Spirit Plans Major Cutbacks in 2nd 2025 Bankruptcy

Spirit Airlines is planning additional cutbacks in its route structure and flight schedule as it continues to struggle with profitability and cash flow during its second bankruptcy in 2025.  Those cutbacks include a requested $100 million in cuts from pilots, a 25% capacity cut in the fall schedule, and the likelihood of layoffs.  Earlier this year, Spirit management publicly raised doubts regarding the viability of the company as a going concern, and going through two bankruptcy restructurings within six months is unusual not only for airlines, but for any type of company.

The company’s business relies on leisure travel, which was weak in Q2 and has not rebounded to planned levels, creating a cash flow crisis.  The company, with a 25% schedule reduction, will need to proportionately reduce the size of its staff, and return excess aircraft and spares to generate cash.   The company is changing its business strategy and product, introducing a first class and premium economy with more legroom, but is well behind its major airline competitors in doing so.  As an ultra-low-cost-carrier, Spirit typically has the lowest fares in the industry, but uses the same aircraft as other airlines, relying on lower labor costs and operational efficiencies to provide a margin.