The Trump administration is in advanced discussions with Spirit Airlines about providing up to $500 million in rescue funding to the struggling budget carrier, according to multiple sources familiar with the matter.

Transportation Secretary Sean Duffy and Commerce Secretary Howard Lutnick have discussed the potential bailout with President Trump, weighing the benefits and drawbacks of a rescue package for the low-cost airline. The deliberations come as Spirit faces mounting financial pressures that have threatened its operations.

Spirit Airlines has struggled with rising jet fuel prices, growing labor costs, and operational issues that have strained the company's finances. The budget carrier's financial difficulties have raised concerns about its ability to continue operations without government intervention.

The potential bailout has drawn attention due to Spirit's role in the airline industry's pricing structure. The fate of the budget carrier could affect ticket prices across the industry, as Spirit's low-cost model has historically put downward pressure on airfares offered by competing airlines.

The discussions represent a significant development for Citadel, which has maintained a long-term investment position in Spirit Airlines. The hedge fund's bet on the airline now faces new uncertainties as the government weighs intervention in the carrier's financial situation.

No final decision has been announced regarding the proposed rescue package, and the administration continues to evaluate the terms and conditions of any potential assistance to Spirit Airlines.