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Navy Secretary Ousted Amid Naval Blockade of Iranian Ports; Source: Spirit Airlines Close to $500M Government Bailout. Aired 6- 6:30a ET

Aired April 23, 2026 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[06:00:15]

AUDIE CORNISH, CNN ANCHOR: All right. So, the Navy secretary has been ousted in the middle of a blockade operation. Why so -- why so many military shakeups in the middle of a war?

(BEGIN VIDEO CLIP)

KAROLINE LEAVITT, WHITE HOUSE PRESS SECRETARY: We are completely strangling their economy through this blockade.

(END VIDEO CLIP)

CORNISH: So, the Pentagon is telling lawmakers it could take six months to clear the Strait of Hormuz. Can the global economy afford to wait that long?

(BEGIN VIDEO CLIP)

REP. HAKEEM JEFFRIES (D-NY): Our message to Florida Republicans is "F" around and find out.

(END VIDEO CLIP)

CORNISH: Could Florida be the next state to try to redraw the voting map? Some Republicans already regret the strategy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You've got to play chess. You've got to take two or three, four moves.

(END VIDEO CLIP)

CORNISH: So, Trump advisers are betting on this for midterm messaging: Democrats would be worse. So, will war-weary voters see through it?

(BEGIN VIDEO CLIP)

SEAN DUFFY, U.S. TRANSPORTATION SECRETARY: Can we do anything to save Spirit and make it viable?

(END VIDEO CLIP) CORNISH: So, the airlines are struggling, with one now looking at a government bailout. What does that mean for the next trip you want to book?

CNN THIS MORNING starts right now.

Troubled waters. A maritime standoff in the Middle East and now a shakeup in the top ranks of the U.S. Navy.

Good morning, everybody. I'm Audie Cornish. We're going to start with these new developments in the war.

So, this is new video from the Iranian state media, purportedly showing Iran boarding ships in the Strait of Hormuz. Now, though, at least one naval analyst is telling CNN the video looks like it could be staged, we do know this. There have been two vessels reportedly seized on Wednesday.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Does the president view that as a violation of the ceasefire?

LEAVITT: No, because these were not U.S. ships. These were not Israeli ships. These were two international vessels.

These two ships were taken by speedy gunboats. Iran has gone from having the most lethal Navy in the Middle East to now acting like a bunch of pirates. They don't have control over the strait.

(END VIDEO CLIP)

CORNISH: So, while the U.S. Navy fights these so-called pirates, as the White House just called them, the Navy secretary has been fired.

Sources tell CNN there was tension between Secretary John Phelan and defense secretary Pete Hegseth not about the war, but about shipbuilding. Here's the secretary just a few months ago.

(BEGIN VIDEO CLIP)

JOHN PHELAN, FORMER U.S. NAVY SECRETARY: The president has been clear. We must bring back our American maritime industrial might. And he has told me many times that as secretary of the Navy, it is my job to equip our sailors to win the fight at sea with the finest ships in our history.

(END VIDEO CLIP)

CORNISH: Now, so far, over a dozen military leaders have left or retired in recent months. Now we're in the middle of a war.

So, we want to ask about whether there is something to worry about. And so, we're bringing into the group chat Betsy Klein, CNN senior White House reporter; Alex Plitsas, CNN national security analyst and a former Pentagon official; Mike Dubke, former Trump White House communications director; and Meghan Hays, former Biden White House director of message planning.

Alex, I want to come to you in a moment, because you know what this means for the battlefield, so to speak.

Betsy, can you talk about what happened here? We're hearing about kind of a clash of personalities between Hegseth and Phelan. And do we know more about whether that's true?

BETSY KLEIN, CNN WHITE HOUSE CORRESPONDENT: Well, one thing we know is that Phelan had a direct line to President Trump, and that was something that bothered Secretary Hegseth.

But there is some remarkable reporting from our colleague Kristen Holmes. I want to just take you through it.

The president was frustrated by slow shipbuilding. That's something that's been a big priority for him. And he essentially told Hegseth that it is time to move on from Phelan.

So, Hegseth sent a message to Phelan, informing him he needed to resign or be fired.

Phelan did not believe that this message was coming from the president, so he started calling the West Wing, trying to call officials and figure out what was going on.

CORNISH: Because he's a real estate developer and Trump's, like, his neighbor, basically. I mean, they know each other going back a long time.

KLEIN: Yes, it's a long relationship. He doesn't have military experience. He ultimately asked to meet with President Trump, where that message was conveyed.

CORNISH: OK, so he has zero -- zippo -- military experience. The person following him does. Undersecretary Hung Cao. He even has, like, ordnance experience in the Navy. I mean, he's really been on the ground.

And he aligns with Trump politically. He's hardline anti-immigration, anti-diversity, all that kind of stuff.

Even though this is a long-term thing, ship building, doesn't that matter in this moment when we're worried about a kind of outdated fleet that may not have everything it needs, if it actually takes a hit?

ALEX PLITSAS, CNN NATIONAL SECURITY ANALYST: Sure. We've actually seen some substantive increases in budgetary requests for shipbuilding over the next couple of years. So, it is a big deal for the Navy.

It's a big deal, because we're pivoting to the Pacific, which is a naval fight, if we're going to counter China.

So, we've fought a land-based, largely war against non-state actors in central Asia and the Middle East for the last 25 years. We are behind. Our Navy is too small, so there is a need to rapidly make up for that.

Phelan was largely seen as somebody who was a proponent of larger Navy and larger shipbuilding, and he actually just finished a major speech at a conference last couple of days, NAVSEA Air (ph), where he was speaking about all of that. So, coming on the back end of this, it was a bit of a surprise to the community.

CORNISH: How -- should we worry? One, because of the blockade, right? As I said, if you take a hit in the blockade, is this one of the reasons why we can't necessarily be escorting other ships? Because we actually aren't positioned to do that?

And then the second thing, can I just throw up the images of the ranks, basically, of generals and that kind of, you know, middle management. That's a lot of, you know, what's it called? Institutional knowledge, right? Institutional expertise that you just boot out the door because, like, bad vibes or whatever; they don't agree with you.

It feels -- are we vulnerable when this is the way we approach leadership?

PLITSAS: So, I mean, some of the folks that are up on the screen, second from the bottom right there is Jamie Sands, my former office mate, Navy SEAL, two-star, was the commander of U.S. Navy SEALs across the across the community.

He, just like the Navy secretary, warfighter in the sense his job was to provide forces, right? So, he provided and took care of naval special warfare, recruiting SEALs, training them, and then (UNINTELLIGIBLE), that kind of stuff.

Most of the folks you see up there, minus the -- the SOUTHCOM commander, who's dead center at the top there, were folks that were responsible for either legal oversight or manning training, equipping of the force overall.

So, not a big impact directly on warfighting at the moment. It's more overall service, as you mentioned, institutional knowledge and whatnot.

CORNISH: Yes. But even Cao, like he was second, right?

PLITSAS: Yes.

CORNISH: Even though he had all the experience. And, like, Trump's neighbor is the guy who had the job.

PLITSAS: Right.

CORNISH: It just feels like going in, let's just say merit has very vague, I think, requirements in this scenario.

MIKE DUBKE, FORMER TRUMP WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I actually want to pick up on what was already spoken about.

I mean, the job that he had was procuring additional ships for the Navy, building out new ships for the Navy, doing all of those things, which you don't necessarily need -- you basically need to have a better understanding of how to procure things, put things together than actually when they go out onto the -- onto the sea.

And our Navy is -- is in need of a serious retread.

CORNISH: Yes.

DUBKE: So, I don't really have a problem with that.

What this looks like more to me is, again -- and we talked about this a few weeks ago -- this is more Hegseth consolidating his power. He doesn't like anyone else in the building to be able to talk to the West Wing, to talk to the president other than himself.

CORNISH: Is there value in that, given wartime needs?

PLITSAS: I mean, just really immediate acquisition authority, there was nothing really going on.

CORNISH: No, I mean, being able to say like, look, no one else goes and talks to the president.

PLITSAS: I see.

CORNISH: But I'm the secretary of defense. I go to the commander in chief. Y'all can't be calling on the sides.

PLITSAS: Yes. I mean, it undermines the chain of command. I mean, the service secretaries report up to the secretary of war, secretary of defense, who then reports the president.

The direct relationship and kind of going around is very unique to the Trump presidency. That is not something that is traditional in any White House, to be honest with you.

CORNISH: What are you looking for in terms of off-ramps? Right? We had a hard deadline that, of course, kind of went away. There's an extension. You've got a lot of -- it's not clear how to properly negotiate with Iran, given their decentralized sort of command structure.

PLITSAS: Yes.

CORNISH: Can you give us the state of play there before we let you go?

PLITSAS: Sure. So what I'm hearing from both regional mediators as well as from backchannels and sort of in Iran, is there are multiple fractured groups within the IRGC, which is the 10 percent that makes up the military in Iran that reports to the supreme leader, who are not in agreement as to where we're going to go with this agreement at this point.

So, the Iranians have put forward a ten-point proposal that was very, I guess, maximalist in their demands to counter ours. Some of them are saying that they should stick to that. Others are saying, look, here's the reality of the situation. We need

to come to an agreement with the United States.

As a result of that, they -- they couldn't come to enough of an agreement to allow the civilian mediators to travel to meet with the United States in Islamabad.

CORNISH: So, the military is still in control?

PLITSAS: Military is still largely calling the shots. I'm told they can't override. But if they can't override, then why aren't the civilians there negotiating?

So, the blockade that's been instituted at this point, about $500 billion (ph) a day, is what it's costing the Iranians. There was a 20- million barrel-a-day gap in supply that was created as a result of closing off the risk -- excuse me, the straits by risk by the Iranians.

Ten million of that has been made up in production capacity globally with drips and drabs here or there. 10 million has been rerouted by barrels.

CORNISH: Yes.

PLITSAS: There's still going to be gaps in the supply chain that are going to cause economic ripple effects for some time after this.

CORNISH: And we're going to talk about that, especially when it comes to the airlines.

PLITSAS: OK. Yes.

CORNISH: But just getting a sense of, like, we're now seeing, I would call it, an escalation, if you're seeing --

PLITSAS: Sure.

CORNISH: -- seizing of ships, right? Like both blockades are active now.

[06:10:04]

PLITSAS: It's a tit-for-tat response to it.

So, the U.S. did seize a couple of boats. One of them at this point appears to have had precursors, at least, for missile building or missile motors or something along those lines. Rocket fuel that was coming from China, believe it or not, that was intercepted.

And then the Iranians responded. By now, a couple of ships in their waterways, in seizing them and, at the same time, offering rhetoric that we won't come to the table unless the blockades ended at the same time they're seizing ships.

So, they think that the continued blockade will put political pressure on President Trump, because they're worried. They think he's worried about losing the midterm elections, that that's their strategy. And for President Trump, their strategy right now is to try to choke off the cash going into Iran. At some point, it's going to cause them.

So right now, we're not in a battle of attrition. Were in a battle of wills to see who's going to give up first.

CORNISH: And we're going to talk about all those things today, including midterm elections. Thank you, Alex, for bringing that up. You guys stay with me.

Coming up on CNN THIS MORNING, I want to turn briefly to California, because it's trying to rein in the Trump administration on immigration. And there is a new ruling we want to tell you about.

Plus, a state of emergency in Georgia. Two massive wildfires there, burning out of control. Now we're going to talk about the blame game. Some Republicans fault party leaders for their redistricting loss in Virginia.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE; There's a lot of people saying, what the hell? Were we asleep at the wheel?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:15:57]

CORNISH: OK. It is now 15 minutes past the hour. I want to give you five things to know to get your day going.

So, while you were sleeping, the Senate was voting a lot. Senators were up for much of the night for a marathon voting session, which Republicans passed in a 50-48 vote.

It sets up Senate Republicans to eventually pass funding for ICE and Border Patrol without Democrats.

And the vote comes as the Department of Homeland Security has been shut down since mid-February.

And a federal appeals court is blocking a California law requiring federal immigration agents to wear identification. Now, that law had been passed in California last fall in response to the administration's immigration enforcement tactics.

And one of the federal government's arguments against the law was that it could compromise officers' safety.

Then, you've got two massive wildfires burning in Southern Georgia, more than 30,000 acres scorched. Crews are struggling to keep the flames away from dozens of homes.

(BEGIN VIDEO CLIP)

GOV. BRIAN KEMP (R), GEORGIA: In these type conditions, which is as severe as we've ever faced, any kind of spark wind blowing embers can start new fires as much as a mile away.

So, now there's a state of emergency in place for 91 Georgia counties.

(BEGIN VIDEO CLIP)

SEN. LISA BLUNT ROCHESTER (D-DE): Does the president know there is a historic measles surge occurring nationwide?

ROBERT F. KENNEDY JR., HEALTH AND HUMAN SERVICES SECRETARY: You want me to answer --

ROCHESTER: The question, it's just a very simple question.

KENNEDY: You just want to grandstand.

ROCHESTER: You're going to get your opportunity.

KENNEDY: You want to grandstand?

ROCHESTER: Can you answer?

KENNEDY: I can answer that question. I didn't cause the measles epidemic. It started before I came in.

(END VIDEO CLIP)

CORNISH: OK. Health Secretary Robert F. Kennedy Jr., wrapping up a marathon of seven often contentious congressional hearings just this week, all over the department's budget.

And the secretary was on defense on topics ranging from vaccine policy. And then there are these promotional videos of him swimming in blue jeans with Kid Rock.

And an A.I. company, Anthropic, saying they have no, quote, "kill switch" once their A.I. models are deployed in classified, military networks.

And anthropic is arguing in an appeals brief against the administration's attempt to label the rapidly growing A.I. company as a supply chain risk.

This is all fallout from a contract dispute between Anthropic and the Pentagon. And Anthropic is concerned about its A.I. models being used in fully autonomous weapons or to surveil Americans.

And after the break on CNN THIS MORNING, we're going to talk about the idea of bailing out Spirit Airlines. The Trump administration ready to step in to help the budget airliner. Will the war with Iran force them to help more?

Plus, lawmakers pulled an all-nighter on Capitol Hill. The vote-a-rama that just wrapped up.

Good morning, in the meantime, to Denver. I know it's still night, but your Nuggets tried to take the lead in the series against the Timberwolves in the NBA finals.

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[06:23:09]

CORNISH: OK, so the summer travel season is inching closer, and air travel, yes, it's going to be complicated.

Obviously, the war with Iran is sending jet fuel prices skyrocketing. United is raising fares. Lufthansa is canceling flights. Alaska Air says, even if fuel prices drop, fares are going to stay high.

And then there's Spirit Airlines, which has nowhere left to turn but a bailout. A source familiar with the negotiations is telling CNN that a $500 million deal would include the federal government securing a stake in the budget airline.

(BEGIN VIDEO CLIP)

LEAVITT: Well, I understand the airline is bankrupt, because the previous administration blocked the merger, which was probably not a wise move.

Obviously, this is something the Commerce Department and the president are tracking. I don't have any updates or announcements, but the aviation industry is very important to this president and this White House.

(END VIDEO CLIP)

CORNISH: So, Spirit has not commented on the idea of a deal. They tell CNN, "We are operating our business as normal."

Joining me now, Nick Ewen. He's editor in chief for "The Points Guy." You guys keep an eye on the industry. And I think we're trying to figure out: is this a case of Spirit problems versus war in Iran, fuel, and overall airline vulnerability?

Here's what President Trump said when he called into CNBC about Spirit.

(BEGIN VIDEO CLIP)

DONALD TRUMP, U.S. PRESIDENT (via phone): Spirit's in trouble, and I'd love somebody to buy Spirit. It's 14,000 jobs. And maybe the federal government should help that one out. You know, I told my people.

(END VIDEO CLIP)

CORNISH: And then the response from senators on both sides of the aisle is frustration. I think, honestly, they're just triggered by the word "bailout," which, fair. You had Ted Cruz saying, "This is an absolutely terrible idea."

You had Elizabeth Warren saying, yes, what would the American people get out of this?

So first, how realistic do you think this is?

[06:25:04]

NICK EWEN, EDITOR-IN-CHIEF, "THE POINTS GUY": Well, I think Spirit is in a really tough financial position right now. So, I do think that it is very possible that the government could pursue this, because there are a number of jobs. And Spirit, as a low-cost airline, does exert competitive pressure on other airlines to keep their fares low.

But right now, their financial position is so dire that, without any support or an outside investor coming in, it could really be challenging for them to stay afloat and continue running their operations.

CORNISH: "The Wall Street Journal" is reporting that Trump actually met with the transportation secretary, Sean Duffy, and also the commerce secretary, Howard Lutnick.

And then later, they were saying, Look, we don't want to put good money after bad. He says there's been a lot of money thrown at Spirit. They haven't found their way into profitability. And so, would we just forestall the inevitable? And then own that?

That's a good question. Can you talk about what the industry thinks about that?

EWEN: Yes, of course. The bottom line is that Spirit has to find a pathway towards longer term success. Now, that could be that the government takes a temporary stake. And then, ultimately, there is some consolidation in the industry.

Of course, the piece earlier referenced the merger, proposed merger between JetBlue and Spirit that was blocked and ultimately halted by a judge.

But at the end of the day, Spirit has to figure out what the future looks like in order to be successful, and that's likely what the government would be looking at: is this is not just about injecting cash. This is about a long-term plan towards financial viability.

And that's going to be the key thing that would move any of these conversations forward.

CORNISH: Is this war destabilizing companies in the industry that are already vulnerable?

EWEN: Well, that's exactly what's happened with Spirit. Spirit was already in a really tough financial spot. A number of factors contributing to that, including increased leasing costs, some engine issues they had, and just their overall operating model. They've been struggling a lot coming out of the COVID pandemic.

We have seen other airlines have similar issues, but they haven't gotten to the point of being on the brink of liquidation. They are larger. They have joint venture partners, other airline partners that can offer, essentially, a lifeline by funneling passengers and offering a broader route network.

So, right now, Spirit is relatively unique, but this could, depending on how long this continues, really have a drag on airline financial success. And down the road, we could start to see others get into a more precarious situation.

CORNISH: In the meantime, it seems like they're raising prices. Maybe I'm misreading it from my trauma from my spring break and being in the airport during the TSA meltdown. But prices are up 20 percent. That's not 2 percent or 4 percent. That's a lot, especially for those coach travelers.

Can you talk about the -- realistically, during this war, what our travel budgets are going to look like?

EWEN: Yes, that's an unfortunate reality. Jet fuel tends to be the second largest expense for an airline aside from labor. So, if you see these hugely increased prices, you're talking about hundreds of millions of dollars in added expenses. And that can really eat into an airline's profit.

They're going to do everything they can to not pass along those costs to customers, because they know that demand is highly dependent on pricing. But at some point they have to.

And that's what we're already starting to see. So, there's a combination of increased prices, as well as some small but still significant cutbacks to some routes that are maybe unprofitable, that aren't fully fleshed out with demand.

So, it is having a real broad impact. If you haven't booked your summer travel, I would say go ahead and do so now. Lock in a flight before it gets even more expensive, because right now, with no clear end in sight to this conflict, we just don't know where prices are going to stop. They could continue to increase in the weeks and months to come.

CORNISH: All right, that's Nick Ewen at "The Points Guy." Thank you.

EWEN: Of course. Thanks for having me on.

CORNISH: Now straight ahead on CNN THIS MORNING, here's one possible midterm strategy for Republicans: saying it could be worse if the Democrats were in charge. So, we're going to ask about whether voters are going to respond to that.

And then dreams will come true tonight. The NFL draft just hours away

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[06:30:00]