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Spirit Airlines’ financial tailspin has been shaking up air travel for budget-conscious fliers — and more turbulence is ahead.
The Florida-headquartered air carrier known for its no-frills flying and ultra-low-cost fares has filed for Chapter 11 bankruptcy protection twice in less than a year amid a tough market for budget airlines.
Throughout the restructuring process, Spirit has cut jobs, downsized operations, and axed a slew of routes, with more to come — leaving travelers with fewer affordable options to fly as the busy holiday season approaches.
How Spirit got here
Spirit first sought bankruptcy protection in November 2024, following years of mounting financial losses and the collapse of a proposed $3.8 billion merger deal with JetBlue.
The budget airline, easily recognizable thanks to its bright yellow planes, reported in its initial voluntary bankruptcy petition that as of September that year, it had $9.49 billion in total assets and $8.99 billion in total debts.
Spirit emerged from bankruptcy in March after the airline said it slashed $800 million in debt and received a $350 million equity infusion from existing investors “to support Spirit’s future initiatives.”
The rebound was short-lived.
In a Securities and Exchange Commission quarterly report filed in August, the airline’s parent company, Spirit Aviation Holdings, warned it may not be able to stay in business another year.
“Management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” the company wrote.
Spirit, the company wrote, was still being hit by rough market conditions, “including elevated domestic capacity and continued weak demand for domestic leisure travel.” Later that month, the airline filed for bankruptcy protection for a second time and has been cutting costs ever since. At the time of its filing, Spirit listed debt of $8 billion and assets of $8.56 billion.
“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future,” Spirit president and CEO Dave Davis said at the time.
Davis later said in an internal memo that Spirit would cut its flight capacity by 25% in November.
An uncertain future
As Spirit faces an uncertain future, travelers will have to contend with fewer flight options from Spirit and possibly steeper prices from rival airlines.
Last week, Spirit announced the “difficult decision” to end service at airports in four major cities — Milwaukee, Phoenix, New York’s Rochester, and Missouri’s St. Louis — on January 8.
Spirit also said it would discontinue seasonal service at Bucaramanga, Colombia, effective January 13.
“As part of our efforts to better position the airline for the future, we have adjusted our 2026 schedule to better align with our smaller operating fleet and focus on our strongest performing markets,” Spirit said, adding that it will “reach out to those with affected travel plans to notify them of their options, including a refund.”
Spirit has ended service in more than a dozen other US cities, including Oakland, California, Portland, Oregon, and Salt Lake City, since last month. Additionally, the airline said it will stop service at Minneapolis-St. Paul International Airport on December 1.
Analysts have said that less competition may give competing airlines like Frontier, JetBlue, and Southwest room to bump up ticket prices.
“The biggest benefits to industry pricing from further pullback or exit by Spirit would be in routes where both Spirit and Frontier compete,” Savanthi Syth, a senior research associate at Raymond James, has said.
Meanwhile, Spirit’s financial strain does not seem to be letting up.
On Monday, Spirit’s parent company again warned in an SEC filing that there is “substantial doubt about the Company’s ability to continue as a going concern.”
“After considering the measures taken, minimum liquidity covenants in the Company’s current debt obligations and cash flows to maintain current operational obligations require financial results to improve at a rate faster than what the Company is currently anticipating,” the company wrote.
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