Spirit Airlines Files for Chapter 11 Bankruptcy Again Amid Financial Struggles
Spirit Airlines has officially filed for Chapter 11 bankruptcy protection for the second time in less than a year, as announced on August 29, 2025. The decision follows ongoing financial pressures driven by high operating costs and weaker-than-expected domestic travel demand, which continued even after the airline completed its previous restructuring in March.
The ultra-low-cost carrier said it is pursuing another restructuring process after its earlier Chapter 11 filing failed to secure long-term stability. Spirit has retained PJT Partners, FTI Consulting, and Seabury Airline Strategy Group to evaluate strategic alternatives, including potential financial restructuring and operational changes, according to reports from The Wall Street Journal.
Despite the bankruptcy filing, Spirit Airlines says flights, bookings, and loyalty programs will continue as normal. The company has filed motions with the U.S. Bankruptcy Court to ensure operations remain uninterrupted, including honoring tickets, credits, and employee wages.
The move comes as Spirit works to stabilize its finances following a $275 million revolving credit facility secured to avoid a liquidity crunch. Arranged with lenders led by Citibank and Wilmington Trust, the loan matures in September 2026 and will be used for general corporate purposes. Spirit has also extended its agreement with U.S. Bank National Association to process credit card payments through December 2027, though the revised deal requires additional collateral and allows daily holdbacks of up to $3 million.
Despite these efforts, the airline continues to struggle. It recently furloughed 270 pilots, downgraded 140 captains, and is considering raising cash through the sale of aircraft, real estate, or excess gate space. Market conditions, including oversupply in domestic capacity and weakening leisure demand, have further pressured operations.
Financial forecasts remain bleak. Moody’s projects Spirit could burn through more than $500 million in cash this year, potentially breaching liquidity covenants by year-end and triggering defaults. The airline, which operates a fleet of more than 200 Airbus aircraft, acknowledged it is making “necessary changes” to strengthen the business but declined to comment on restructuring speculation.
Spirit’s future will hinge on whether these measures are enough to stabilize operations amid ongoing industry headwinds.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com