A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
Kevin Carter | Getty Images News | Getty Images
Spirit Airlines is gearing up to shrink to a tiny version of its former self in an attempt to survive, according to a new plan it’s set to unveil in U.S. Bankruptcy Court on Tuesday.
The budget-travel icon plans to announce it will get rid of even more of its Airbus fleet as it aims to exit its second bankruptcy in less than a year. It expects to emerge in late spring or early summer, according to the agreement.
In its second bankruptcy, Spirit had held deal talks with Frontier Airlines, and with investment firm Castlelake.
Spirit’s new fleet would be made up of mostly older Airbus planes, according the the plan.
Spirit’s annualized fleet cost would be cut another $550 million, down 65% from before its bankruptcy filing last year, according to the plan. The debtors have also eyed another $300 million in cost savings from non-fleet cuts.
Spirit has already reduced some of its Airbus fleet and furloughed pilots and flight attendants to cut costs as it reduced its network, though some cabin crew members were called back to work ahead of spring break.
Spirit’s new plan will be challenging. It would pit a smaller version of Spirit against ever-larger competitors that dominate the U.S. market. Some U.S. budget carriers have struggled due to a surge in labor and other costs post-Covid, a growing consumer shift in favor of more upscale travel and increased competition from larger airlines that offer stripped down fares.
Spirit was uniquely challenged by a massive engine recall from Pratt & Whitney and a failed plan to get acquired by JetBlue Airways, a deal knocked down by a federal judge in early 2024.
Spirit forecast it would generate a net profit of $252 million last year, according to a court filing in December 2024. But it said in an August report that it lost nearly $257 million in a matter of months stretching from March 13, after it exited its first Chapter 11 bankruptcy, through the end of June. It filed for Chapter 11 bankruptcy protection again less than a month later.
