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Spirit Considers Additional Restructuring Following Chapter 11 Filing

Spirit Airlines Considers Further Restructuring Amid Continued Financial Challenges
Spirit Airlines is reportedly exploring additional restructuring options following its Chapter 11 bankruptcy process, which has yet to secure a sustainable path forward for the carrier. According to sources cited by The Wall Street Journal, the airline has engaged financial adviser PJT Partners alongside consulting firms FTI and Seabury Airline Strategy Group to evaluate strategic alternatives. These may include potential mergers or asset sales as the airline seeks to stabilize its operations and financial position.
Persistent Financial Struggles and Operational Pressures
Despite emerging from Chapter 11 in March 2025, having converted approximately $795 million of pre-existing debt into equity and raising $350 million in new capital from existing investors, Spirit continues to face significant headwinds. The airline’s challenges stem from weak domestic demand, elevated operational costs, and an oversupplied U.S. market. Key issues such as high lease expenses and operational inefficiencies remain unresolved, undermining the effectiveness of its reorganization efforts.
In a bid to strengthen liquidity, Spirit recently secured a $275 million revolving credit facility arranged by a consortium of lenders led by Citibank and Wilmington Trust. This facility, maturing in September 2026, is intended to support general corporate purposes and enhance cash reserves. Additionally, the airline renegotiated its agreement with its credit card processor, US Bank National Association, extending the contract by two years to December 2027. This extension involved providing additional collateral and permitting daily holdbacks of up to $3 million.
Operational challenges have compelled Spirit to furlough 270 pilots and downgrade 140 captains. The airline is also considering further cash-generating measures, including the sale of aircraft, real estate, or excess gate capacity. These steps underscore the urgency with which Spirit is attempting to address adverse market conditions and ongoing financial strain.
Financial Outlook and Market Implications
Spirit’s financial performance has fallen short of earlier projections. While the airline anticipated a $252 million profit for 2025, it instead reported a $256 million loss between mid-March and June. Moody’s Ratings now projects that Spirit could expend more than $500 million in cash over the course of the year. Such a cash burn would likely cause the airline to breach minimum liquidity covenants by year-end, potentially triggering default events as outlined in a recent company filing.
Although Spirit received debtor-in-possession financing and additional equity injections from bondholders during its bankruptcy proceedings, operational difficulties and excess domestic capacity continue to weigh heavily on the airline. In response to inquiries, Spirit declined to comment on “market rumors and speculation” but reaffirmed its commitment to implementing necessary changes aimed at strengthening the company and building a more resilient airline.
Spirit’s current fleet comprises 62 A320-200s, 91 A320-200Ns (with 25 additional aircraft on order), 29 A321-200s, and 32 A321-200NXs (with 32 more expected). As the airline undertakes its strategic review, industry observers and investors will closely monitor the outcome and its implications for Spirit’s future trajectory.

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