The White House is considering invoking the Defense Production Act to help keep Spirit Airlines operating, according to sources familiar with internal discussions. President Trump has signaled openness to federal intervention to preserve jobs, and officials are exploring how emergency authorities might be used in the carrier’s bankruptcy proceedings.
The plan under review would rely on the Defense Production Act’s financing power rather than its usual supply-prioritization provisions. Administration officials have discussed a government loan of roughly $500 million at favorable interest, with the federal government becoming the senior creditor in Spirit’s restructuring. That loan would be secured by Spirit assets thought to exceed the government’s exposure and would include a warrant giving taxpayers the potential to control up to 90 percent of the airline after bankruptcy, according to people briefed on the proposal.
Pentagon involvement is part of the concept. Officials envision using Spirit’s excess capacity for military transport roles, such as moving troops or cargo, while preserving the airline’s operations until a buyer can be found. The expectation is that Spirit would eventually be sold to another carrier after the government’s temporary support.
Any such move would require creditor approval. The Office of Management and Budget has mapped scenarios for a federal rescue and has coordinated with both the Commerce Department and the Defense Department on potential structures. Individual creditors have been receiving a term sheet outlining the government’s proposal, and outreach is ongoing.
Pressure on Spirit intensified after the carrier missed an interest payment that was revealed at a recent bankruptcy hearing. That missed payment triggered a countdown under its debtor-in-possession financing agreement, giving creditors a seven-day window to move to default. Company lawyers warned the airline could run out of operating days if access to restricted cash is not restored.
Spirit reported roughly $250 million in cash on hand, but those funds are subject to liens held by creditors and are not freely available without agreement. Creditors have expressed doubt about Spirit’s standalone viability amid rising jet fuel costs linked to the war in Iran and other market pressures.
The airline has already filed for bankruptcy twice in the last two years, after the Department of Justice blocked a proposed merger with JetBlue during the prior administration. Spirit’s fleet is largely leased: at the end of 2025 the carrier owned about 48 aircraft and leased approximately 83 more. The airline directly employs around 7,500 people.
There is not unanimity inside the administration. Commerce Secretary Howard Lutnick and White House advisors have pushed for intervention to avoid liquidation and job losses, while Transportation Secretary Sean Duffy has warned that a government rescue could be politically sensitive and might only delay an inevitable financial failure.
Separately, administration officials reviewed a liquidation proposal that would have sold Spirit’s valuable takeoff and landing slots at Newark, a United Airlines hub. White House officials rejected that idea, saying federally held slots should be preserved to enhance the carrier’s value for a future buyer.
A White House spokesperson said the administration is assessing options to keep Spirit operating for passengers and employees but cautioned that details about any specific deal remain speculative until formally announced. The discussions continue as creditors and the airline negotiate the next steps in the bankruptcy process.