Spirit Asks for Government Bailout

Spirit Airlines is reportedly asking for a federal government bailout after the sudden rise in fuel prices threw a wrench into its plans to emerge from bankruptcy. The Air Current was first to report the request but CBS says it has confirmed it with its own sources. Spirit was targeting emerging from bankruptcy this coming summer after shedding billions of dollars in debt and selling off airplanes. Creditors had agreed to the deal but the outlook has changed significantly with the surge in crude oil prices brought on by the war in Iran.

CBS is also reporting that some creditors were having second thoughts about the plan, and bankruptcy officials were also questioning whether Spirit had looked seriously enough at alternatives to giving it another go. That’s raised the possibility of a liquidation rather than a reboot and that’s what may have prompted the bailout request. Neither the government nor Spirit is commenting on the reports. Transportation Secretary Sean Duffy is set to meet with the executives of all budget carriers next week, something CBS says he does regularly. A change in consumer tastes to a more comfortable and convenient level of service hit the revenue of all budget carriers in the wake of the COVID-19 pandemic.