Spirit Airlines Files Chapter 11 Again to Cut Debt

Spirit Airlines filed for bankruptcy protection under Chapter 11 for the second time in less than a year, citing ongoing financial difficulties despite a prior restructuring effort. The Florida-based carrier said the process will allow it to continue operations while addressing liquidity challenges, reducing debt, and evaluating potential asset sales.

“Spirit has taken a proactive step to build a stronger foundation and a more sustainable future for our company. Chapter 11 is a court-supervised legal process that allows companies to restructure while continuing operations,” the airline stated.

The filing was submitted in bankruptcy court in the Southern District of New York after the company warned in August that, without additional cash, it might be unable to operate within 12 months. Spirit had already drawn the full US$275 million available from its revolving credit line, prompting Moody’s to downgrade its credit rating.

“Since emerging from our previous restructuring, which focused solely on reducing Spirit’s funded debt and raising equity capital, it has become clear that more work remains and additional tools are available to best position Spirit for the future,” said Dave Davis, CEO, Spirit Airlines.

The company’s financial performance has deteriorated sharply. For the quarter ending in June, Spirit reported a net loss of US$246 million. Total operating expenses reached US$1.2 billion, equivalent to 118% of quarterly revenue. Analysts noted that the carrier’s failure to significantly cut costs during its first bankruptcy left it exposed to continued losses.

As part of its restructuring efforts, Spirit also suspended 500 pilots for the fall and is selling 23 Airbus A320 and A321 aircraft to generate cash and reduce debt. The airline is engaged in a dispute with lessor AerCap Holdings over 36 Airbus planes scheduled for delivery between 2027 and 2028.

The restructuring plan includes reducing the company’s market presence and shrinking its fleet to cut lease obligations and debt, which Spirit estimates will yield hundreds of millions of dollars in annual savings. The airline emphasized that flights, ticket sales, reservations, and loyalty points will remain valid, and that wages, benefits, and vendor contracts will continue to be honored.