Spirit Airlines Cuts Flights, Jobs Amid Second Bankruptcy

Spirit Airlines is making significant reductions to its flight schedule and workforce as it navigates a second Chapter 11 bankruptcy filing within a year. The budget carrier faces ongoing financial pressures from rising operating costs, reduced consumer spending, and increased competition.

Spirit Airlines Reduces Operations Further

Spirit Airlines has announced a 25% reduction in its flight capacity for November 2025. This decision reflects the airline's struggle to maintain profitability in a challenging economic environment. The company also indicated that further job cuts are likely.

In a memo sent to employees, Spirit (SAVE) outlined these capacity reductions. The airline did not specify which routes would be affected or the exact number of positions to be eliminated. This announcement follows earlier workforce adjustments.

Just weeks before this latest news, Spirit confirmed it would stop serving 11 cities starting October 2, 2025. This move impacted various regions across the United States, signaling a strategic pullback from less profitable markets.

Cities Losing Spirit Airlines Service

• Albuquerque, New Mexico
• Birmingham, Alabama
• Boise, Idaho
• Chattanooga, Tennessee
• Oakland, California
• Columbia, South Carolina
• Portland, Oregon
• Sacramento, California
• Salt Lake City, Utah
• San Diego, California
• San Jose, California

Failed Merger and Financial Strain

Spirit's current financial difficulties are the result of several years of mounting debt and operational challenges. The airline has worked to find solutions to stabilize its business and return to profitability.

One major effort was a proposed merger with JetBlue Airways (JBLU). In July 2022, JetBlue agreed to acquire Spirit for $3.8 billion. This deal aimed to create a larger, more competitive airline.

However, a U.S. District Court in Massachusetts blocked the merger in January 2024. The court cited antitrust concerns, arguing that the deal would reduce competition by eliminating one of the lowest-priced airlines. This, the court stated, would likely lead to higher fares for consumers.

“The court ruled that the merger would eliminate one of the lowest-priced carriers and increase prices,” according to court documents.

By March 2024, both Spirit and JetBlue officially terminated their merger agreement, leaving Spirit to pursue other paths for survival.

Two Chapter 11 Filings in One Year

Spirit Airlines first filed for Chapter 11 bankruptcy in November 2024. At that time, the airline had accumulated more than $2.5 billion in losses over the preceding four years. This initial filing was an attempt to restructure its debt and operations.

The airline proposed a turnaround plan, which was expected to conclude by the first quarter of 2025. As part of this plan, bondholders agreed to provide $300 million in financing and contribute $350 million in equity investment. Additionally, $795 million of outstanding debt was converted into stock.

Spirit briefly emerged from bankruptcy in March 2025. However, despite these efforts, the initial restructuring plan did not achieve its desired results. Financial pressures continued to mount.

In August 2025, Spirit filed for Chapter 11 bankruptcy for a second time within a year. The airline listed its assets and liabilities as being between $1 billion and $10 billion. This second filing highlighted the ongoing challenges the company faced in a competitive market.

Spirit Airlines CEO Dave Davis stated, "Since emerging from our previous restructuring, which was targeted exclusively on reducing Spirit's funded debt and raising equity capital, it has become clear that there is much more work to be done and many more tools are available to best position Spirit for the future."

Spirit's New Restructuring Plan Focuses

• Redesign its network: Refocusing on key markets and exiting weaker ones.
• Optimize fleet size: Matching aircraft capacity with demand to meet profitability goals.
• Address costs: Cutting excess expenses across operations.
• Adapt to consumer trends: Offering expanded travel options to attract more customers.

Airlines Face Broader Industry Challenges

Spirit Airlines is not the only carrier to experience significant financial difficulties. Over the past 25 years, major U.S. airlines, including American Airlines (AAL), United Airlines (UAL), and Delta Air Lines (DAL), have all filed for bankruptcy before eventually recovering. This shows the cyclical nature and inherent challenges of the airline industry.

Recent months have also seen a surge in flight delays and cancellations across major airlines and airports. These disruptions affect thousands of travelers and add to operational complexities for carriers.

Many airlines often increase ticket prices to offset rising operational costs. Spirit, however, has traditionally relied on its affordable pricing model to attract a high volume of travelers. This strategy is crucial for its profitability.

Even with price increases and new fees for previously included perks, Spirit's budget model has become harder to sustain. The airline industry faces high fuel costs, labor expenses, and intense competition.

This data suggests a challenge for budget airlines. While price is important to many, a majority of travelers still opt for the services offered by larger, full-service airlines. Spirit's ability to attract and retain passengers while managing its cost structure will be key to its long-term survival.