Spirit Airlines warned that there are “substantial doubts” about its ability to continue operating over the next 12 months, just five months after emerging from bankruptcy protection under Chapter 11.
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Known for its no-frills, low-cost flights operated with a fleet of bright yellow planes, Spirit has struggled to regain profitability and strengthen resources to compete with rivals since the COVID-19 pandemic. Rising operating costs and increasing debt led the company to file for bankruptcy protection in November 2024. By that time, the airline had accumulated losses exceeding $2.5 billion since early 2020.
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In the second quarter of 2025, the company reported a net loss of $245.8 million, which is higher than the $192.9 million from the same period the previous year. After emerging from bankruptcy in March, Spirit managed to restructure part of its outstanding debt and secure new financing for its future operations.
Since then, it has implemented cost reduction measures, including plans to temporarily lay off about 270 pilots and downgrade around 140 captains to first officers. These actions, announced in July, will take effect on October 1 and November 1 to align with the “projected flight volume for 2026,” as indicated by the company in its quarterly report. These measures add to previous staff cuts before the bankruptcy declaration.
Additionally, Spirit faces weaker demand in domestic leisure travel and an excess capacity that is putting pressure on prices to decrease. In order to preserve liquidity, they are also evaluating the possible sale of non-essential assets, such as aircraft, real estate, and airport gate usage rights. They are also negotiating with their credit card processor, who is demanding higher collateral before renewing the current contract, which expires at the end of the year.
After the announcement, Spirit’s shares fell sharply, ranging from $1.80 to $2.38 per unit, representing a loss of up to 40% of their value in the session.