Major airline on verge of plunging into liquidation – in business since 1983

Spirit Airlines could liquidate as early as this week, according to sources close to the topic. Speaking anonymously to CNBC, they said, “the budget carrier has been struggling to regain its footing from its second bankruptcy in less than a year, but it now faces the added challenge of a spike in the price of fuel. Fuel is airlines’ biggest expense after labour”.

It is not clear when the carrier could begin liquidation, and it was not immediately clear if it would even end up taking that path.

Spirit began to suffer after the pandemic, CNBC wrote, when wages and other costs soared, customer preferences changed, and an oversupply of domestic flights drove down airfare.

CNBC also noted how pilot and flight attendant unions had made concessions in recent months in a bid to help Spirit survive. The airline had planned to shrink and focus on high-demand travel periods and routes in a bid to exit bankruptcy as early as this spring, it also reported.

Jet fuel costs, skyrocketing after the war in Iran, also played a part. Quoting JPMorgan, CNBC said that if fuel stays at about $4.60 a gallon this year, Spirit’s forecast operating margin for the 2026 fiscal year would range from negative 7 per cent to negative 20 per cent.

CNBC also added that Spirit forecast 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. “We don’t comment on market rumours and speculation,” Spirit said in a statement quoted by the same TV producer who reported.

Spirit Airlines, Inc. is an American ultra-low-cost airline headquartered in Dania Beach, Florida, in the Miami metropolitan area and operates scheduled flights throughout the United States, the Caribbean, and Latin America.