Spirit Airlines is warning that it may not survive the next year unless it can quickly raise more cash — just five months after emerging from bankruptcy protection.
The budget airline said in a report Monday that fewer people are booking leisure trips within the US and tough competition from other carriers is making it hard to hit the money targets it promised after bankruptcy.
The company cautioned that failure to secure additional funds could trigger loan defaults and force it to sell assets, including planes, airport gates and real estate.
The airline’s management said it faces “substantial doubt” about its ability to keep operating beyond the next 12 months without fresh capital, citing uncertainty over the success of cost-cutting efforts and ongoing talks with stakeholders.
Spirit also disclosed it may have to provide more collateral to its credit card processing partner to keep that relationship in place.
Spirit’s warning marks the latest setback in a turbulent period for the Florida-based airline, known for its bright yellow planes and low-cost fares.
It filed for Chapter 11 bankruptcy in November, becoming the first major US carrier to do so since 2011.
The filing followed years of mounting losses, a failed takeover bid by JetBlue Airways, shifting passenger preferences toward more premium services and a large-scale engine recall that left many of its jets grounded.
COVID-19’s lingering effects, supply chain disruptions and heavy debt loads added to the strain.
After rejecting a merger offer from Frontier Airlines in February, Spirit completed its Chapter 11 restructuring in March.
The plan wiped out roughly $795 million in debt, brought in $350 million in new equity and set up a $275 million credit line.
Then-CEO Ted Christie remained in place to lead a new strategy aimed at appealing to higher-spending travelers, revamping the frequent flyer program and boosting partnerships to increase revenue per passenger.
But the recovery has been rocky.
Christie, who was due to receive a $3.8 million retention bonus, stepped down as CEO in late April. He was replaced by Dave Davis, former president and chief financial officer of Sun Country Airlines.
Christie left the airline having received more than $4 million in bonuses as part of his 2024 compensation — plus a $1.5 million separation payment after leaving the company.
In June, Spirit reported a $143 million net loss for the first quarter of 2025, along with a warning that it still faced “going concern” risks.
By late July, the airline announced plans to furlough 270 pilots and reassign 140 others in a bid to conserve cash, even as it promoted new routes to Key West and the Cayman Islands starting later this year.
The company hoped that adding destinations could help drive bookings, but industry headwinds continued to mount.
In its latest earnings report, Spirit posted a second-quarter net loss of $245.8 million, widening from $192.9 million in the same period last year.
The company said elevated capacity in the domestic market — meaning more seats for sale than demand could absorb — has kept ticket prices under pressure.
Higher operating costs, combined with tariffs imposed earlier this year, have further eroded margins. These challenges have hit low-cost carriers like Spirit especially hard because they rely heavily on price-sensitive leisure travelers.
The airline’s troubles also reflect broader difficulties in the aviation industry. While some competitors have been able to offset weaker domestic demand with strong international traffic, Spirit’s business is still centered on short-haul leisure routes, leaving it more exposed when vacation travel slows.
Management said that without significant improvement in its finances or a major infusion of cash, it may not be able to comply with the minimum liquidity requirements in its credit agreements.
Spirit’s latest moves to shore up its finances include exploring the sale of non-core assets such as surplus planes, airport gates and slots.
However, the company acknowledged in its filing that there is no guarantee these efforts will succeed or be completed quickly enough to prevent further strain.
