Why The Trump Administration Shouldn’t Bail Out Spirit Airlines

The Trump Administration is ready to bailout bankrupt Spirit Airlines. The idea should be grounded. The President says he’s open to the idea of pouring in hundreds of millions of taxpayer dollars to try to rescue Spirit Airlines, a low-fare carrier struggling with its second bankruptcy.

Spirit was hoping to emerge this summer, but high fuel costs have crashed that idea. The carrier has asked the administration for an infusion of cash to keep it in the air; otherwise, the company could soon find itself in liquidation. The number being discussed is $500 million, and the deal may be structured in a way that could end up giving Uncle Sam 90% of the equity.

It’s no surprise that Secretary of Commerce Howard Lutnick, who has the mindset of a communist commissar from the defunct Soviet Union, loves the idea. Secretary of Transportation Sean Duffy has reportedly expressed rather strong reservations.

Duffy’s skepticism is more than well warranted. The move would set a dreadful precedent, particularly following previous stakes the White House has taken in Intel, U.S. Steel and other companies. Democrats would gleefully embrace this kind of state socialism for seizing effective control over broad swaths of the economy, starting with healthcare, when they get back power.

A yes to Spirit could well be followed with similar requests from a couple of other hard-pressed, economy-oriented airlines.

Unlike the pandemic, which slammed the whole industry, the Iran-related fuel shocks aren’t threatening all carriers. Most carriers are strong enough to weather this turbulence.

Thus, taxpayer money from Washington would give Spirit an unfair advantage and would incentivize the Washington politicians to further subsidize a floundering carrier at the expense of healthy ones. Republicans especially shouldn’t be creating uneven playing fields where politics reigns, not consumers. Everyone ends up losing here.

More Washington intervention would compound the policy felony the Biden crowd committed back in 2022, when they blocked a merger between a then-struggling but still-viable Spirit and JetBlue. It was a perversion of antitrust policy, which for decades had held that corporate marriages were kosher if they didn’t lessen competition and hurt consumers with higher prices. In this case, the proposed combination could have preserved the ultra-low-fare Spirit and enabled it to modernize an aging fleet.