Spirit Airlines, the well-known ultra-low-cost carrier with its signature yellow planes, has filed for Chapter 11 bankruptcy protection once again. This marks the second time in less than a year that the airline has sought court protection, raising fresh concerns about its future.
Why Spirit Is Struggling
The airline had only recently exited bankruptcy in March 2025 after a major restructuring deal that swapped debt for equity and brought in new financing. Despite that reset, Spirit has been losing money faster than expected. In the latest quarter, the company reported a loss of about $246 million, with operating costs outpacing revenue by nearly 20%.
High debt, weaker demand for budget travel, and stiff competition from rivals like Frontier Airlines have all added to the pressure.
What the New Bankruptcy Means
According to the filing, Spirit listed assets and liabilities between $1 billion and $10 billion. The company said it plans to shrink its fleet and reduce routes in order to save hundreds of millions of dollars annually.
For passengers, Spirit insists it’s business as usual. Tickets can still be booked, loyalty rewards remain valid, and flights are expected to continue operating on schedule. Employees will also continue to be paid.
Cost Cutting Already Underway
To cut expenses, Spirit has already started making tough choices. The airline recently furloughed around 270 pilots, downgraded more than 100 captains, and offered voluntary leave options to flight attendants. It’s also looking to sell some aircraft and real estate, while downsizing certain airport leases to free up cash.
Competitors Moving In
Frontier Airlines, another low-cost rival, is already seizing the opportunity. It has added new routes that overlap with Spirit’s network, aiming to capture budget travelers who may be uncertain about Spirit’s long-term stability.
Can Spirit Survive This Time?
Financial reports show Spirit is carrying about $2.4 billion in long-term debt and has burned through nearly $1 billion in cash flow. The company itself has warned that without a major turnaround, survival over the next 12 months could be in doubt.
Still, Spirit remains confident that the new restructuring plan combined with a leaner operation will help it stay in the air.
