Spirit Airlines has filed for Chapter 11 bankruptcy protection for the second time in less than a year, after efforts to stabilize its business fell short. The Florida-based low-cost carrier made the filing on Friday in New York, citing assets and liabilities between $1 billion and $10 billion, according to Bloomberg.
Following the bankruptcy news, Spirit's shares dropped 51% in post-market trading on Friday, falling to $0.60 as of 4:20 p.m. ET.
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Fleet cuts and network redesign ahead
According to CNBC, Spirit announced it will reduce its flight network and shrink its fleet, in an effort to cut annual costs by "hundreds of millions of dollars."
The company plans to:
- "Double down" on cost-cutting efforts
- Redesign its route network
- Scale back its presence in select markets
- Optimize fleet size to improve efficiency
In a news release, Spirit CEO Dave Davis said, “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.”
{{/usCountry}}In a news release, Spirit CEO Dave Davis said, “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.”
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Operations, bookings, and loyalty program unaffected
In a letter to customers, Spirit assured passengers that the bankruptcy filing will not affect daily operations, ticket validity, or its loyalty program.
According to Market Watch, the airline confirmed that:
- All tickets, credits, and loyalty points remain valid
- Wages and benefits for employees and contractors will continue uninterrupted
The airline also confirmed that Labor Day weekend flights will operate as scheduled.
Spirit Airlines previously filed for bankruptcy in November 2024 after years of financial losses, failed merger attempts, and rising debt.