergencies. Under the plan described to CBS, the federal government would lend Spirit $500 million at a reasonable interest rate and become the top creditor in the airline’s bankruptcy hierarchy.
The loan would be secured by Spirit’s assets, which sources said would exceed the government’s exposure, and taxpayers would receive a warrant entitling the government to acquire up to 90% of the company when it emerges from bankruptcy.
Military Use And Future Sale
Sources told CBS that the Pentagon would tap Spirit’s spare capacity to move troops, military cargo and support other missions while the government holds a controlling stake. After stabilization, the report said the airline would likely be sold to a private carrier.
“We’re looking at helping them. We have 18,000 people that live in this country that are great people and great employees,” President Donald Trump told reporters in the Oval Office, adding that the administration might “bail them out” or buy the carrier outright.
Spirit has filed for bankruptcy twice in the last two years and employs about 18,000 people. Administration officials declined to comment to CBS News.
Context
The Defense Production Act was passed at the start of the Korean War and has been used in various forms to prioritize industry production and allocate materials during emergencies. Using it to temporarily repurpose a commercial carrier’s capacity for military transport would be an uncommon but legally plausible application, experts told reporters.
While details remain fluid, the proposal as reported would combine a rescue loan with a temporary government stake to preserve jobs and provide the Pentagon with additional lift, followed by a sale to a private buyer once the airline is stabilized.
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