Spirit Airlines files for bankruptcy again as cash dwindles
- Spirit Airlines filed for Chapter 11 bankruptcy on August 29, 2025, following a series of significant financial losses.
- The airline struggled to attract new customers despite efforts to shift towards a more flexible pricing model.
- The company's long-term viability remains in doubt as it continues facing financial difficulties and rejected merger proposals.
In the United States, Spirit Airlines has faced significant financial challenges, culminating in a second Chapter 11 bankruptcy filing on August 29, 2025, just six months after emerging from its first bankruptcy. The airline attributed its struggles to billions in pandemic-related losses and more than $1 billion in looming debt, which became unmanageable despite initial efforts to stabilize operations. Shortly after its initial bankruptcy declaration in November 2024, where Spirit cited heavy losses, the airline announced cuts, including job furloughs and selling aircraft. Although it emerged from bankruptcy in March 2025 with a sense of optimism backed by a $350 million investment, the company soon faced substantial losses again. Despite attempts to reposition itself as a customer-friendly airline through 'Project Bravo,' Spirit's newly introduced services including fare bundles with added perks did not attract the expected customer base. Customers remained loyal to competitors, leaving Spirit struggling to increase passenger numbers and revenue. As financial performance continued to decline, the company's management repeatedly warned of doubts about its future sustainability. By the end of the second quarter of 2025, Spirit reported a staggering loss of nearly $246 million. This came after a first-quarter loss of $143 million, leading to mounting concerns about its ability to operate effectively in the coming months. Reduction measures and asset sales had failed to rectify the company’s precarious financial standing, and merger proposals with JetBlue and Frontier were also rejected, eliminating potential lifelines for the struggling airline. As Spirit continues flights despite the financial strain, they have assured passengers that travel operations will remain normal and that wages and benefits for employees will be maintained. However, analysts express skepticism about Spirit's ability to maintain operations and overcome the challenges faced in the budget airline market, particularly given the competitive environment and the waning interest in its adjusted service offerings.