Pence blasts Spirit bailout

Mike Pence’s political group is urging Republicans to oppose a proposed federal rescue for Spirit Airlines as the Trump administration weighs a package that could leave taxpayers owning most of the carrier. (thehill.com) Advancing American Freedom, the group Pence founded, said on April 23 that “American families shouldn’t be forced to bail out Spirit,” after reports that Washington was discussing a $500 million package and a stake of up to 90%. (thehill.com) Spirit’s lawyer told a U.S. bankruptcy judge on April 23 that the airline needs access to cash or new financing “no later than the end of next week” to keep operating. CNBC reported the government option under discussion is a $500 million loan that would sit ahead of other lenders. (cnbc.com) President Donald Trump said Thursday he was open to a taxpayer-funded takeover “for the right price” and suggested the government could later resell the airline after oil prices fall. Spirit Chief Executive Dave Davis said the company was “grateful” for Trump’s support. (cbsnews.com) The fight is bigger than one airline because Spirit is one of the country’s best-known ultra-low-fare carriers, and its collapse could cut seats on price-sensitive routes while throwing 14,000 jobs into question. Trump cited that job figure when he first floated federal help on April 22. (cnbc.com) The politics are also unusual. Republican senators Ted Cruz, Tom Cotton, Mike Lee and Ted Budd have all criticized the idea, while Pence’s group has compared it to the kind of corporate bailout conservatives fought during the Troubled Asset Relief Program era. (thehill.com) Spirit entered this latest stretch of distress after years of losses, an engine recall, higher costs and a blocked sale to JetBlue. In a March 13 restructuring filing, the airline said it expected to cut debt and lease obligations from $7.4 billion to about $2 billion and emerge from Chapter 11 by early summer. (ir.spirit.com) That plan has since come under pressure from higher fuel costs tied to the Iran war, according to Spirit’s court statements and reporting on the talks. CNBC reported the airline had been facing a potentially imminent liquidation before the government discussions accelerated this week. (cnbc.com) White House officials have argued that Spirit would be in stronger shape if the Biden administration had not blocked the JetBlue merger, while critics inside the party say a government-owned airline would cross a line Republicans usually reject. (cnbc.com) For now, Pence’s intervention adds another prominent conservative objection just as Spirit says its cash runway is measured in days, not months. The next test is whether the White House turns those talks into a signed deal. (cnbc.com)