Spirit Airlines warned Monday that despite emerging from bankruptcy and pursuing new revenue streams, it may not be able to stay in business over the next year.
Just five months after emerging from Chapter 11 bankruptcy, its parent company, Spirit Aviation Holdings, says there is "substantial doubt" about the airline’s ability to continue operating over the next year, according to its quarterly report published Monday.
Despite efforts to restructure debt and secure new financing following its exit from bankruptcy in March, the airline faces continued challenges.
Weak demand for domestic leisure travel and enduring operational uncertainties are among the critical pressures prompting the warning.
By early Tuesday afternoon, Spirit’s stock had plunged nearly 40 percent, trading at just above $2.20. The airline said it expects to continue “for at least the remainder of 2025.”
Famous for its no-frills, ultra-low-cost flights aboard bright yellow jets, Spirit has faced ongoing challenges regaining its footing and staying competitive since the COVID-19 pandemic. Escalating operating expenses and growing debt pushed the carrier to file for bankruptcy protection in November 2024, after racking up more than $2.5 billion in losses since early 2020.
Spirit became the first major US airline to file for Chapter 11 bankruptcy since American Airlines did so in 2011.
Spirit has implemented cost-saving measures, including furloughing 270 pilots and demoting 140 captains, with changes scheduled for October 1 and November 1 to align with anticipated flight volumes in 2026. The airline also plans to sell aircraft and real estate to generate much-needed cash.
Spirit is also shifting strategy and rolling out tiered pricing with added amenities, aiming to appeal to higher-paying travelers and diversify beyond its traditional ultra-low-fare base.
Previous talks of mergers or takeovers, by JetBlue or Frontier, have stalled, and Spirit has signaled no renewed interest in such moves since restructuring.
