Spirit Airlines warns it might not be able to survive the next year

In its quarterly earnings report this week, the carrier, which emerged from bankruptcy just five months ago, said demand continues to be weak and market conditions are still problematic. As a result, it may find itself in default.

“Because of the uncertainty of successfully completing the initiatives to comply with the minimum liquidity covenants and of the outcome of discussions with Company stakeholders, 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,” Spirit said in the report.

Spirit was a leader in the low-cost carrier market, but has faced substantial headwinds in recent years. A failed takeover attempt by JetBlue last year led to the bankruptcy filing. Passenger tastes, meanwhile, have shifted, with less interest in discount airlines and have shown a greater affinity to upmarket products, such as paying for extra legroom in coach.

Less than three weeks ago, Spirit announced it would furlough 270 pilots on Nov. 1 and demote 140 from captain to first officer on Oct. 1. That was latest in a line of furloughs for Spirit. The airline let 186 pilots go in 2024 and about 330 in January of that year. In May of this year, it cut 250-350 employees.

Spirit emerged from Chapter 11 in March. Prior to that filing, made last October, Spirit had not posted an annual profit since before COVID. To attract higher-paying customers, the company has launched a business-class option and blocked off the middle seat.