Earlier this week Spirit Airlines announced in a regulatory filing that there is “substantial doubt” that the company can keep operating for the next year. It’s no secret that the airline has been in a precarious financial position but Spirit’s CEO sent a memo to employees attempting to downplay the issues, stating that the company is “changing.”
Spirit CEO Confident the Airline Will Operate “For Many Years to Come”
On August 11, 2025, Spirit Aviation Holdings, Inc., the parent company of Spirit Airlines, filed its 10Q report for the second quarter of 2025. This report, filed with the Securities and Exchange Commission (SEC), indicated that “there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued.”
A financial update with that sort of verbiage is certain to generate some responses and the news soon spread like wildfire throughout travel and mainstream news outlets. It received so much publicity that Spirit Airlines President and CEO Dave Davis sent a memo to employees attempting to downplay its current financial woes. The full text of the memo is below.
Yesterday, we filed our 10-Q, outlining our second quarter 2025 financial results. This filing generated media coverage and, naturally, a lot of questions.
Let me start by providing some context around what’s included in the report. The report uses the phrase “substantial doubt about the Company’s ability to continue as a going concern.” This is a phrase required by our outside auditors to convey that there is risk if we do not make changes. But, we are.
Since my arrival at the airline, the Senior Leadership Team and I have developed a plan that leans into Spirit’s strengths, while moving away from the elements of the business that no longer work. That includes strategically growing our network in stronger markets with more opportunities and making some difficult decisions like re-evaluating unprofitable routes. It also includes improvements to our revenue management system and the way we sell our products. By doing so, the team and I are confident that we can build a Spirit that will continue to provide consumers the unmatched value that they have come to expect for many years to come.
Spirit is a critical part of the U.S. aviation industry. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. We remain hard at work on many initiatives to protect our unique franchise, our valued Team Members, our business partners and our Guests who place their trust in us every day.
We appreciate your commitment and professionalism during thus challenging house and, with your help, we will transform and protect thus critical business.
Every safe flight, every on-time departure, and every Guest taken care of builds our credibility and stability.
I’ll have more to share about our commercial changes in my next fireside chat in the coming weeks.
The primary issue facing Spirit is cash. The current financial situation of the airline has put into question the carrier’s ability to meet its minimum liquidity covenants under its credit card processing agreement and debt obligations.
Spirit is currently in negotiations with its credit card processor to renew its processing agreement, which currently expires on December 31, 2025. The airline would need to provide further collateral in order to get the agreement completed which could result us a “material reduction of unrestricted cash.”
Changes are Coming at Spirit
One thing that appears to be certain from that memo is that more changes are coming at the airline. It has already undergone multiple rounds of pilot furloughs, entered and exited Chapter 11 Bankruptcy, turned down multiple merger offers, and announced some odd partnerships.
Honestly, I’m not sure what to expect from the airline during this round of changes and I’m also not sure how much is left to change. However it sounds like we’ll have a better idea of that in the coming weeks.
Personally, I feel that Spirit has a branding problem. Prior to the pandemic, passengers were flocking to ultra-low-cost carriers (ULCCs) like Spirit but, the travel industry has seen a noticeable shift towards more premium offerings.
While Spirit has also tried to become more premium, it is still the first thing your mind jumps to when you think ULCC. The airline even went so far as to paint “Home of the Bare Fare” on the sides of some of its aircraft engines.
A social media post that has made the rounds in recent years highlights airline slogans “if they were honest” and, when yours is Our planes are painted yellow to remind you we’re the public bus of the sky, that is going to be a tough image to shake.
Summary
A day after Spirit reported its 2Q financials which stated there is “substantial doubt” regarding its ability to continue operations, its CEO sent a memo to employees downplaying the company’s financial woes. While more changes have been promised, I don’t see how this ultimately returns the airline to profitability.