Americans could soon have one fewer option for discount air travel.
Spirit Airlines could be headed towards a liquidation as surging fuel costs caused by the Iran war are pressuring the company’s finances, Bloomberg reported Wednesday night. The airline has been operating while navigating the Chapter 11 bankruptcy process, but could make the decision to liquidate as soon as this week, per Bloomberg.1
Spirit filed for bankruptcy last August, its second time doing so in under a year, after exiting its first bankruptcy restructuring months earlier in March. Spirit had reached a deal with its creditors to cut costs and eliminate billions in dollars of debt and said last month that it expected to exit the Chapter 11 process this summer.2
Spirit Airlines did not immediately respond to a request for comment on the report.
Spirit’s troubles before its first bankruptcy included a failed merger with JetBlue (JBLU) that was called off in March 2024 after a judge blocked it on antitrust grounds. Spirit also rejected offers from fellow discount airline Frontier Group (ULCC) while undergoing its first bankruptcy process last year.
Frontier shares surged Thursday morning on the news of Spirit’s potential liquidation, rising more than 7% to a six-week high.
The surge in fuel prices resulting from the Iran war has prompted airlines across the industry to raise ticket prices and fees recently. Travel demand has remained strong, but higher fuel costs weigh on the profit margins of airlines.
Credits: Spirit Airlines
