Spirit Airlines Files for Second Chapter 11 Bankruptcy in Less Than a Year

Spirit Airlines has filed for Chapter 11 bankruptcy protection for the second time in less than a year, citing continued financial difficulties. The Florida-based budget carrier plans to reduce its network and shrink its fleet, aiming to cut costs by "hundreds of millions of dollars" annually.

CEO Dave Davis stated, "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."

Despite previous efforts to stabilize its finances, including a debt-for-equity exchange and avoiding more drastic cost-cutting measures, Spirit has faced challenges such as high operational costs, declining domestic travel demand, and competition from larger carriers.

The airline reported a net loss of nearly $257 million from March 13 through the end of June, following its exit from Chapter 11 earlier this year.

Spirit intends to continue flight operations and honor existing tickets, credits, and loyalty points during the restructuring process.

The airline has struggled with high operational costs, declining domestic travel demand, and competition from larger carriers adopting similar low-cost features.

Spirit's aircraft lessors have reportedly reached out to rival airlines to gauge interest in some of the carrier's planes.

Spirit is the United States' largest budget airline, followed closely by rival Frontier Airlines, which has attempted to merge with Spirit multiple times since 2022.