Spirit Airlines, like its namesake, will re-emerge from the afterlife and continue to haunt budget-conscious passengers with $5 bottles of water, chaotic boarding processes, and tiny, uncomfortable seats.
The airline reached a deal on Tuesday with lenders to exit chapter 11 proceedings, by selling off a chunk of its Airbus fleet, reducing its flight schedule, and furloughing workers, The Wall Street Journal reports. A judge still has to approve the plan, but the company hopes to emerge from bankruptcy by early summer like an ultra-low-cost poltergeist.
As part of the deal, Spirit plans to get rid of about $5.4 billion in debt and lease obligations on its fleet, much of which has been sitting idle. That will result in a reduction of fleet costs by $550 million, down 65% from the airline’s last bankruptcy filing.
Spirit’s stock, which began trading on the New York Stock Exchange last year under the ticker FLYY, is in the process of delisting. It’s now traded over-the-counter as FLYYQ. Shares surged 33% on Tuesday, though only trading around 44 cents per.
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Spirit’s latest attempt at resuscitation comes after a federal judge blocked a proposed merger with JetBlue Airways in 2024. A major engine recall from Pratt & Whitney, combined with softening consumer demand for air travel — as consumer demand softens for pretty much everything — left Spirit in a tough position, fighting for a lifeline. Most airlines rely heavily on regular, corporate travel, whereas Spirit is the preferred choice for value-seeking tourists and personal travel. Which means its business model is far less inoculated from macro shocks like inflation and tariffs, than mega-carriers like Delta or United.
And while Spirit looks to cut costs to stay alive in its corporeal form, deal talks aren’t dead. The company has engaged with Castlelake, and investment firm, to consider a merger with low-cost competitor Frontier, CNBC reports.
It remains to be seen whether President Trump’s hand-picked Federal Trade Commission head Andrew Ferguson will be more amenable to ultra-low-cost tie-ups than Lina Khan. The FTC is a hollow shell of its former Biden-era self, so merging is certainly a viable option for the business to remain alive.
In any case, Spirit’s plan to come back from the dead looks to be set. But it remains to be seen whether it’s just a phantom, or a true re-awakening.
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