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Spirit Airlines declares bankruptcy for second time in less than a year

/ AP

Budget carrier Spirit Airlines said Friday that it has filed for bankruptcy protection only months after emerging from a Chapter 11 reorganization.

The no-frills airline said it intends to conduct business as normal during the restructuring process, meaning passengers can continue to book trips and use their tickets, credits and loyalty points. The company said its employees and contractors would still be paid.

Spirit 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."

In a quarterly report issued earlier this month, Spirit Aviation Holdings, the carrier's parent company, said it had "substantial doubt" about its ability to continue as a going concern over the next year — which is accounting-speak for running out of money. Spirit cited "adverse market conditions" the company faced after its most recent restructuring and other efforts to revive its business.

That included weak demand for domestic leisure travel, which Spirit said persisted in the second quarter of its fiscal year, and "uncertainties in its business operations" that the Florida company expects to continue "for at least the remainder of 2025."

Troubles since the pandemic

Known for its no-frills, low-cost flights on a fleet of bright yellow planes, Spirit has struggled to recover and compete since the COVID-19 pandemic. Rising operation costs and mounting debt eventually led the company to seek bankruptcy protection in November. By the time of that Chapter 11 filing, the airline had lost more than $2.5 billion since the start of 2020.

When Spirit emerged from bankruptcy protection in March, the company successfully restructured some of its debt obligations and secured new financing for future operations. Spirit has continued to make other cost-cutting efforts since — including plans to furlough about 270 pilots and downgrade some 140 captains to first officers in the coming months.

The furloughs and downgrades announced last month go into effect Oct. 1 and Nov. 1 to align with Spirit's "projected flight volume for 2026," the company noted in its quarterly report. They also follow previous furloughs and job cuts before the company's bankruptcy filing last year.

Despite these and other cost-cutting efforts, Spirit has said it needs more cash. As a result, the company said it may also sell certain aircraft and real estate.

And as discount carriers struggle to compete with bigger airlines — many of which have snagged budget-conscious customers through their own tiered offerings — Spirit is attempting to tap into the growing market for more upscale travel. It is now offering flight options with tiered prices, the higher-priced tickets coming with more amenities.

Spirit's aircraft fleet is relatively young, which has also made the airline an attractive takeover target. But such buyout attempts from budget rivals like JetBlue and Frontier were unsuccessful both before and during the bankruptcy process.

Spirit operates 5,013 flights to 88 destinations in the U.S., the Caribbean, Mexico, Central America, Panama and Colombia, according to travel search engine

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