Spirit Airlines has raised doubts over its ability to continue operating, just months after emerging from bankruptcy, as weak domestic demand and shrinking cash reserves heap pressure on the low-cost carrier.
The Florida-based airline said elevated domestic capacity and soft leisure travel demand in the second quarter had created a challenging pricing environment, which it expects to persist through the rest of 2025.
The downturn has already prompted Spirit to announce the furlough of around 270 pilots and the demotion of a further 140 to cut costs.
Spirit, best known for its bright yellow livery, became the first major US airline since 2011 to file for Chapter 11 bankruptcy when it sought court protection last November after years of losses, failed merger attempts and heavy debt. It exited bankruptcy in March under a restructuring backed by creditors.
The carrier said broader economic uncertainty, fuelled by President Donald Trump’s new tariffs and government budget cuts, had also curbed consumer spending on travel.
Adding to the strain, its credit card processing partner has requested additional collateral, warning that its contract—due to expire on 31 December—could be at risk.
To boost liquidity, Spirit plans to sell or monetise aircraft and real estate assets, and give up surplus airport gate space.
However, the airline admitted that uncertainty over meeting minimum liquidity requirements and the outcome of talks with stakeholders had created “substantial doubt” about its ability to remain in business over the next year.
