As the Trump administration weighs a potential rescue of Spirit Airlines from bankruptcy that would have the government own 90% of the company, numerous analysts have noticed a similar pattern across other industries and have raised concerns about it, according to a new report.
Spirit said in court this week that it is in advanced talks with the U.S. government over a financing package of roughly $500 million. However, this deal could open a "Pandora's box," according to Tad DeHaven, a policy analyst at the Cato Institute. Speaking to NBC News, DeHaven pointed out that numerous equity-sharing agreements have been made in recent years with companies like NVIDIA, Intel, MP Materials, and Westinghouse, among others.
She said that "once you open that box" of federal government/private equity deals, it's only a matter of time until "somebody is going to get in trouble, and they're going to see that their [only] option to survive is to get money from the federal government."
President Donald Trump framed the Spirit deal in blunt terms when he said on CNBC, "Spirit's in trouble and I'd love somebody to buy Spirit. It's 14,000 jobs," he said, adding that "maybe the federal government should help that one out." Transportation Secretary Sean Duffy said Trump had directed his department to examine options.
But even before the deal is finalized, critics in Congress are warning that a Spirit rescue could deepen fears that the government is again choosing winners and losers in private industry. Criticism has come from within Trump's own party. Sen. Ted Cruz called it a "TERRIBLE idea" on social media, and Sen. Tom Cotton called it "Not the best use of taxpayer dollars."
This is an absolutely TERRIBLE idea.
— Ted Cruz (@tedcruz) April 22, 2026
The TARP corporate bailouts were a huge mistake & the government doesn’t know a damn thing about running a failed budget airline (that the Biden admin killed). https://t.co/M99S1iZ64K
If Spirit’s creditors or other potential investors don’t think they can run it profitably coming out of its second bankruptcy in under two years, I doubt the US Government can either. Not the best use of taxpayer dollars.
— Tom Cotton (@SenTomCotton) April 22, 2026
Sen. Elizabeth Warren, a Democrat, has also raised concerns, claiming that the war in Iran was the final nail in the coffin for Spirit given increased oil prices and questioned: "What do the American people get out of this taxpayer bailout? Will the failed airline executives be held accountable?"
Donald Trump’s war with Iran caused the sky-high fuel prices that finally did Spirit Airlines in.
— Elizabeth Warren (@SenWarren) April 22, 2026
What do the American people get out of this taxpayer bailout?
Will the failed airline executives be held accountable? https://t.co/BxLOiDg7K1
JPMorgan analyst Jamie Baker told NBC News that if the deal goes through, other airlines like "JetBlue and Frontier would be inclined to quickly follow Spirit's lead." He also wondered if American Airlines would be "far behind." He added: "Truthfully, we can think of no greater defiant gesture towards the likes of Delta and United than the government stepping in with lopsided assistance."
Spirit's situation is especially loaded because it comes after years of market and regulatory upheaval. The airline filed for bankruptcy in November 2024 after persistent losses, failed merger attempts, and mounting debt pressures. A federal judge blocked JetBlue's $3.8 billion takeover of Spirit in early 2024 after the Justice Department argued the deal would reduce competition and hurt price-sensitive travelers.
