President Donald Trump's administration has tabled a rescue plan for Spirit Airlines, offering a $500 million taxpayer‑backed package that combines a loan with warrants converting into a 90 percent equity stake after a clean‑up. Creditors face a stark choice: accept the deal and avoid liquidation or watch the carrier, which has filed for bankruptcy twice, dissolve entirely. It would also unlock restricted cash on Spirit’s books.

Senior lenders whose claims total about $275mn are broadly supportive; under the plan their senior revolving credit facility would roll into the reorganised airline, preserving most existing terms. Junior claimants—bondholders, vendors and counterparties owed billions—stand to receive nothing either way, yet back the proposal to safeguard 17,000 jobs and avert $4 billion of dissolution costs. and avoid a costly court battle.

Mid‑tier bondholders—Citadel, Cyrus Capital, Ares and Pimco—would obtain a small portion of the roughly $900 million owed plus the tenth of equity left after the government’s take, barely improving on liquidation. Spirit posted a $60 million pre‑tax loss in two months as fuel prices jumped, making the rescue appear driven by political pressure. A failed bailout would ultimately burden U.S. taxpayers.