Spirit Airlines prepares to shut down without a government bailout
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Spirit Airlines, the Florida-based carrier that helped popularize low-cost airfare in the U.S., could shut down operations if a deal isn’t reached soon with the Trump administration.Several media outlets including Bloomberg and the Wall Street Journal reported Friday that Spirit is preparing to shutter, citing people familiar with the situation.
The airline has been in talks with the U.S.government to secure a $500-million cash infusion in exchange for a majority stake in the company.
Negotiations hit a wall in recent days amid disagreements within the Trump administration and opposition from Spirit bondholders, the Wall Street Journal reported.Business The closure of the Strait of Hormuz has squeezed global oil supply, putting pressure on California’s jet fuel reserves.Trump told reporters at the White House on Friday that he made Spirit Aviation Holdings a “final proposal” and more news was likely to follow.
“If we can do it, we’d do it, but only if it’s a good deal,” Trump said.A spokesperson for Spirit declined to comment on ongoing discussions and told The Times the airline is operating as usual.
An association of budget airlines asked the U.S.government for $2.5 billion in relief as the conflict in Iran drives up the price of jet fuel and puts pressure on cash-strapped carriers.
Business United Airlines Chief Executive Scott Kirby said the hike in jet fuel prices triggered by the conflict in Iran could put some airlines out of business.The cost of jet fuel has doubled since the start of the war, and airlines across the industry are struggling to adapt, with many cutting routes and adding baggage surcharges.Budget airlines have especially thin margins and cannot afford to spend more on fuel, experts said.
United Airlines Chief Executive Scott Kirby said that some airlines might not survive if the war in Iran continued.Kirby said his company faces an $1...