A lawyer for Spirit Airlines confirmed Thursday the bankrupt carrier is in advanced discussions with the federal government on the terms of a significant financing package to help the airline restructure.
Marshall Huebner, an outside lawyer for Spirit, said at a bankruptcy court hearing in New York that the details of the proposed financing package offered by the Trump administration have been shared with its primary creditor groups.
“The financing offered to us by the federal government would do far more than make this reorganization possible. It would create an appropriately capitalized, fierce competitor in the airline space,” Huebner said, emphasizing talks are continuing. “I think it’s far too early for anybody to know where this is going.”
Reuters and other outlets reported Wednesday the Trump administration was nearing a deal to rescue low-cost carrier Spirit Airlines offering about $500 million in government-backed financing to help it exit bankruptcy.
The package would likely be a loan to keep Spirit running during bankruptcy, which would later become a longer-term loan when the airline exits bankruptcy, with warrants giving the US government a potential stake of up to 90%, the sources said.
Huebner declined to disclose the terms of the deal under discussions, which underscore one of the unintended consequences of the US-Israeli on Iran: a surge in jet fuel prices that has roughly doubled costs, squeezing margins and pushing weaker airlines closer to the brink.
US President Donald Trump told CNBC on Tuesday that he would prefer to see Spirit acquired, but said government involvement was possible, signaling a willingness to intervene.