Spirit Airlines Raises ‘Going-Concern’ Doubts Months After Exiting Bankruptcy
Spirit Airlines Raises ‘Going-Concern’ Doubts Months After Exiting Bankruptcy
Spirit Airlines is once again facing significant doubts about its ability to continue operations, just months after successfully exiting bankruptcy. The budget carrier, known for its distinctive yellow planes, issued a stark warning in its latest quarterly report on Monday, citing “going-concern doubts” amid a challenging market.
The airline attributes its precarious position to persistent weak domestic demand and an oversupply of seating capacity in the second quarter, leading to a highly competitive and difficult pricing environment. These pressures are expected to continue throughout the remainder of 2025, exacerbating operational uncertainties. In a move to conserve cash, Spirit had already announced last month that it would furlough approximately 270 pilots and demote another 140.
Spirit’s current struggles come after a tumultuous period; the airline filed for Chapter 11 bankruptcy protection in November 2024 following years of losses, failed merger attempts, and substantial debt. It emerged from restructuring in March 2025, becoming the first major U.S. carrier to file for Chapter 11 since 2011.
Adding to its woes, Spirit revealed that its credit-card processor has demanded additional funds as collateral, threatening to terminate its contract set to expire on December 31. To address the escalating concerns and bolster its liquidity, Spirit plans to sell or monetize aircraft and real estate, in addition to reducing excess airport gate capacity. The uncertainty surrounding its ability to meet minimum liquidity covenants and the outcome of ongoing stakeholder discussions have cast a substantial shadow over the airline’s viability for the next 12 months.
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