Spirit is running out of money and time. Trump sounded tepid about a deal to save it

By Chris Isidore, Donald Judd, CNN

(CNN) — President Donald Trump told reporters at the White House Friday that the administration will likely make an announcement on its decision whether or not to bail out Spirit Airlines “today or tomorrow.”

The long-troubled budget airline carrier is preparing to stop operations, according to reports on Friday, a move that could leave millions of Spirit passengers trapped across the country and 17,000 employees out of work.

“Well, we’re looking at it– but if we can’t make a good deal, no institution’s been able to do it,” Trump said on Friday. “I’d like to save the jobs, but we’ll have an announcement sometime today. We gave them, we gave them a final proposal.”

Earlier Friday, a Spirit Airlines spokesperson told CNN it had no direct comment on possible shutdown reports.

“Spirit is operating as usual,” said the spokesperson. As of the time of publication, Spirit Airlines appeared to be operating normally.

Soaring jet fuel prices derailed Spirit’s plans to emerge from its second bankruptcy, and negotiations with the federal government on a possible $500 million bailout or government purchase haven’t yielded a result acceptable to the government and all of Spirit’s creditors.

CNN reported earlier this week Spirit Airlines was having trouble reaching a deal with a group of its creditors on the proposed federal government bailout, according a source familiar with negotiations. An attorney for Spirit told a bankruptcy court last week that the airline was in “very advanced discussions” with the administration on a rescue package.

Other airlines have said they will step in and help any stranded Spirit passengers or employees.

But removing the airline’s flights is likely to raise fares across the entire US airline industry, as flyers compete for fewer available seats.

All air carriers have been struggling with higher jet fuel costs, which have nearly doubled since the start of the war in Iran. Jet fuel is the second greatest cost for airlines, behind only labor.

To help compensate, airlines have been raising fares and increasing fees, such as for checked bags. But fierce competition for travelers has kept them from passing along all of the costs to customers. And discount carriers like Spirit have a harder time raising fares due to its dependence on bargain hunting customers.

Spirit has about 9,000 flights scheduled from May 2 through the end of the month, according to aviation analytics firm Cirium. That works out to an average of 300 flights and 60,000 potential passengers a day affected in just the next month should the airline shut down.

What happens to passengers?

If the airline ceases operations, passengers with tickets for upcoming Spirit flights should file claims with the issuer of the credit or debit card used to purchase the tickets. Those who paid cash, however, would have to wait for reimbursement along with the company’s other creditors.

Passengers in the middle of a trip would need to find a seat on another airline. Last-minute “walk-up” fares are the most expensive in the industry.

This is a developing story. It will be updated.

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