BY Richard Summerfield
Spirit Airlines expects to emerge from Chapter 11 bankruptcy in late spring or early summer after reaching an agreement in principle with its existing debtor‑in‑possession lenders and secured noteholders. According to a company statement, this agreement will provide the financial support required to complete its restructuring and finalise changes intended to optimise its fleet, network and cost base. Spirit aims to return to the market as a strengthened low‑cost carrier offering both basic and premium options at the lowest possible fares.
Following its second bankruptcy filing in a year, the airline intends to reshape its business by expanding premium seating and focusing on routes with consistently strong demand. Under the restructuring plan, Spirit estimates that its debt and lease obligations will fall from $7.4bn to $2.1bn dollars. Spirit’s lawyer, Marshall Huebner of Davis Polk, confirmed that secured lenders will also release cash collateral to provide additional liquidity. The company entered bankruptcy again in August after experiencing falling cash reserves and ongoing losses.
“This agreement in principle is the result of months of hard work and allows Spirit to move toward completing its transformation,” said Dave Davis, president and chief executive of Spirit. “Spirit will emerge as a strong, leaner competitor that is positioned to profitably deliver the value American consumers expect at a price they want to pay.
“I am grateful to our Team Members for their dedication and unwavering commitment to our Guests throughout our restructuring. I also want to thank our Guests for continuing to choose Spirit to connect them to the people and places that matter most,” he added.
As part of its recovery, Spirit will reconfigure its schedule to increase aircraft utilisation during peak periods and on consistently popular routes, while reducing activity during times of lower demand. The carrier also plans to expand Spirit First and premium economy offerings and make improvements to its loyalty programme. Much of the future fleet will consist of older Airbus aircraft. Mr Huebner stated that annual fleet costs are expected to fall by $550m, a reduction of around 65 percent compared with levels before last year’s bankruptcy filing. The airline’s debtors are also pursuing a further $300m in non‑fleet cost savings.
To contain expenses during restructuring, Spirit has already reduced the size of its Airbus fleet and furloughed pilots and flight attendants, some of whom have since been recalled. The airline has faced persistent financial pressure as a result of a major Pratt & Whitney engine recall and the collapse of a planned acquisition by JetBlue Airways, which was blocked by a federal judge in early 2024.
Although Spirit forecast a net profit of $252m for 2025 in a December 2024 court filing, it reported losses of nearly $257m between 13 March 2025, when it exited its first Chapter 11 process, and the end of June. The company filed for bankruptcy protection for a second time shortly afterwards.
News: Spirit seals deal with lenders to emerge from bankruptcy as smaller airline