AUSTIN, TEXAS – Spirit Airlines continues to struggle with significant financial problems. (Photo by Brandon Bell/Getty Images)
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The Trump administration is poised to bail out bankrupt Spirit Airlines. The idea must be grounded. The President says he’s open to the idea of funneling hundreds of millions of taxpayer dollars into trying to save Spirit Airlines, a low-fare airline struggling with its second bankruptcy.
Spirit had hoped to appear this summer, but the high cost of fuel has shot that idea down. The carrier has asked management for an injection of cash to keep them in the air. Otherwise, the company could soon find itself in liquidation. The figure being discussed is $500 million, and the deal could be structured in a way that could end up giving Uncle Sam 90% of the equity.
Not surprisingly, Commerce Secretary Howard Lutnick, who has the mindset of a communist commissar from the defunct Soviet Union, loves the idea. Transport Minister Sean Duffy is reported to have expressed rather strong reservations.
Duffy’s skepticism is more than justified. The move would set a terrible precedent, particularly after previous White House stakes in Intel, US Steel and other companies. Democrats would happily embrace this kind of state socialism to take effective control of large parts of the economy, starting with health care, when they regain power.
A yes to Spirit could well be followed by similar requests from a few other hard-pressed economy-oriented airlines.
Unlike the pandemic, which affected the entire industry, Iran-related fuel shocks do not threaten all carriers. Most carriers are strong enough to handle this turbulence.
Thus, Washington taxpayer money would give Spirit an unfair advantage and encourage Washington politicians to further subsidize a defunct carrier at the expense of healthy ones. Republicans especially should not create an uneven playing field where politics, not consumers, dominate. Everyone ends up losing here.
More Washington interference would compound the policy felony committed by the Biden crowd in 2022 when they blocked a merger between a then-struggling but still viable Spirit and JetBlue. It was a perversion of antitrust policy, which for decades had held that corporate marriages were kosher if they didn’t reduce competition and hit consumers with higher prices. In that case, the proposed combination could have kept the ultra-low-fare Spirit and allowed it to modernize an aging fleet.
