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By Sonam Sheth
Evening Politics Editor
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Spirit Airlines filed for bankruptcy on Friday for the second time in under a year, The Wall Street Journal reported.
Why It Matters
Spirit has long been grappling with declining demand and related financial strains, which contributed to the struggling airline filing for bankruptcy in November.
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While it emerged from the Chapter 11 process in March, Spirit said in a U.S. Securities and Exchange Commission (SEC) filing earlier this month that profitability struggles and weak demand had raised "substantial doubt as to the company's ability to continue as a going concern within 12 months."
What To Know
According to The Journal, Spirit is looking to shed some of its planes and lower its costs while facing financial headwinds.
"The right thing to do is to get on with a proper restructuring, a complete revamp of the business plan, the network plan," John Milton, the chairman of Spirit's board, told The Journal in an interview. "We just need to get on with fixing this airline properly and thoroughly."
Spirit said in a first-quarter filing that "adverse market conditions," including low leisure travel demand and surplus capacity, had resulted in a "challenging pricing environment."
The airline reported a net loss of $245.8 million for the quarter, which ended on June 30, significantly wider than the $192.9 million loss over the same period in 2024.
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What People Are Saying
Spirit CEO Dave Davis wrote in an email to employees earlier this year: "Spirit is a critical part of the U.S. aviation industry. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. We remain hard at work on many initiatives to protect our unique franchise, our valued Team Members, our business partners and our Guests who place their trust in us every day. We appreciate your commitment and professionalism during this challenging phase and, with your help, we will transform and protect this critical business."
Jonathan Williams, a professor of economics at the University of North Carolina at Chapel Hill, previously told Newsweek: "[Spirit has] served an important role in the low-cost carrier space, offering a source of intense price competition for the network carriers that will be hard to replace. Smaller carriers like Breeze and Avelo don't have the assets to step into that role yet. So what happens to Spirit's assets (e.g., gates, aircraft, etc.) is very important for the ultimate impact."
What Happens Next
It remains unclear whether Spirit Airlines will be bankrupt or not.
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