Thu, Sep 04, 2025
Court Approves the Airline to Proceed With Business as Usual
Low-cost carrier Spirit Airlines has received the green light to continue scheduled flight operations as normal while under Chapter 11 Bankruptcy Protection. The new filing comes just five months after the carrier completed its restructuring process from last year.
CEO Dave Davis, who took over not long after Spirit’s last restructuring, expressed that "We are pleased to have reached this first milestone in our restructuring process, which will support normal operations as we take decisive action to ensure that Spirit continues delivering the best value in the sky for years to come."
The court’s first-day motions allow Spirit to keep up its scheduled passenger operations while reworking the behind-the-scenes details, including making cuts to its fleet and maintenance agreements. Spirit also launched a dedicated website to reassure passengers and investors that this filing is about building “a stronger foundation and future.”
Spirit’s recent numbers aren’t encouraging: the airline reported $2.4 billion in long-term debt and a negative free cash flow of $1 billion at the end of the last quarter. Losses have piled up since the pandemic, totaling more than $2.5 billion. The last restructuring, completed in March, already converted $795 million in debt to equity and brought in $350 million of fresh investment. Even then, management admitted that there was “substantial doubt” about Spirit’s ability to keep operating through 2025 without another reset.
Competition has also cut deep. Spirit’s no-frills model is now being replicated or undercut by larger airlines that can afford to subsidize cheaper fares. Spirit tried to pivot with pricier “premium” options, like larger seats, boarding priority, and internet, but layoffs are already in the works. Merger talks with JetBlue and Frontier have also collapsed, leaving Spirit to figure out its recovery on its own.
Despite the ruling, unions are warning employees to prepare for “all possible scenarios.”
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