Months of uncertainty might finally be coming to an end for one of the most well-known ultra-low-cost airlines in the United States.
Spirit Airlines announced on Tuesday that it has reached an agreement in principle with its lenders to emerge from its Chapter 11 bankruptcy proceedings by late spring or early summer.
The embattled carrier entered its current bankruptcy in August 2025. Since then, the airline’s executives have spent months reducing costs by shrinking the carrier’s fleet, cutting airport slots, and trimming routes across its network. But even with all of the reductions, it wasn’t clear if Spirit would make it out of its second bankruptcy in a year.
The airline had been scrambling for cash infusions from bondholders to stay afloat. Now, the tentative agreement ensures that Spirit will have enough financial support to complete its restructuring process.
"This agreement in principle is the result of months of hard work and allows Spirit to move toward completing its transformation," said Spirit’s CEO Dave Davis. "Spirit will emerge as a strong, leaner competitor that is positioned to profitably deliver the value American consumers expect at a price they want to pay."
Spirit said it expects to emerge from bankruptcy with significantly fewer debt and lease obligations, from $7.4 billion pre-filing down to about $2.1 billion post-emergence. Last fall, the carrier predicted it could make its operations profitable by 2027.
The airline said that its new business strategy will focus its route network and fleets on peak travel periods and reduce flying in off-peak stretches. The carrier is also pivoting to offer more premium products and says that it plans to expand its new first class and premium economy seats, as well as continue to enhance its loyalty program and credit card offerings.
Low-cost airlines were hit particularly hard by economic uncertainty in the first half of 2025, when price-sensitive fliers held off on booking travel amid headwinds like shifting tariff policies. However, US carriers now say they’re seeing a resurgence in demand for domestic leisure routes and economy seats.
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