Spirit Airlines’ efforts to secure a $500m US rescue financing package have hit a roadblock, with key creditors – including hedge fund giant Citadel – resisting proposed terms, according to a report by Bloomberg News.

The discussions are part of a broader restructuring effort for the embattled airline, but negotiations have stalled as lenders object to conditions they argue would significantly reduce the value of their claims and limit potential recoveries.

A group of creditors that includes Citadel has reportedly submitted a counterproposal in recent days, although sources cited in the report said it has not yet received a response.

The dispute highlights tensions between Spirit’s lenders and stakeholders over how losses should be allocated in any government-backed or restructuring-related financing package.

Citadel reportedly declined to comment on the negotiations, while Spirit Airlines did not immediately respond to requests for comment.

The latest setback comes shortly after reports indicated that Spirit had secured backing from two of its three main creditor groups, raising expectations that a rescue deal was close to completion.

However, the breakdown in talks suggests consensus among lenders remains incomplete, complicating the airline’s restructuring path.

Adding further uncertainty, US President Donald Trump has recently suggested the administration could consider acquiring Spirit Airlines at the “right price,” underscoring the political dimension surrounding the carrier’s financial future.

If creditor groups reach agreement, a hearing in a New York federal bankruptcy court could take place as soon as Thursday, though the stalled negotiations now cast doubt on that timeline.