According to a source, the United States would consider resorting to the Defense Production Act as part of the restructuring of Spirit Airlines.

By David Shepardson and Kanishka Singh

The administration of President Donald Trump is considering using the Defense Production Act as a legal basis to bail out Spirit Airlines, a source told Reuters.

CBS News was the first to report on this project on Friday, citing US officials close to the discussions.

The source indicated that the government could invoke Title 3 of the Defense Production Act, which allows the US government to invest in industrial capabilities to ensure supply chains for national defense.

The Trump administration “continues to explore possible options to ensure that the airline remains operational for its passengers and employees,” said White House spokesperson Kush Desai.

He added that information regarding the financing mechanism or structure should be considered as speculation.

The Defense Production Act is an emergency measure that allows the US government to require private companies to prioritize federal contracts and increase production of essential goods. It also allows for loans to private companies for national defense purposes, a measure that could provide support to the airline.

Trump said on Thursday that his administration is considering buying the struggling airline at a “reasonable price.”

“When the price of oil drops, we will sell it to make a profit,” he told reporters at the White House.

The low-cost Florida-based airline is running out of time. An attorney for Spirit said on Thursday that the company needs new financing or access to its liquidity by the end of next week, and a hearing is scheduled next week as the company’s lawyers and creditors seek to reach an agreement on a bankruptcy exit plan.

The Trump administration made a financing offer to help the airline emerge from bankruptcy, an offer that was being reviewed by its main creditors, an external attorney for Spirit said on Thursday.

An attorney for Spirit’s creditors said on Thursday that they were reviewing a list of conditions of the government’s offer, which, according to some sources, includes $500 million in financing and a condition that the government would receive warrants equivalent to 90% of Spirit’s equity.

This priority financing granted to the debtor in possession of its assets would help Spirit emerge from its second bankruptcy restructuring since 2025.