Spirit Airlines Files for Bankruptcy Again

Spirit Airlines has recently sought bankruptcy protection for the second time in just a year. Despite this, the airline has reassured its passengers that flights, ticket sales, bookings, and loyalty points will remain operational as usual.

This latest filing, categorized as Chapter 2, follows an earlier Chapter 1 submission from December 2024. In the previous restructuring, Spirit’s creditors had agreed to swap $795 million in debt for stock. However, the airline opted against more extensive cost-cutting measures at that time, leading to a reduction in fleet size and overall business operations.

Currently, Spirit has announced plans to cut back on both its flight network and aircraft numbers. This initiative is anticipated to save the company “hundreds of millions of dollars” annually.

“After completing our final restructuring that focuses solely on reducing funded debt and increasing equity, it has become clear that more steps are needed to position Spirit for long-term success,” stated CEO Dave Davis on Friday.

In its recent court documents, Spirit reported assets and liabilities estimated between $1 billion and $10 billion each.

“Almost all major US airlines have used Chapter 11 to strengthen operations and secure the future,” Spirit mentioned in an Instagram post on Friday.

Back in December, Spirit had forecasted a profit of $252 million for 2025. Yet, just this month, the airline disclosed a staggering loss of nearly $257 million as of March 13.

Spirit has also indicated that its survival could be at risk without a significant boost in liquidity. The company revealed that credit card processors requested additional collateral, and it might need to tap into a $275 million revolving credit line, which could lead to a halt in ticket sales, impacting revenue by as much as $3 million a day.

Financial troubles have severely affected Spirit’s stock prices, which plunged 72% last month, followed by another 45% dip during after-hours trading on Friday.