Trump says government gave 'final' bailout proposal for Spirit Airlines as liquidation looms

President Donald Trump said Friday that his administration gave a "final" bailout proposal for Spirit Airlines as the budget carrier could be forced to liquidate without a lifeline.

Talks with bondholders for a government bailout this week have not yielded a deal as of Friday. The Trump administration last month had offered a $500 million loan that could have given the government up to a 90% stake in the Florida airline, according to people familiar with the matter who requested anonymity to speak about the discussions.

"If we could do it, we'd do it, but only if it's a good deal this weekend, because they haven't gotten a deal looking at it," Trump said. "I said I'd like to save the jobs but we'll have an announcement, sometime today we gave them. We gave them a final proposal."

Spirit declined to comment on liquidation plans. The airline's lawyer, Marshall Huebner, told a bankruptcy court in New York on April 23 that Spirit's cash "is not going to last for very much longer."

The carrier is in its second bankruptcy in less than a year and now has the added challenge of a spike in jet fuel prices amid the Middle East conflict.

United Airlines said the carrier is "preparing to support Spirit customers and employees" if Spirit shuts down and strands crews and passengers, a spokeswoman told CNBC. Other airlines are likely to follow suit.

Spirit, which pioneered the low-cost budget airline model, has been challenged for years by rising costs, changing consumer tastes and a engine recall. A planned acquisition of Spirit by JetBlue Airways was successfully challenged by the Biden administration two years ago.

The surge in fuel prices since the U.S.-Israel strikes on Iran in February has added to Spirit's challenges. The airline had expected to emerge from bankruptcy midyear before the jump in fuel prices.

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