Just a few months after coming out of Chapter 11 bankruptcy, Spirit Airlines is warning that it might struggle to keep running in the future. Spirit Aviation Holdings, the parent company of the budget airline, said it has “substantial doubt” about its ability to stay in business over the next year. This means the company isn’t sure it has enough money and resources to keep operating.
In a report released on Monday, Spirit said it continues to face “bad market conditions” despite trying to fix its problems and change its services. One big issue is weak demand for leisure travel inside the U.S., which stayed low during the second quarter of the year. The company expects these challenges and uncertainties to last through at least the end of 2025.
Spirit Airlines Provide Low-Cost Services
Spirit is known for its cheap, no-frills flights on bright yellow planes. Since the COVID-19 pandemic, the airline has had a hard time making profits and gaining enough money to compete with other airlines. Rising costs and increasing debt pushed Spirit to file for bankruptcy protection in November 2023. By then, the airline had lost more than $2.5 billion since 2020.
When Spirit came out of bankruptcy in March, it managed to reorganize some of its debt and got new funding to keep going. The airline has also been cutting costs by planning to furlough around 270 pilots and reduce some 140 captains to first officers later this year. These job cuts, announced in July, will start on October 1 and November 1 to match the company’s expected number of flights in 2026. Spirit had already made some job cuts before the bankruptcy filing.
Spirit Airlines Say It is Facing Cash Crunch
Even with these efforts to save money, Spirit says it still needs more cash. It might sell some airplanes and property to get more funds.
Spirit’s fleet is relatively new, which has made the airline an attractive buyout option in the past. However, takeovers by other budget airlines like JetBlue and Frontier failed before and during the bankruptcy process.
After the announcement, Spirit’s stock price dropped more than 40% on Tuesday morning, trading at just over $1.80 around 11 a.m.
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