Spirit Airlines has lined up a crucial $475 million financing package to keep its operations running as it undergoes its second bankruptcy restructuring in less than a year.
The ultra-low-cost carrier said the funding will come in the form of debtor-in-possession financing from existing bondholders, with $200 million available immediately once the court gives approval. The package also includes $120 million in interim liquidity support through a cash collateral arrangement.
In a bid to cut costs and streamline operations, Spirit reached a deal with AerCap, its largest aircraft lessor, to reject leases on 27 planes. In exchange, AerCap will provide Spirit with $150 million and settle disputes over future Airbus deliveries.
The airline is also scaling back its network, suspending 40 routes beginning in November. U.S. Bankruptcy Court has already approved Spirit’s request to terminate 12 airport leases and 19 ground handling agreements.
Despite the cash infusion, Spirit faces a challenging road ahead. The company has furloughed about a third of its flight attendants, and analysts warn of “substantial doubt” about its ability to remain viable long term. Competition in the low-cost carrier space remains fierce, while revenue pressures continue to weigh on the business.
The next bankruptcy court hearing on the financing package is set for October 10, 2025.
This marks Spirit’s second Chapter 11 filing this year it previously exited bankruptcy protection in March underscoring the airline’s deep financial troubles. Still, executives insist the restructuring plan will right-size the carrier, focusing resources on profitable markets while shedding unviable operations.
