Spirit Airlines Files for Second Bankruptcy Amid Deepening Financial Crisis
Spirit Airlines Files for Second Bankruptcy Amid Deepening Financial Crisis
Spirit Airlines has announced its second filing for Chapter 11 bankruptcy protection in less than a year, signaling persistent financial distress despite an earlier reorganization. The budget carrier, known for its distinctive yellow planes, stated on Friday that it plans to maintain normal flight operations throughout the restructuring process, assuring passengers that existing bookings, credits, and loyalty points remain valid. Employees and contractors are also expected to continue receiving payments.
CEO Dave Davis acknowledged that while the previous Chapter 11 petition, from which the airline emerged in March, aimed to reduce debt and raise capital, it became clear “there is much more work to be done.” The airline has faced a challenging environment since the COVID-19 pandemic, struggling with rising operational costs and substantial debt, which currently stands at $2.4 billion.
The news follows a quarterly report earlier this month where parent company Spirit Aviation Holdings expressed “substantial doubt” about its ability to continue operations over the next year, citing “adverse market conditions” and poor demand for domestic leisure travel. Union leaders have warned flight attendants to “prepare for all possible scenarios,” reflecting the uncertainty surrounding the airline’s future.
Spirit’s ongoing cost-cutting measures include plans to furlough approximately 270 pilots and downgrade 140 captains, effective October 1 and November 1, tied to anticipated flight volumes for 2026. The airline is also exploring the sale of certain aircraft and real estate to generate much-needed cash, after previous buyout attempts by rivals like JetBlue and Frontier proved unsuccessful.
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