(NEW YORK) Spirit Airlines filed for Chapter 11 bankruptcy protection for the second time in less than a year on August 29, 2025, saying the move will allow deeper changes after earlier cuts failed to steady the carrier. The case was filed in the U.S. Bankruptcy Court for the Southern District of New York. Spirit said it will keep flying, keep selling tickets, and honor existing reservations, credits, and loyalty points while it works through court. Employees and contractors will continue to be paid during the process.
Executives acknowledged that the prior restructuring—completed when Spirit emerged from bankruptcy in March 2025—did not fix core problems like weak demand and high costs. The Board of Directors reviewed options and concluded that another court-supervised process offers the best chance to reshape the airline for the long term. Spirit has lost more than $2.5 billion since 2020, pressured by slower domestic leisure travel and tougher price competition from larger carriers.
The company expects to be delisted from the NYSE American Stock Exchange in the near term, and said that common stock will be canceled and rendered worthless as part of the restructuring. That is a heavy blow for existing shareholders, but common in Chapter 11 bankruptcy cases where debt must be cut before any value can remain for equity. Spirit named its outside advisors: Davis Polk & Wardwell LLP as lead counsel, Debevoise & Plimpton LLP on fleet matters, FTI Consulting on restructuring, fleet, and communications, and PJT Partners for investment banking.
Spirit’s dedicated restructuring website, including updates and key court filings, is available at the airline’s restructuring website. Additional case materials are posted on the official case information portal. The company also set up an information line at (855) 952-6606 (U.S. toll free) and +1 (971) 715-2831 (international). As of August 30, Spirit said there is no immediate impact on Labor Day travel or other near-term operations.
The latest filing follows an eventful year. Spirit first sought Chapter 11 protection in November 2024 after a judge blocked its planned merger with JetBlue. In March 2025, Spirit exited bankruptcy with new financing and reworked debt. Yet in an August 2025 SEC filing, the airline warned there was “substantial doubt” about its ability to continue as a going concern. By returning to court, management aims to negotiate broader changes with creditors and aircraft lessors that it says were not possible outside Chapter 11.
Immediate operations and customer rights
Spirit Airlines says customers can keep booking and traveling as usual. The airline will continue to run its schedule, accept new bookings, and honor credits and loyalty points during the case.
For travelers worried about cancellations or major schedule changes, the U.S. Department of Transportation’s refund rules remain in force. You can review your rights on the U.S. Department of Transportation’s Aviation Consumer Protection page. That government guidance applies no matter the airline’s financial status.
If you have time-sensitive travel—immigrant visa interviews, asylum proceedings, court check-ins, student program start dates, or urgent family visits—take these steps:
- Keep physical copies of your itinerary, passport, visa or travel authorization, and any appointment notices.
- If a change occurs, contact the airline promptly to rebook.
- Consider earlier departures or backup plans when dates are fixed (biometrics appointments, first day of classes, etc.).
According to analysis by VisaVerge.com, restructurings often keep planes flying while finances are sorted, especially when management commits to honoring tickets and loyalty balances. Still, travelers who must appear on set dates may want to leave extra buffer time in case of unrelated disruptions like weather or airport issues.
Important: DOT refund rules apply when a flight is canceled or there is a major schedule change. Keep records of communications with the airline.
Jobs, fleet, and financial steps
Spirit outlined specific workforce and fleet actions to match expected flying levels for 2026:
- Furlough about 270 pilots, effective October 1, 2025.
- Downgrade 140 captains to first officers, effective November 1, 2025.
- Consider sales of aircraft, real estate, and airport gate slots to raise cash.
Management described a wider revamp that includes redesigning its network, optimizing its fleet, and introducing tiered pricing with more amenities while keeping low fares central to the brand.
Industry analysts note these points:
- Spirit’s young fleet and established network could attract buyers for assets or potential suitors for parts of the business.
- Chapter 11 provides a framework to negotiate with lenders, lessors, and partners.
- The company may seek additional court-approved financing to support operations during the case.
Worker impacts and labor considerations:
- Furlough notices and pay downgrades will affect crew members directly.
- Spirit said employees and contractors will continue to be paid as the case proceeds.
- Labor groups will closely monitor route revisions and fleet adjustments.
Wider context for travelers and communities
Spirit built its brand on ultra-low fares and a pay-for-what-you-use model. Larger competitors have adopted similar tactics—cheaper fare classes and strict basic-economy options—narrowing Spirit’s pricing advantage. Basic costs (aircraft leases, maintenance, fuel) have remained high, helping explain why early 2025 cuts were insufficient and why another reset is necessary after August 29, 2025.
Community impacts and practical advice:
- Low-cost carriers like Spirit make family visits and key life events more affordable for immigrant and low-income communities.
- Spirit’s pledge to keep flying matters for refugees, new arrivals, and mixed-status families who rely on budget travel for jobs, school, or legal appointments.
- If you booked travel for consular trips, naturalization ceremonies, or orientations, Spirit says your plans should stand. If changes occur, keep documentation and rely on DOT refund protections.
Shareholders face a different outcome:
- Spirit expects common stock to be canceled with no value as part of the restructuring.
- The company also expects to be delisted from the NYSE American Stock Exchange soon.
- This reflects bankruptcy priorities: secured lenders and creditors are paid before equity when debts exceed assets.
What to watch next
Key focus areas in the Chapter 11 case:
- Cutting debt and reshaping aircraft leases
- Potential sales of assets and airport slots
- Negotiations with lenders, lessors, and creditors
- Possible court-approved financing to maintain operations
The airline said it expects ongoing uncertainties through the rest of 2025. For now, the immediate messages are:
- For travelers: continuity—flights, bookings, and loyalty programs continue.
- For workers: tough staffing and scheduling decisions are coming.
- For cities and communities: network redesign will determine future connectivity and affordable travel options.
Spirit’s filing, advisers, and customer assurances are available on its restructuring website, with formal dockets on the case information portal. The airline says the Chapter 11 process will support “a comprehensive operational and financial transformation.” The next test is whether those steps can restore steady demand and durable profits in a market where price-sensitive flyers have more choices and where costs remain hard to cut.
This Article in a Nutshell
Spirit Airlines filed for Chapter 11 on August 29, 2025, after a March 2025 restructuring failed to address weak demand and high operating costs. The carrier has lost over $2.5 billion since 2020 and expects delisting from the NYSE American Exchange; common stock will be canceled and likely worthless. Spirit will continue flying, selling tickets, and honoring reservations, credits and loyalty points while employees and contractors remain paid. The airline plans workforce changes — including furloughing about 270 pilots on October 1, 2025, and downgrading 140 captains to first officers on November 1 — and may sell assets to raise cash. Advisors include Davis Polk & Wardwell, Debevoise & Plimpton, FTI Consulting and PJT Partners. Travelers retain DOT protections for cancellations and major schedule changes. The Chapter 11 filing aims to renegotiate leases, cut debt, and secure financing, but the company expects uncertainty through the rest of 2025 as it seeks a durable turnaround.
