Spirit Airlines is in a dire financial situation after filing for Chapter 11 Bankruptcy for the second time in under a year. The airline didn’t make any meaningful changes during the first bankruptcy, rejecting multiple merger offers by Frontier, and elected to be taken private.
The company ended up being relisted on the NYSE American but hasn’t been able to turn itself around. This is bad news for employees as the ultra-low-cost carrier (ULCC) is attempting to shrink its way to profitability. As far as I’m concerned, I don’t see the carrier existing in its current form at this time next year.
Spirit is Furloughing 1,800 Flight Attendants
In the next month, Spirit is planning to cut capacity by roughly 25% in an effort to shrink its way to profitability (doubtful). The carrier will also suspend service to multiple airports as part of the reduction.
Less flying means that fewer staff are needed in order to operate the remaining routes and the airline has announced that it will furlough around 1,800 flight attendants as of December 1, 2025. This represents roughly a third of the airline’s cabin crew. While no official announcement has been made, one would expect a similar number of pilot furloughs to accompany the service reduction.
While I understand why the furloughs and capacity cuts are necessary, the airline has been hemorrhaging cash, its unfortunate for the crews. You certainly feel for them as they are in this position through no fault of their own. The blocked merger between JetBlue and Spirit set the ULCC on this path and repeated rejections of mergers by fellow ULCC Frontier have gotten us to this point.
With the busy summer travel season coming to an end, we’re headed into a part of the year that is typically slow for air travel. If Spirit was struggling financially this summer, things will only get worse as we move towards the colder months.
Spirit is Trying to Shrink its Way to Profitability
Prior to the Covid-19 pandemic, many airlines in the United States were engaged in a race to the bottom in terms of amenities and passenger comfort. ULCCs were grabbing market share and the big three U.S. carriers (America, Delta, and United) took notice. This led to the rise of Basic Economy offerings on those legacy carriers in order to better compete with ULCCs.
However, coming out of the pandemic, there has been a noticeable shift towards more premium travel preferences. Delta has long been considered the most premium of the three but United has made significant gains in recent years with the delivery of new airplanes, opening of new lounges, and improvements in the passenger experience.
Even American Airlines, where one executive famously claimed that “the schedule is the product”, has come around and has refocused on being a premium carrier, albeit later than United.
This has left many ULCCs in precarious financial situations, though none worse than Spirit. While the first bankruptcy was supposed to be a lifeline for the airline, getting hundreds of millions of dollars in funding, it has blown through those reserves and even had to issue a going concern as part of its financials.
Other airlines smell blood in the water and have been aggressively expanding on routes operated by Spirit. With more robust balance sheets they can endure some short term losses in order to push Spirit out of business. While its business model may be faltering, there would still be demand for the carrier’s assets like gates and aircraft.
Personally, I don’t see Spirit making it through another year in its current state. This is unfortunate but also a reflection of where the market has gone in recent years. With a brand so synonymous (somewhat unfairly) with cramped seats, delayed flights, and unruly passengers, it will be an uphill climb back to profitability.
Summary
Spirit Airlines has announced plans to cut capacity by roughly 25% and furlough one-third of its flight attendants. One would also expect to see pilot furloughs as part of this capacity reduction. The carrier is currently trying to shrink its way to profitability as it undergoes its second Chapter 11 Bankruptcy in the last year.
I flew Spirit yesterday to Miami and American home. In Spirit First, on a full A321, we departed 11 minutes early and would have arrived early if we didn’t have to sit nearly 15 minutes for a BA A380 to get out of the alleyway where our gate was located. Full normal service to entire plane. I managed to have my coffee refilled twice and was offered a cup with a lid to go. Snack basket passed 3 times.
Returning on AA B737-800, in First, pre-departure drink. In the air, no service on MIA-CLT. There was about a half hour where the crew stayed seated due to “expected turbulence” and then apparently the remaining hour was too “short” to do any service whatsoever even in F.
I feel a lot better about paying the full fare on Spirit than same fare for coach on AA (even with the free upgrade due to status).
I have only flown Spirit once (DFW-MSY) in GoBig and had a great experience. We had an hour delay waiting for pilots but the FA was fantastic, constantly checking on us to see what we needed. Definitely makes me consider flying with them again of the price and schedule are right.