One of the most iconic ultra-low-cost airlines in the United States has announced “significant progress” in its ongoing Chapter 11 debt restructuring.
Spirit Airlines said on September 30 that it has secured $475 million in funding from existing bondholders to support its normal business operations while the carrier continues its second bankruptcy proceeding within one year.
The funding will be an essential lifeline for the carrier and is subject to approval from federal bankruptcy court, with a hearing scheduled for October 10. Once the court clears the funds, Spirit expects to receive $200 million immediately.
Receiving the cash liquidity means the low-cost carrier has cleared a major hurdle. In August, Spirit had warned investors in a quarterly filing that it desperately needed cash or risked the ability for operations to continue.
In addition to the new funding, Spirit also said that it has made major strides in downsizing its fleet, thanks to a new agreement with its largest aircraft lessor, AerCap. Under the new terms, which are also subject to approval in the October 10 hearing, AerCap will pay Spirit $150 million and Spirit will reject leases on 27 planes, slimming operating costs by hundreds of millions of dollars, according to the airline.
"These are significant steps forward in a short period of time to build a stronger Spirit and secure a future with high-value travel options for American consumers," said the airline’s CEO Dave Davis. "While there's more work to be done, we're grateful to our stakeholders who have stepped up to support us during the restructuring. We remain focused on delivering a safe, reliable operation, and I'm incredibly proud of our Team Members for continuing to rise to the occasion and take great care of our Guests."
As part of its current bankruptcy process, Spirit has been busy slashing routes and slimming operations. The carrier cut 25% of its flight schedule in November, ended leases at 12 airports, and nixed 19 ground handling agreements in order to cut costs.
As the bankruptcy proceedings continue, the airline says it is negotiating further downsizing of its fleet and other agreements with additional lessors.
Spirit entered its second bankruptcy restructuring on August 29. It declared its first Chapter 11 filing in November 2024 and concluded those proceedings in March 2025.
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