Budget carrier Spirit Airlines filed for a new Chapter 11 bankruptcy protection on Friday, shortly after emerging from a previous Chapter 11 reorganization in March. The carrier has been struggling with its operations ever since it emerged out of its first bankruptcy.
The company has been attempting to rebrand as a higher cost airline to keep pace with trends that challenged the feasibility of its low-cost model. However, the airline’s recovery has been affected by uncertainty from President Donald Trump’s tariffs and budget cuts. The airline now carries $2.4 billion in long-term debt, most due in 2030, and reported a negative free cash flow of $1 billion at the end of the second quarter.
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CEO Dave Davis said the airline’s previous Chapter 11 petition focused on reducing debt and raising capital, and since exiting that process in March, “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.” Meanwhile, flight attendants have been warned by union leaders to “prepare for all possible scenarios.”
“We are being direct because even as we have many ways to fight because of our union, we also want to get you the truth about the situation at our airline and how each of us can take actions to protect and prepare ourselves for any challenge,” the Association of Flight Attendants said on Friday in a letter to its members.
The airline, however, said it plans to keep on flying. “Virtually every major U.S. airline has used these tools to improve their businesses and position them for long-term success,” Spirit posted on its Instagram account on Friday.
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Spirit airlines with its bright yellow planes, is known for its low costs as well as its bare-bones service. Over the years, the company faced competition from larger airlines like American and United, which also rolled out basic fares, while providing more perks on board. Travelers post pandemic have also been seeking pricier and more spacious seats on board, as well as more international travel. While Spirit has tried to rebrand, competitors still have an advantage due to larger networks and brand loyalty.
Another competitor, JetBlue previously tried to take over Spirit. The Justice Department sued to stop this merger, arguing that the deal was anti-competitive, and could hurt consumers. Spirit also faces competition from Frontier Airlines, which has repeatedly tried and failed to merge with Spirit since 2020. On Tuesday, Frontier announced 20 new routes that compete with Spirit.