Sen. Elizabeth Warren (D-Mass.), on Wednesday, attacked the Trump administration’s possible $500 million rescue package for Spirit Airlines Inc (OTC:FLYYQ), arguing that the carrier’s latest collapse was tied to soaring fuel costs from the conflict with Iran and questioning whether taxpayers would see any benefit or executives any consequences.
Warren Ties Spirit Pain To Iran
On X, Warren wrote, “Donald Trump’s war with Iran caused the sky-high fuel prices that finally did Spirit Airlines in. What do the American people get out of this taxpayer bailout? Will the failed airline executives be held accountable?”
Warren linked to a Washington Post report saying the administration was close to lending Spirit as much as $500 million in exchange for warrants that could give the government a significant stake.
Reuters separately reported the aid would likely begin as government-backed financing during bankruptcy and later convert into longer-term debt, with warrants that could leave Washington owning as much as 90% of the airline.
Trump Team Weighs Unusual Airline Rescue
President Donald Trump met Tuesday night with Commerce Secretary Howard Lutnick and Transportation Secretary Sean Duffy to discuss options for keeping Spirit operating, according to the Post.
Trump later told CNBC, “Maybe the federal government should help that one out,” while White House spokesman Kush Desai said Wednesday that the administration was monitoring Spirit’s situation and the broader health of the aviation sector, which millions of Americans rely on for travel and jobs.
Spirit is in its second bankruptcy in less than two years, making a potential rescue unusual even in an industry that previously received broad federal support after the Sept. 11 attacks and during the pandemic.
Critics From Both Parties Push Back
Former Rep. Marjorie Taylor Greene (R-Ga.), blasted the plan on X, citing Spirit’s poor customer ratings, non-reclining seats and baggage fees. She also contrasted the proposed aid with the lack of direct relief for Americans facing higher living costs and fuel prices, hailing the move as an “America LAST” move.
Sen. Ted Cruz (R-Texas), called the proposal “an absolutely TERRIBLE idea,” while Sen. Mike Lee (R-Utah), said, “Competition among airlines suffers when government bails them out.” Sen. Tom Cotton (R-Ark.) also raised concerns.
Price Action: Spirit shares rose 150% at $1.50 on Wednesday, adding another 2% to reach $1.53 in after-hours trading. The stock is trading at a new 52-week high, according to Benzinga Pro.
Benzinga Edge’s Stock Ranking data currently indicates that Spirit Aviation stock is trending downward in the short-, medium-, and long-term.
Photo Courtesy: Sheila Fitzgerald on Shutterstock.com
Recent Comments