Spirit Airlines parent company files for Chapter 11 restructuring

Spirit Aviation Holdings, the parent company of Spirit Airlines, has voluntarily entered the Chapter 11 restructuring process in the United States in a move aimed at strengthening its long-term financial position.

The company said the decision was taken to establish a more secure foundation for future growth. Chapter 11 is a court-supervised process that enables businesses to reorganise their operations and finances while continuing to operate as usual.

Spirit emphasised that this step is designed to ensure the airline’s long-term success and stability. Industry observers note that virtually every major US airline has previously used Chapter 11 proceedings to restructure and improve their businesses for sustainable growth.

Despite having emerged from Chapter 11 in March 2025 following a prior restructuring, the company filed for Chapter 11 once again, citing dwindling cash reserves, sustained losses, and a 26% year‑on‑year revenue decline in Q2, which saw a net loss of US$245.8 million. Management warned of “substantial doubt” about the airline’s ability to continue as a going concern over the coming year.

To stabilise operations, Spirit has embarked on aggressive cost-cutting efforts—furloughing approximately 270 pilots, demoting 140 captains, and reducing routes. It also plans to divest aircraft, airport properties, or real estate to raise much‑needed capital. The company is adopting tiered pricing packages and exploring network and product enhancements, but acknowledges that these actions may not suffice without additional liquidity and operational efficiencies.