Despite successfully emerging from bankruptcy earlier this year, Spirit Airlines is once again facing a turbulent flight path. The budget carrier has issued a stark warning to investors, expressing “substantial doubt” about its ability to continue as a viable business due to persistent financial struggles and a difficult market. As the airline considers selling off key assets and grapples with a crucial year-end deadline, the news has left many travelers wondering: is it still safe to book a seat on a Spirit flight?
Spirit Airlines issues dire warning over its financial future
In its latest quarterly filing on Monday evening, Spirit Airlines, headquartered in Dania Beach, Florida, sounded an alarm over its financial future. The carrier admitted that its recovery is lagging what’s needed to satisfy creditor liquidity requirements, meaning its available cash and short-term credit aren’t growing quickly enough to match revenue inflows.
To bridge the gap, Spirit is weighing the sale of aircraft, airport gates, and other valuable assets, while also negotiating with certain creditors to ease liquidity pressures. Yet the airline cautioned that if these measures fall short, there remains “substantial doubt” about its ability to remain operational over the next 12 months. The potential outcomes are stark: a second bankruptcy filing—or, in the worst case, full liquidation.
Spirit Airlines’ recovery stalls after bankruptcy exit
This is not the first time Spirit has faced a near-existential crisis. Just last summer, the collapse of its proposed merger with JetBlue Airways left the airline financially vulnerable. Losses were mounting, and creditors—particularly its credit card payment processor—were pressing for stronger liquidity. The pressure culminated in a Chapter 11 bankruptcy filing in November 2024.
By March, Spirit emerged from bankruptcy leaner and with reduced debt, but profitability remained elusive. The airline posted an operating loss of $184 million in the three months ending in June, or $186 million from the day it exited bankruptcy.
In an attempt to boost revenue, Spirit shifted its strategy to attract higher-paying customers. It rebranded its Big Front Seat as “Spirit First”, launched fare bundles comparable to those of larger airlines, and introduced a premium economy extra-legroom option. The carrier also expanded its network to destinations from Belize to Tennessee and formed a partnership with U.S. regional airline Contour Airlines.
Yet these moves have done little to shield Spirit from the broader slowdown in U.S. domestic leisure travel. While many airline executives believe the market is slowly recovering, Spirit’s own financial forecast is far from optimistic. “The company continues to experience challenges and uncertainties in its business operations and expects these trends to continue for at least the remainder of 2025,” the airline noted in its latest filing.
Should you book Spirit Airlines flights amid shutdown concerns?
For now, most travelers with upcoming trips on Spirit Airlines have little reason to panic. The airline’s recent financial warning is aimed at investors and spans a long-term horizon—about a year into the future—rather than signaling an immediate collapse. Flights scheduled for the coming days or weeks are unlikely to be affected.
A critical milestone to watch is December 31, 2025, the date by which Spirit must renegotiate its agreement with its credit card processor. In its SEC filing, the airline cautioned that the revised deal could require additional collateral, potentially tying up cash reserves and limiting the liquidity needed to operate smoothly. How the airline handles these negotiations will provide a clearer picture of its financial stability heading into 2026.
For uneasy travelers, booking with extra safeguards is wise. Consider purchasing travel insurance, but read the fine print carefully—many standard policies do not cover losses caused by an airline ceasing operations. Look specifically for a “supplier failure” or “bankruptcy” clause if this is your main concern. Another option is to book flights using a credit card with strong travel protections, as some issuers offer built-in trip cancellation or reimbursement benefits if an airline stops flying.
Ultimately, while Spirit’s warning shouldn’t deter most short-term bookings, travelers planning trips several months out may want to stay updated on the airline’s financial situation, especially as that late-December deadline approaches.
Source: The Points Guy