Spirit Airlines Files for Bankruptcy Again, Just Months After Emerging From the Last One

Spirit Airlines is once again entering Chapter 11 bankruptcy protection, less than 6 months after it emerged from its last restructuring. The move underscores the depth of the airline’s financial struggles and raises pressing questions about the viability of Spirit as an independent carrier in the United States.

We’ve seen hints of Spirit’s struggles in the past few weeks, and it looks like the first bankruptcy didn’t provide the solutions the airline needed for future section.

What does this mean for the future of Spirit Airlines and its travelers? Let’s take a look.

The First Bankruptcy: A Missed Opportunity

In November 2024, Spirit filed for Chapter 11 bankruptcy with the goal of cleaning up its balance sheet. The airline had been bleeding cash for years, posting some of the worst margins in the industry. But the company’s approach during that round of restructuring was narrowly focused. Spirit primarily worked to reduce funded debt and raise equity capital, emerging from bankruptcy in March 2025.

What Spirit did not address was its core problem: persistent operating losses. Even after clearing debt, the airline was still flying with negative margins (meaning it was spending more money than it was making on most of its operations), burning cash quarter after quarter. By the second quarter of 2025, Spirit posted a staggering $246 million loss — a devastating blow after previously projecting a $252 million profit for the year. In hindsight, the first bankruptcy was a half measure, leaving structural issues untouched.

Spirit Airlines’ Second Bankruptcy: A More Comprehensive Reset

On August 29, 2025, Spirit announced it was voluntarily filing for Chapter 11 again, this time with promises of a more sweeping overhaul. According to the airline’s CEO, the restructuring will give Spirit the tools and flexibility to finally address its underlying problems.

“Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit’s funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future. After thoroughly evaluating our options and considering recent events and the market pressures facing our industry, our Board of Directors decided that a court-supervised process is the best path forward to make the changes needed to ensure our long-term success. We have evaluated every corner of our business and are proceeding with a comprehensive approach in which we will be far more strategic about our fleet, markets and opportunities in order to best serve our Guests, Team Members and other stakeholders.”

-Dave Davis, president and chief executive officer at Spirit Airlines

The airline has outlined a multifaceted strategy: redesigning its network to concentrate on key markets, rightsizing its fleet to cut debt and leasing costs, reinforcing its low-cost model by driving new efficiencies, and expanding its product offerings under 3 distinct categories (Spirit First, Premium Economy, and Value).

Shareholders, however, are not expected to fare well. Spirit stock (ticker FLYY) has already collapsed to near-penny levels, and management has warned that shares will likely be cancelled during the restructuring. The company also expects to be delisted from the NYSE American exchange in the near term.

This news isn’t a shock, as we saw warnings that Spirit didn’t have enough cash to survive the next 12 months and the hiring of financial advisors to help the carrier figure out its next steps.

What This Means for Passengers

For passengers, Spirit is emphasizing that it’s business as usual. Flights will continue operating, tickets and credits remain valid, and the Free Spirit loyalty program is still intact. Wages and benefits for employees are also expected to continue during the restructuring, with vendors being paid for new services provided after the filing date.

That said, the longer-term implications for travelers could be significant. Spirit’s focus on “rightsizing” its fleet and network almost certainly means fewer routes, especially in marginal or highly competitive markets. Fares may rise as capacity shrinks, and some customers could see reduced options for ultra-low-cost travel. Competitors such as Frontier and JetBlue may benefit, whether through stronger competitive positioning or through acquiring Spirit’s assets down the line.

We’ve already seen Frontier respond to Spirit’s troubles by adding numerous routes that edge into Spirit’s turf.

Final Thoughts

Spirit’s second bankruptcy in less than a year is a stark reminder that fixing debt doesn’t matter if the business itself remains unprofitable. This time, management is at least acknowledging the need to tackle costs and strategy head-on. But the hurdles are steep. The U.S. airline market is unforgiving, and Spirit’s low-cost model becomes harder to sustain as the company shrinks.

For now, Spirit insists it will continue operating as usual, but few expect the airline to emerge unchanged. Whether this ends with a leaner, more competitive Spirit, or with a merger or liquidation, remains to be seen. What is clear is that this restructuring is make-or-break, and Spirit is running out of second chances.