TOPLINE The Trump Administration is reportedly contemplating a $500 million bailout of Spirit Airlines and taking up to a 90% ownership stake in the company. Here’s why conservatives must oppose a taxpayer funded bailout of Spirit Airlines:
Background
The Biden Administration killed Spirit Airlines, which hasn’t recorded a profit since 2019.
- In 2022, JetBlue agreed to buy Spirit for $3.8 billion, a lifeline for shareholders.
- BUT - the Biden Administration blocked the deal. In 2024, Spirit filed for bankruptcy.
- BEWARE: The folly of heavy-handed antitrust policies, influenced by Lina Khan and her acolytes. The Biden Administration let a company fail instead of merge, as it also did with Roomba, which was bought out of bankruptcy by the Chinese.
Conservatives Oppose Government Ownership of Private Companies.
- The Trump Administration continues taking unprecedented stakes in private companies.
- A 90% stake in Spirit would be the largest position yet taken by this administration.
- Today, the federal government owns: 10% of Intel, 15% of MP Materials, a golden share of U.S. Steel, and much more.
- DIG DEEPER: Washington’s Growing Portfolio
Americans Aren't Running Out of Airlines
- Spirit accounts for just 3.4% of all domestic U.S. flights over the last 12 months.
- Spirit’s liquidation would allow its routes, gates, and planes to be purchased and operated by better managed airlines.
- Americans can choose from 83 domestic airlines and over 100 foreign airlines.
Washington Shouldn’t Pick Winners & Losers
- Spirit’s business model has yielded consistent losses since 2019, with most airlines shedding market cap and airfare prices down 9% over the last 13 years.
- Why should taxpayers bail out one company that has been uniquely unprepared?
- Bailing out Spirit creates the expectation that American taxpayers, at the whim of politicians, will bail out other struggling airlines, companies, and their shareholders.
FLASHBACK: Meet TARP, the Troubled Asset Relief Program
- Amidst the 2008 Great Financial Crisis, the federal government spent more than $400 billion on troubled financial firms in order to prevent the financial system from collapsing.
- TARP favored some Wall Street firms over others, distorted markets, and signaled that “too big to fail” firms could expect government bailouts.
Other Reasons to Oppose
- With a $39 trillion national debt, the federal government shouldn’t be telling anyone how to run a business or avoid bankruptcy.
- Taxpayer bailouts can become labor union bailouts by leaving existing union contracts in place. These labor contracts are often leading drivers behind company losses.
Bottom Line
American families shouldn’t be forced to bail out Spirit and the shareholders or pay the bill to see if the federal government can run an airline. Conservatives must oppose this bailout.
