Spirit Free-Falls Into Chapter 11 (Again)... While the C-Suite Floats Down on Golden Parachutes

“Hit me bankrupt one more time.”

I’ve got to hand it to Spirit Airlines: filing for bankruptcy once is already depressing. Filing twice in the same year? That’s not just bad, that’s “hang the jersey in the rafters” bad. I actually looked this up, and the only other company recently dumb enough to pull that off was Joann Fabrics. Yes, the same store where my mom bought discount yarn and fake wreaths for every holiday known to man. So congrats, Spirit… you’re now in rarified air (pun absolutely intended).

After months of executives swearing “don’t worry, we’re fine,” Spirit just went running back to Chapter 11… a mere nine months after leaving it. Nine months. That’s less time than it takes to grow a baby. And honestly, this baby came out screaming, broke, and already applying for another line of credit. Meaning, the “fixes” from last time weren’t fixes at all… they were more like putting a giant roll of duct tape over a hole in the fuselage and praying nobody asked questions.

Now, Spirit insists flights are still running and you can still book tickets (cash, points, or maybe a kidney donation soon). But Wall Street clearly isn’t buying the optimism. Shares collapsed 45% on the news, sinking under $1.50. For context, the stock was $8.28 in May. That’s an 81% wipeout in four months. To put it another way: if you dropped $1,000 into Spirit back then, you’d be holding about $185 today. Let’s have a quick moment of silence for the bagholders.

(Source: Yahoo Finance)

So how did Spirit manage to self destruct twice in under a year? Well, let’s start with the numbers. In Q2, Spirit lost $246 million while spending $1.2 billion in operating expenses. That’s 118% of revenue. Meaning: for every $100 they brought in, they spent $118 just trying to exist. You don’t need a CFA to know that’s f*cked. And when the cash dried up, they tapped out their $275 million credit line earlier this month… basically maxing out the credit card to keep the lights on. At that point, another bankruptcy wasn’t “if,” it was “give it a week.”

And here’s where it gets extra insulting. While the company was circling the drain, Spirit’s executives threw themselves a little payday party. CEO David Davis (who’s been in the job since March, like barely time to learn where the bathrooms are) is walking away with a $2.9 million “retention bonus.” The CFO pockets $1.2 million. A few other execs split $1.1 million. Meanwhile, flight attendants were told to “prepare for all possible scenarios.” So while shareholders are combing through their underwear drawers for extra cash… the suits in the C-suite get Rolexes.

(Source: Yahoo Finance)

This all comes while Spirit is locked in a fight with AerCap Holdings, its aircraft lessor, over 36 Airbus planes slated for delivery in 2027–2028. AerCap claims Spirit defaulted; Spirit, of course, insists “nah, fake news.” But let’s be real… when you’re filing Chapter 11 for the second time in nine months, your leverage is about as strong as a regular joe haggling his taxes with the IRS (he hasn’t filed in 5 years).

At the same time, rivals like Frontier, Southwest, and United are circling overhead like hawks in a Planet Earth episode, waiting to swoop in and buy up Spirit’s planes and routes for pennies… which might actually be a win for consumers. Having the reputation of “Greyhound of the skies” isn’t exactly a good one.

So whether you like it or not, you’re watching history in the making. Pathetic? Absolutely. Embarrassing? Without a doubt. But this is Spirit Airlines we’re talking about… two bankruptcies in nine months, a stock that’s cratered 90% in a year, and executives cashing out like bandits. Yes, the planes are still flying, but if you’re boarding one anytime soon, go ahead and budget an extra $20. Knowing Spirit, they’ll find a way to hit you with a brand-new surcharge to pay for their bankruptcy. Oh and the year’s not even over with, which gives Spirit the perfect opportunity to do something that I can almost guarantee has never been done in the history of the markets.

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