Spirit Airlines: A Second Bankruptcy Filing in Under a Year
Spirit Airlines, a major U.S. carrier, filed for Chapter 11 bankruptcy protection for the second time in less than a year on August 29, 2025. This marks an unprecedented rapid return to court protection. The Dania Beach, Florida-based ultra-low-cost airline had emerged from its previous bankruptcy just five months prior, in March 2025.
The airline reported losses of $257 million between March and June 2025. This was a stark contrast to the $252 million profit it had projected in court filings during its first bankruptcy. CEO Dave Davis acknowledged that the initial restructuring, which focused solely on debt reduction, was insufficient to address the carrier’s fundamental challenges.
“Since emerging from our previous restructuring, it has become clear that there is much more work to be done,” Davis said in a statement.
The company is grappling with a variety of pressures, including:
- Weak domestic leisure travel demand
- Engine reliability issues affecting its Pratt & Whitney-powered fleet
- Aggressive competition from major airlines offering their own budget options
Despite these challenges, Spirit plans to continue normal operations during the restructuring process. Flights will operate as scheduled, and passengers will be able to book tickets and use loyalty points. The airline will use the bankruptcy process to redesign its route network, optimize its fleet size, and address cost structures. This comes at a time when competitors like Frontier Airlines are aggressively targeting its market share.
Source: CNBC