Spirit Airlines Files for Second Bankruptcy in Less Than a Year

Spirit Airlines has filed for Chapter 11 bankruptcy protection for the second time in less than a year, the company announced on Friday. The ultra-low-cost carrier intends to maintain normal flight operations during the restructuring, assuring passengers that tickets, credits, and loyalty points remain valid. Employees and contractors will continue to receive their wages.

CEO Dave Davis stated that the previous Chapter 11 filing focused on debt reduction and capital raising. Since emerging from that process in March, he noted, "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."

The Association of Flight Attendants advised its members to "prepare for all possible scenarios," emphasizing the importance of being informed and proactive in light of the airline's current situation.

Spirit has faced significant financial difficulties since the COVID-19 pandemic, reporting losses exceeding $2.5 billion since 2020. The airline currently holds $2.4 billion in long-term debt, primarily due in 2030, and reported a negative free cash flow of $1 billion at the end of the second quarter.

In a recent quarterly report, Spirit's parent company expressed "substantial doubt" about the airline's ability to continue operations over the next year, citing adverse market conditions and uncertainties expected to persist through at least the end of 2025.

To address these challenges, Spirit has implemented cost-cutting measures, including plans to furlough approximately 270 pilots and downgrade about 140 captains to first officers in the coming months. The company is also considering selling certain aircraft and real estate assets to raise additional capital.

Despite these efforts, previous acquisition attempts by competitors such as JetBlue and Frontier Airlines have been unsuccessful. Spirit continues to operate flights to 88 destinations across the U.S., the Caribbean, Mexico, Central America, Panama, and Colombia.