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Trump Plans $500M Rescue for Spirit Airlines
President Trump's team is in advanced talks to rescue Spirit Airlines. The airline is in serious financial trouble.
The rescue package could include up to $500 million in loans. Spirit Airlines is struggling with soaring fuel costs.
These rising costs are linked to the ongoing United States war with Iran. Higher fuel prices could add about $360 million to Spirit's costs this year.
That would exceed all the cash the airline has available. The rescue deal may also give the United States government up to 90% ownership of Spirit. Spirit Airlines is currently in Chapter 11 bankruptcy for the second time in two years.
Klear Note — Spirit Airlines is a budget airline serving US travelers. Chapter 11 bankruptcy lets companies keep operating while restructuring debts. Fuel costs are airlines' biggest expense.
Key Terms 3
- rescue package
- Money given by the government to save a failing company
- Chapter 11 bankruptcy
- A legal process letting a company reorganize debts to avoid closing
- warrants
- Legal rights allowing the government to take ownership of the company