Spirit Airlines Files for Bankruptcy Protection Again
Spirit Airlines has once again sought bankruptcy protection, marking its second Chapter 11 filing in under a year. Despite this, the airline reassured passengers that its flights, ticket sales, reservations, and loyalty programs will continue uninterrupted.
This latest filing occurred on a Friday, building on the company’s first Chapter 11 filing from December 2024.
In its previous restructuring, creditors had exchanged $795 million in debt for equity, allowing Spirit to avoid more drastic measures like reducing its fleet or significantly cutting back on operations.
However, this time, Spirit plans to scale back its flight network and aircraft count, which the company anticipates will lead to savings of “hundreds of millions of dollars” each year.
“After completing our last restructuring, which focused only on lowering our funded debt and raising equity, it’s become clear that more steps are needed to ensure Spirit is positioned for long-term success,” noted CEO Dave Davis in a statement.
In its recent court documents, Spirit indicated that its assets and liabilities fall within the range of $1 billion to $10 billion.
“Nearly every major U.S. airline has used Chapter 11 to strengthen operations and secure their future,” Spirit remarked in a post on Instagram.
Back in December, Spirit had forecasted a $252 million profit for 2025. Yet, they revealed earlier this month that the airline suffered a loss of nearly $257 million from March 13, which is when it emerged from Chapter 11, to the end of June.
Spirit has warned that its future may be at risk without a significant increase in liquidity. The company also disclosed that its credit card processor was demanding more collateral. In response, Spirit tapped into the full $275 million available from its revolving credit line and indicated that the processor could potentially withhold up to $3 million in daily ticket sales.
The airline’s financial challenges have severely impacted its stock, which has plummeted 72% in the past month and fell another 45% in after-hours trading on Friday.
