O'Leary: Possible Spirit Airlines bailout 'really bad idea'

Millionaire investor Kevin O’Leary is not sold on the Trump administration’s reported plan to bail out Spirit Airlines, calling it a “really bad idea.”

“Capitalism works because the losers die,” O’Leary said during a Thursday appearance on NewsNation, warning the federal government against supporting “bad management.”

President Trump floated the possibility of a bailout Tuesday after reports surfaced that the administration was considering a rescue plan for the airline that could include $500 million in government-backed financing.

“It’s 14,000 jobs. Maybe the federal government should help that one out. I told my people,” he said during an interview on CNBC’s “Squawk Box.”

Bloomberg reported that the deal could eventually give the U.S. government the option of up to a 90 percent ownership stake in the airline, which has filed for bankruptcy twice within the past year.

O’Leary argued that the Trump administration ought to let Spirit “die” instead, saying “that’s how the private system works.”

“The best rise to the top, and the loser dogs out of business,” he told NewsNation’s Katie Pavlich. “That’s what keeps America great. That’s why it works. That’s why it’s the number one economy on Earth.”

The proposed bailout quickly drew criticism from conservative lawmakers, including Sen. Ted Cruz (R-Texas), who blasted it as “an absolutely TERRIBLE idea.” An advocacy group aligned with former Vice President Mike Pence (R) also came out against the idea.

“American families shouldn’t be forced to bail out Spirit and the shareholders or pay the bill to see if the federal government can run an airline. Conservatives must oppose this bailout,” Advancing American Freedom wrote in a memo first obtained by The Hill on Thursday.

The group questioned why taxpayers should bail out a “uniquely unprepared” company, drawing parallels to the Troubled Asset Relief Program. The program, under which the federal government purchased toxic assets from financial institutions, was created to respond to the 2008 financial housing crisis.

Some hesitation to move forward with a rescue deal is also reportedly coming from inside the administration.

“What we don’t want to do is put good money after bad, and there’s been a lot of money thrown at Spirit, and they haven’t found their way into profitability. And so would we just forestall the inevitable and then own that?” Transportation Secretary Sean Duffy told Reuters in an interview Tuesday.

“Or does Spirit have some pathway to make it, and I don’t know the answer to that,” he added. Duffy also raised concerns about the possible precedent a bailout could set.

“By the way, if you do do ‌Spirit, ⁠who comes next? Who is the third?” he asked, rhetorically.