"The Amtrak of the skies"? Trump's interventionism comes for Spirit Airlines

Catch up quick: Spirit — a budget airline that's been teetering on the edge of liquidation — is in advanced discussions to borrow up to $500 million from the government, according to a person familiar with the matter.

• The deal would likely provide equity warrants giving Uncle Sam a substantial ownership stake in the trouble business — possibly as much as 90%.
• "I guess it would be the Amtrak of the skies," Tad DeHaven, policy analyst at the Cato Institute, tells Axios.

Follow the money: Trump has previously tied government intervention to stated policy goals — and to a financial return for the U.S.

• He procured a 10% stake in Intel for the U.S. in exchange for CHIPS Act cash.
• He got Nvidia to agree to give the U.S. 25% revenue from certain chip sales to China in exchange for relevant licensing.
• He acquired shares in multiple companies in the rare earth and mining space, including MP Materials and USA Rare Earth.

Friction point: If the government takes over Spirit, it would mark a renewal of a bailout strategy that defined the financial crisis of 2008-09, when the U.S. took ownership stakes in General Motors, Chrysler and various banks.

• But those companies were generally deemed too big to fail — a distinction that does not apply to Spirit, which has only 3.4% U.S. market share as of the 12-month period ending in February.

What they're saying: "You may temporarily save some jobs at Spirit, but what does this mean for everybody who's employed at the other airlines, who are clearly going to be put at a competitive disadvantage because now ... Spirit will be a privileged entity," DeHaven says.

• The other side: "We are hopeful that the government will recognize the needs for emergency funds, especially in the current economic environment," a spokesperson for the Association of Flight Attendants-CWA, a union representing workers at 20 airlines including Sprit, tells Axios.
• "The Trump administration continues to monitor the situation and overall health of the U.S. aviation industry that millions of Americans rely on every day for essential travel and their livelihoods," White House spokesman Kush Desai said in a statement.
• Spirit reps declined to comment.

Reality check: Government aid for and control of airlines isn't a new concept.

• The industry received aid when 9/11 and the COVID pandemic temporarily cratered travel.
• Before deregulation in the late 1970s, the federal government set ticket prices and controlled routes.

Meanwhile, the prospective bailout is reviving a debate over whether the Biden administration set the stage for Spirit's demise when it blocked the company's proposed merger with JetBlue on anticompetitive grounds.

• "Spirit Airlines would be on a much firmer financial footing had the Biden administration not recklessly blocked the airline's merger with JetBlue," Desai said.
• Rohit Chopra, former CFPB director under Biden, said blocking the JetBlue deal wasn't a mistake, arguing Spirit's problems worsened after pursuing the "illegal" merger and that it should have fixed its finances sooner.
• DeHaven argued that the Biden administration's "horrible antitrust policy" played a role in triggering Spirit's crisis but argued that Trump's "horrible foreign policy" — the Iran war, which spiked jet fuel prices — made it worse.

💭 Our thought bubble: Nobody believes that the demise of Spirit would translate into a form of contagion for the travel business, but whether it's worth it to save jobs and cheap tickets is a different question.

The bottom line: Trump has discarded the Republican Party's age-old hands-off approach with the economy in favor of this-for-that interventionism.