Spirit’s survival hinges on finding more cash

Spirit Airlines can’t seem to reach its cruising altitude. The budget airline issued a warning late Monday that if it doesn’t find an infusion of cash, its business is poised to fail.

Spirit expressed the dire state of its financials in its quarterly earnings report, filed late Monday. The report comes less than six months after the beleaguered airline emerged from bankruptcy with a plan to right its business and pursue profitability.

“Management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” the company wrote in the filing, citing a scenario in which the company fails to hold the liquid assets needed to meet its debt obligations and keep its credit card processor.

To steer itself out of the crisis, Spirit is pursuing “liquidity enhancing measures” that could include selling some of its aircraft or real estate and offloading some of its extra airport gate capacity. “While it is the Company’s goal to execute on these initiatives, there can be no assurance that such initiatives will be successful,” the company wrote.

Spirit cut 200 jobs back in January as part of its plan to slash $80 million in costs. Last year, the company sold 23 Airbus planes – more than 10% of its fleet – to drum up emergency cash. 

“As you all know, we’re facing significant challenges with our business, which is why we’ve been focused on taking actions to optimize our organization and create more efficiencies,” Spirit CEO Ted Christie told staff in an internal memo early this year. “The bottom line is, we need to run a smaller airline and get back on better financial footing.”

Recent problems, Frontier bailout

Spirit filed for Chapter 11 bankruptcy late last year in light of mounting losses, a pile of debt and failed merger negotiations. 

The airline continued to operate during that time frame, which coincided with the busy holiday travel season. “The most important thing to know is that you can continue to book and fly now and in the future,” the company wrote in an open letter to customers at the time.

Spirit was in talks with JetBlue to combine the two airlines back in 2023, but the ill-fated merger faced stiff opposition. The Justice Department sued to block the $3.8 billion deal over antitrust concerns and ultimately a federal judge sided with the government, sounding the merger’s death knell. 

Earlier this year, Spirit rejected a different merger offer from fellow budget carrier Frontier. Frontier revised the offer, but Spirit declined to move forward with the deal, which would have been worth around $2.16 billion. At the time, the company insisted that going it alone and pursuing its post-bankruptcy restructuring plan would benefit shareholders more than doubling up with another airline.

The airline industry is in a strange transitional phase in 2025. Normal U.S. carriers are looking to rebrand themselves as “lifestyle” airlines while credit card companies double down on luxe travel perks designed to make air travel more bearable. The industry’s already wafer-thin margins are threatened by Trump’s endless parade of tariffs and the economic chaos they sow. Meanwhile, a spate of U.S. aviation disasters has led to tanking trust in air travel and calls for a national overhaul of the air traffic control system that undergirds the whole industry. 

How – and if – budget airlines fit into the future of travel is an open question, but it’s one Spirit needs to answer if it plans to survive. Unfortunately for the troubled airline, time is running out.