NEW YORK (AP) — Just months after emerging from Chapter 11 bankruptcy, Spirit Airlines is raising red flags about its future. The parent company, Spirit Aviation Holdings (FLYY), announced it has “substantial doubt” about staying in business over the next year.
In a recent quarterly report, Spirit cited ongoing “adverse market conditions” that linger despite its restructuring efforts. Chief among these challenges is the weak demand for domestic leisure travel, which is expected to continue at least through the end of 2025.
Famous for its no-frills, low-cost flights, Spirit has struggled since the pandemic. Rising operational costs and debt forced it to seek bankruptcy protection last November, having lost over $2.5 billion since 2020.
When Spirit emerged from bankruptcy in March, it restructured its debt and secured new financing. However, it still faces tough decisions. The airline announced plans to furlough about 270 pilots and downgrade 140 captains to first officers, starting in October. These changes align with the company’s forecast for reduced flight volume for 2026.
Despite cutting costs, Spirit emphasized the need for more liquidity. The company may resort to selling planes and real estate to improve its financial position.
Interestingly, Spirit’s younger fleet has made it a target for takeovers. Major budget airlines like JetBlue and Frontier attempted to acquire Spirit but failed before and during the bankruptcy proceedings.
As of Tuesday morning, Spirit’s stock dropped more than 40%, trading just above $1.80. This sharp decline reflects investors’ growing concerns about the airline’s viability.
Experts in the airline industry have pointed out that Spirit’s predicament highlights broader trends. According to a recent IATA report, the airline recovery post-COVID has been uneven. While many airlines see a rebound in international travel, domestic markets remain shaky, especially for budget carriers.
As the airline navigates this rough patch, its future remains uncertain. Customers and industry watchers alike are keeping a close eye on Spirit’s next moves.
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Spirit Airlines, Spirit Aviation Holdings, Chapter 11 bankruptcy, bankruptcy filing, future operations, parent company
