As first reported by The Wall Street Journal and highlighted by View From the Wing, Spirit Airlines is on the brink of declaring bankruptcy for the second time in less than a year.
Spirit Hires Advisors to Explore Second Bankruptcy
Five months after Spirit exited Chapter 11 bankruptcy, the ultra-low-cost carrier (ULCC) as engaged PJT Partners to help “explore strategic alternatives.” The airline has also engaged multiple consulting firms, including FTI and Seabury Airline Strategy Group, to assist in developing a path forward.
Spirit first declared bankruptcy in November 2024 and exited a short time later, in March 2025, after being taken private. In the months since, the carrier has experienced a number of financial issues.
Earlier this month the airline informed the Securities and Exchange Commission (SEC) that there was “substantial doubt” that the carrier could continue operations for another year. While the airline’s CEO tried to downplay these issues, it was clear that the airline was struggling.
Spirit has made multiple adjustments to its business, including overhauling its fare bundles in an effort to move towards a more premium product. The airline has also furloughed and downgraded pilots for a second time as it looks for ways to turn a profit. As the carrier continues to hemorrhage cash, I can’t see what the path forward is to continue operations.
A merger was its best bet but, after the proposed JetBlue merger was killed by the Department of Justice and multiple merger attempts from Frontier were rejected, I’m not sure who’s left. Ultimately, I believe the only remaining value in the airline lies in its assets and I wouldn’t be surprised to see Spirit parted out to the highest bidder.
Summary
For the second time in less than a year, Spirit Airlines finds itself on the brink of Chapter 11 Bankruptcy. The first restructuring hasn’t been enough to resurrect the embattled ULCC and I believe that the only path forward is to sell off parts of the carrier to the highest bidder.
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