Spirit Airlines emerges from bankruptcy protection as travel demand slows

March 14, 2025 Michael Anderson

NEW YORK (AP) — Low-cost carrier Spirit Airlines has emerged from bankruptcy protection.

The low-cost carrier, known for its affordable, no-fuss flights on a fleet of yellow planes, announced Wednesday that its parent company, Spirit Aviation Holdings, has emerged from Chapter 11 bankruptcy after completing a debt restructuring. The reorganization plan, which received court approval last month, seeks to return the airline to profitability and increase its resources to compete with rivals.

“We are emerging as a stronger, more focused airline,” CEO Ted Christie, who will continue to lead Spirit after the bankruptcy, said in a statement.

The restructuring agreement allows Spirit to convert $795 million of its debt into equity. The company also says it has received a $350 million equity investment from existing investors to fuel its future operations.

Spirit filed for bankruptcy in November after years of struggle and mounting debt as it failed to recover from the COVID-19 pandemic. The Florida-based airline was hit particularly hard by rising operating expenses and increased competition. By the time it filed for Chapter 11, the airline had lost more than $2.5 billion since the beginning of 2020.

Spirit’s continued existence as an independent airline has also been uncertain, although acquisition attempts from low-cost rivals such as JetBlue and Frontier have been unsuccessful before and during the bankruptcy process. Spirit rejected a third offer from Frontier last month.
While future merger proposals may not be completely ruled out, Spirit signaled Wednesday that it will remain focused on its own growth and offerings. Christie noted that the airline “will advance its strategy of redefining low-cost travel with new, high-value travel options.”

In an evolution from its exclusive low-cost origins, Spirit is seeking to tap into the growing luxury travel market. It now offers tiered flight options, with more expensive tickets including more amenities. Last year, months before filing for bankruptcy, Spirit decided to sell fare packages that include a larger seat, priority boarding, free baggage, internet service, snacks, and beverages.

In a message sent to Spirit customers Wednesday, Christie went on to highlight the airline’s four travel options, which he said “allow you to choose how you want to fly.”
Wednesday’s announcement also mentioned plans to go public again, though not immediately. Spirit’s shares, previously issued by Spirit Airlines Inc., were canceled following its emergence from bankruptcy, but the company expects to relist the newly issued shares under new ownership “as soon as reasonably possible.”

Meanwhile, amid the widespread economic downturn, high-profile plane crashes, and other uncertainties for consumers, major airlines have issued warnings in recent days about falling demand. Airlines such as Delta, Southwest, and American have recently revised their first-quarter revenue forecasts downward.