Spirit Crawls Into Court Bernie-Style… “Once Again Asking” for Cash After 2nd Chapter 11 in a Year

You know what they say: “when the going gets tough… spray on some yellow paint and beg your creditors for another loan.”

About a month after admitting they might not survive into 2026, Spirit Airlines is back at it with another Lazarus act… locking in $475 million in debtor-in-possession financing. For the uninitiated, that’s bankruptcy code for: “we’ll loan you money, but we get dibs on your stuff if (read: when) this circus crashes again.”

And in classic “Greyhound of the skies” fashion, the timing is pure comedy. This is Spirit’s second Chapter 11 in less than a year. They just stumbled out of bankruptcy in March, immediately lost another $250 million by June, and now they’re back in court rattling the tin cup like a beggar on the street. Restructuring lawyers are hyping “massive progress” while creditors like Citadel, Ares, and Pimco are tossing Spirit a lifeline with one hand and holding a fire extinguisher with the other.

The so-called turnaround plan looks like this: they’ll get $475 million from noteholders if the court signs off, with $200 million hitting right away. They’ve also locked in $150 million from AerCap by rejecting leases on 27 Airbus planes, most of which are grounded after Pratt & Whitney engines decided reliability was optional.

(Source: Reuters)

On top of that, 12 airport leases and 19 ground handling agreements are getting scrapped, 40 routes have been thrown in the paper shredder, and one-third of flight attendants are headed for furlough. They’re even trying to squeeze $100 million in cuts from the pilots’ union. Oh, and because logic clearly doesn’t apply, Spirit still plans to take delivery of 30 new planes. (If SNL and Shane Gillis don’t turn this into a skit, what are they even doing?).

Meanwhile, competitors aren’t waiting around. United, Frontier, JetBlue, and Allegiant are all rushing to steal Spirit’s customers, and United CEO Scott Kirby even said the quiet part out loud: “We expect Spirit to go out of business.” Cold, but not wrong.

CEO Dave Davis is insisting that Spirit is “building a stronger future” and providing “high-value travel options,” but convincing people that the airline famous for charging you to print a boarding pass is suddenly premium feels about as likely as Subway (post Jared) getting awarded a Michelin star. Spirit has $120 million in liquidity approved to burn right now, they’re banking on the court unlocking another $200 million next week, and they’re hoping passengers still want “no-frills” when competitors are offering fewer hidden fees and planes that actually work.

And thus the “Spirit Circle of Life” continues… Bankruptcy, bailout, route cuts, stock pop, repeat. The airline keeps dying on the runway and then clawing back just enough to impress everyone that it’s not dead yet. This $475 million lifeline might buy them a few more flights around the US, but if it doesn’t stick, Scott Kirby’s “they’re toast” prediction is going to age like fine wine. 

And for the Newark-to-Fort Lauderdale crowd, that $38 ticket (which always magically morphs into $188 after Spirit’s fee gauntlet) might finally be gone for good. But let Spirit be a lesson to us all: if you’re going down… don’t go down without kicking and screaming (and repeatedly asking everyone you know for more money).

At the time of publishing this article, Stocks.News holds positions in United as mentioned in the article.