No, you’re not experiencing déjà vu – Spirit Airlines has filed for bankruptcy again, its second time in less than 12 months. After emerging from bankruptcy in March of this year, Spirit failed to make any traction with its cost-cutting initiatives and filed for bankruptcy protection again in August.
Two bankruptcies in less than a year are naturally the result of a combination of headwinds as Spirit faces significant hurdles on its path to restoration. Not only are wealthier airline companies eating into ultra-low-cost carrier (ULCC) fares, but Spirit's internal picture is riddled with debt issues, its inability to handle rising labor costs, and the aftermath of two failed mergers with JetBlue and Frontier.
The airline industry is notoriously cutthroat, and competitors are already lining up to vulture some of Spirit's former clients and routes.
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Frontier Group Holdings Inc.
The most obvious beneficiary of Spirit’s struggles is Frontier Group Holdings (NASDAQ:ULCC), the other major ULCC serving customers in the U.S. Frontier attempted to acquire Spirit in 2022 before its first bankruptcy filing, but a competing (and superior) offer from JetBlue set off a bidding war. After the Department of Justice won a court case blocking a JetBlue-Spirit merger in 2024, Spirit once again engaged in merger and acquisition (M&A) talks with Frontier. Still, the terms couldn't be agreed upon, and the company turned to bankruptcy protection. Frontier is in a prime position to add new customers before Spirit, as analysts at Deutsche Bank estimate their client bases to have a heavily overlapping segment at 35%.
Frontier plans to grab market share from its bankrupt competitor by adding 20 new routes, including flights to Spirit’s strongholds like Houston, Ft Lauderdale, Baltimore, and Detroit. Deutsche Bank upgraded the stock from Hold to Buy earlier this month, and the stock surged more than 15% in a single day, marking its second double-digit daily increase in the last 30 days. The stock chart is also showing an attempt to break out; the share price has moved above the 200-day and 50-day simple moving averages (SMAs) following a long period of range-bound trading, and the Relative Strength Index (RSI) suggests that more upward momentum is brewing beneath the surface.
United Airlines Holdings Inc.
United Airlines (NYSE:UAL), one of the Big 3 airlines in the U.S., is usually not seen as a competitor to the low-cost carriers thanks to its heavier reliance on business travel and destination city routes. But, like any aggressive business, United isn't letting the troubles of an industry peer go to waste. In fact, United senior VP Patrick Quayle said as much when announcing new flights into 15 different cities where Spirit had been flying, including new routes to Orlando and Las Vegas. UAL will also begin launching high-capacity planes from its Chicago hub to New York City’s LaGuardia to help customers reach new destinations via connecting flights.
UAL shares are up more than 10% year-to-date (YTD), but have gained more than 20% in the last month alone following news of Spirit's impending second bankruptcy. The daily chart confirms this bullish momentum as a Golden Cross materialized in August; the stock now trades safely above its 50-day and 200-day SMAs. The RSI is also trending upward, but remains under the overbought threshold of 70, indicating that this rally has some gas left in the tank.
JetBlue Airways Corp.
JetBlue (NASDAQ:JBLU) is the $1.8 billion market cap airliner that came over the top of Frontier's offer for Spirit, and originally had a deal in place before regulators nixed it. Despite this setback, JetBlue might be able to capitalize on Spirit's absence thanks to its overlapping routes and recent earnings success. JetBlue posted an impressive earnings beat on both EPS and revenue during its Q2 2025 report released on July 29. The EPS figure was especially notable; analysts were expecting a loss of 32 cents per share, but that loss was narrowed to 16 cents per share in the release. The $2.36 billion in quarterly revenue also beat expectations by more than 3%.
The stock chart also confirms the market sees JBLU shares as a winner in the post-Spirit world. Shares spiked more than 20% in the two sessions following the bankruptcy news, driving the stock above the supporting trendline it had been tracking since the tariff pause in April. Similar upward momentum can be found on the RSI, and the stock could finally be ready to regain some of the footing it has lost in 2025 (down more than 35% YTD).
Alaska Air Group Inc.
Alaska Air Group (NASDAQ:ALK) might seem like an odd choice to thrive in Spirit's absence since it currently has no plans to expand route coverage into underserved markets. It also has a Price-to-Earnings (P/E) ratio of 25.5, putting it in the upper echelon of valuations among publicly-traded passenger airlines. So why will Alaska benefit from Spirit's potential demise? Its new loyalty rewards program offers cash-strapped customers a flexible way to earn points, such as miles traveled, cash spent, or segments flown. This new loyalty program (which can be used on Alaska Air or Hawaiian Air routes) could fill the void left by Spirit's Free Spirit loyalty program. Strong earnings don't hurt either; Alaska Air Group posted an EPS beat of nearly 15% and record revenue of $3.7 billion in its July 23 report.
ALK shares faced stiff resistance at the 200-day SMA between May and August, trading in a tight range before finally breaking through this level after the Spirit announcement was released to the press. The stock is continuing to gain upward momentum on the news, which is confirmed by the bullish MACD cross on the lower chart. The next catalyst is the company's Q3 2025 earnings report, which is scheduled for release on October 30.
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