“Capitalism works because losers die”: investor criticizes airline aid
Spirit Airlines may only have a few days to provide a financial breathing space, but multimillionaire investor and Shark Tank star Kevin O’Leary believes Washington should let the low-cost airline fail for good.
In an interview with NewsNation’s Katie Pavlich Tonight, O’Leary called the Trump administration’s eventual $500 million plan to rescue Spirit Airlines a “terrible idea,” arguing that propping up failed companies undermines the logic of American capitalism.
“All these bailout programs for companies that are going bankrupt — capitalism works because the losers die; the assets end up being absorbed by the market, by private equity funds, creditors or other strategic buyers, but that’s mismanagement,” O’Leary said.
“You don’t want to support bad management. You want to let them die,” he continued. “That’s how the private system works. The best rise to the top, and the worst end up leaving the market.”
What’s happening with Spirit Airlines
The Shark Tank investor’s comments come as the Trump administration enters advanced talks on a bailout for the low-cost company.
The package under discussion could reportedly include a loan of up to US$500 million, with guarantees that could give the federal government the right to own up to 90% of the airline after it emerges from bankruptcy protection.
Spirit filed for bankruptcy protection twice in about a year: first in November 2024 and then again in August 2025, after a federal judge blocked its proposed merger with JetBlue and the company had difficulty adapting to the change in post-pandemic travel patterns, with greater demand for premium services.
The company was on track to emerge from its second bankruptcy this summer until the cost of jet fuel soared following the outbreak of conflict between the United States and Iran in late February.
That would add about $360 million to Spirit’s expenses if fuel stays around $4.60 per gallon (3.78 liters), according to JPMorgan.
President Donald Trump signaled support for a bailout last week, telling CNBC: “Spirit is in trouble, and I would love for someone to buy Spirit.
“There are 14 thousand jobs, and perhaps the federal government should help in this case”, he continued.
Commerce Secretary Howard Lutnick has been one of the “leading advocates” within the administration in pushing for an equity stake, CBS News reported.
But the idea has faced bipartisan resistance. Transport Secretary Sean Duffy told Reuters he was cautious about putting “good money after bad”.
“Too much money has already been put into Spirit, and they haven’t been able to find a path to profitability,” he said. “So are we just delaying the inevitable so we can get on with it? Or does Spirit have some path to success? I don’t know the answer.”
Senator Ted Cruz (R-Texas) also called the proposal “an absolutely terrible idea.”
“The TARP corporate bailouts were a huge mistake, and the government understands absolutely nothing about how to run a failed low-cost airline (which the Biden administration destroyed),” Cruz wrote in an X post on April 22, referring to the Troubled Asset Relief Program, the $700 billion bailout program approved by Congress in October 2008 during the financial crisis under then-President George W. Bush.
Tad DeHaven, a public policy analyst at the Cato Institute, also told Fortune in an interview with Diane Brady that the deal comes down to “money, power and influence.”
“What is desperately needed is for Congress to step in and say no to government stock takeovers,” he warned. “That’s opening a Pandora’s box.”
Spirit has repeatedly declined to comment on the negotiations and said it is “operating normally.”
A position already known to O’Leary
O’Leary’s stance on the possible rescue of Spirit Airlines follows an old pattern for the investor, who is president of O’Leary Ventures and built his fortune after selling Learning Co. (formerly SoftKey) to Mattel for US$4.2 billion in 1999.
The Shark Tank star has spent years using his platform to argue against government intervention in private markets.
During the 2020 pandemic, O’Leary told CNBC that struggling airlines should “go bankrupt” rather than receive federal aid. And after the collapse of Silicon Valley Bank in 2023, he criticized regulators for guaranteeing uninsured deposits, citing moral hazard.
Weeks later, as First Republic was on the brink of collapse, he told Bloomberg TV that weak regional banks should be allowed to fail: “Let the ones run by idiots go to zero. That’s the great virtue of markets: They find the bad managers, weed them out, and they get them out of the system.” He has also called student debt forgiveness “un-American.”
So his message about Spirit’s potential bailout is essentially the same one he’s been repeating for years: Let the market decide.
“That’s what keeps America great. That’s why it works. That’s why it’s the number one economy in the world,” O’Leary said. “That’s why everyone wants to be an entrepreneur, to try to gain their independence.”
