Spirit Aviation Holdings Inc. has offered the U.S. government an ownership stake in the low-cost carrier as it seeks a capital infusion to avert possible liquidation, people familiar with the discussions said. Those individuals requested anonymity because the talks are confidential.
The company is pursuing federal support at a time when jet fuel costs are rising, the people said, adding that the proposal is intended to provide the carrier with the liquidity needed to continue operations. The outreach to the government follows a White House arrangement last year in which the administration became one of the largest shareholders in Intel Corp. to back the chipmaker's domestic initiatives.
Officials familiar with the matter indicated any government-assisted recapitalization could attract resistance from other airlines. Competing carriers are similarly grappling with a jump in jet fuel prices tied to the conflict in the Middle East, and some industry participants are expected to oppose preferential treatment for a single carrier, the people said.
Separately, Transportation Secretary Sean Duffy plans to meet with chief executives of low-cost carriers this week to review the sector's challenges, the people added. The meetings suggest federal officials are engaging with industry leaders as airlines contend with cost pressures.
The specifics of the proposed equity arrangement, including the size of any stake or terms of a potential investment, were not disclosed by the people familiar with the conversations. Those individuals emphasized that discussions remain confidential and did not provide a timeline for when decisions might be reached.
For now, the proposal represents a high-profile request for government assistance from a discount airline confronting a difficult fuel-cost environment. Observers should expect debate among carriers and policymakers about the appropriateness of government intervention and how any such support would be structured.
Summary: Spirit Aviation has approached the U.S. government about taking an equity stake as part of a possible cash infusion to avoid liquidation amid rising jet fuel prices. The outreach follows a prior White House investment in Intel and is likely to face opposition from competitors. Transportation Secretary Sean Duffy will meet low-cost airline bosses this week to discuss the sector's pressures.