Spirit Airlines is officially back in bankruptcy. After having come out of a restructuring in March, the low-cost airline most loved by Americans has just filed again under Chapter 11… And now it does not look good at all.
What was once the favorite airline of travelers (and not because of the yellow color of its planes) is going through the most complicated moment in its history with more than 10 billion in debt, a fleet that is too large and a business model that does not match the reality of the sector… What is happening to Spirit Airlines?
Low cost stopped working
The decline began in 2020, as it did for many in the sector. The pandemic wreaked havoc, but Spirit never managed to recover. Its idea of selling super cheap tickets and then charging for everything else worked in good times, but fell short when the big airlines decided to also join the low-fare game, but with more comforts and paying less…
In its first bankruptcy, Spirit managed to restructure 1.6 billion in debt. Its plan to get out of the hole involved a merger with JetBlue, but the operation was blocked by the government in 2024. Without that union, Spirit was left trapped alone in a market where every seat sold meant losing money.
Too many planes, little demand
Another serious problem: they have a huge fleet that they can no longer maintain. According to Bloomberg, they could cancel up to 150 lease contracts during this second bankruptcy. And there is the dilemma, because if they keep selling cheap tickets, the numbers do not add up, but if they raise prices, they stop being Spirit.
On top of that, tariffs on Airbus do not help (they are manufactured in Europe, which is why they have tariffs). And every extra expense is pushing the company further toward collapse.
Merger as a lifeline?
The name of Frontier Airlines is being heard again. They already tried to buy Spirit in the past, but their offer fell short. Now, with Spirit unable to be picky because they are in bankruptcy, maybe it is the only way to survive.
A union between two low cost would allow cutting duplicate routes, adjusting the size of the fleet and standing up to the big ones (Delta, American, United…). But no one has made a move yet.
It is not the end… yet
That Spirit files for bankruptcy does not mean it will close tomorrow. Chapter 11 is a legal tool designed to reorganize debts without stopping operations. In fact, other companies like American Airlines have already gone through this and come out stronger from the process.
The difference is that Spirit has a model that seems to have run out of space. Let’s be honest, if you buy a cheap ticket, you don’t want to spend more to choose a seat, to carry a bag, or to print the boarding pass, if other companies have similar prices with fewer “money grabs” obviously users are going to go with other companies.
And what about the flights?
For now, flights continue. But you have to be attentive. It is likely that routes will be canceled, frequencies reduced and some conditions changed. Check carefully that your flight is not one of those canceled right before boarding.
What is left for Spirit?
The big question is whether they will manage to reinvent themselves a second time or if they will end up absorbed by a competitor… Spirit tried, it put cheap flights within reach of many wallets, it built its own image with those flashy planes, but what was once a revolution today seems more of an obstacle than a convenience. The market has changed. Now it remains to be seen if they can also change or if it will be their last call at the boarding gate.