Spirit Airlines has once again filed for bankruptcy protection, entering Chapter 11 proceedings with the US Bankruptcy Court for the Southern District of New York, the company said on August 29, 2025.
"Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit's funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future," said Spirit CEO and president Dave Davis.
“Spirit intends to use the Chapter 11 process to implement the broad changes necessary to transition the company for a sustainable future and position it to deliver the best value in the sky for years to come,” the airline said in a statement.
Davis continued: “After thoroughly evaluating our options and considering recent events and the market pressures facing our industry, our board of directors decided that a court-supervised process is the best path forward to make the changes needed to ensure our long-term success.”
This follows the airline completing its pre-arranged Chapter 11 proceedings in March this year, moving ahead with its premium rebrand. However, liquidity pressures amid economic uncertainties and softening domestic demand had weighed on Spirit's performance. The airline flagged a “going concern” in its second quarter earnings report, which also revealed a net loss of $245.8 million in the second quarter, or $7.24 loss per share, widening from its $192.9 million net loss, or $1.76 loss per share, pre-restructuring last year.
The airline said it has been “actively engaged” with some of its largest lessors, secured noteholders, and key stakeholders over past few months as it “works to refine its path forward”.
Spirit continued: “The Chapter 11 process will provide Spirit the tools, time, and flexibility to continue ongoing discussions with all of its lessors, financial creditors, and other parties to implement a financial and operational transformation of the company.”
In regards to potential future financing, Spirit said it is also working “productively” with its secured noteholders.
Through the process, the airline said it expects to “double down” on redesigning its network, focussing on key networks and cities, as well as reducing capacity in certain markets; optimising its fleet, which will “significantly lower” its debt and lease obligations; pursue further cost efficiencies across its business; and expand further on its premium offerings.
According to a report from Bloomberg, Spirit chairman Robert Milton met with Frontier chairman Bill Franke last week. The report cited people familiar with the matter. The talks had reportedly focussed on Spirit's restructuring and rebranding efforts, as well as the current US airline environment. The report said there were no talks surrounding an acquisition of Spirit.
Prior to its emergence from restructuring from Chapter 11 earlier this year, Spirit had rejected a third merger offer from competitor Frontier Airlines.
Spirit had faced significant challenges last year following its failed merger with JetBlue after the US Department of Justice (DOJ) blocked the move, before both airlines agreed to cancel the deal. Later in the year, Spirit and Frontier had a back and forth over a potential merger, with Frontier believing the airline to have over-estimated its value before Spirit ultimately deciding to independently proceed with its premium rebrand plan.
In an open letter to guests, Spirit said its flights will operate flights as normal, as well as continue to use credits and loyalty points.
The airline will be delisted from the New York Stock Exchange (NYSE) soon, with it expecting its common stock to continue to trade in the over-the-counter marketplace through the Chapter 11 process. The shares are expected to be cancelled and have no value as part of its restructuring.
Davis Polk & Wardwell are acting as legal counsel for Spirit, with Debevoise & Plimpton as fleet counsel, FTI Consulting as restructuring, fleet and communications advisor and PJT Partners as investment banker.