The Trump administration is negotiating a federal loan of up to $500 million to rescue Spirit Airlines from its second bankruptcy in two years. The ultra-low-cost carrier has struggled since 2019, failing to report a profit and facing mounting financial pressures in the competitive airline industry.

Spirit's financial troubles stem from aggressive expansion strategies that left it vulnerable to market downturns. The airline's Chapter 11 filing marks a dramatic reversal for a company that once challenged legacy carriers with rock-bottom fares. Industry analysts note that Spirit's collapse would eliminate a major competitor in the budget travel sector.

A government bailout would be controversial given Spirit's history of aggressive cost-cutting and customer service issues. The Biden administration previously extended pandemic relief to airlines but with stricter conditions. This rescue attempt signals growing concern about airline industry stability as travel demand fluctuates and fuel costs remain volatile.