Spirit Airlines' financial woes could make your flight with a competitor more expensive
In a quarterly report filed Monday, Spirit Airlines warned that it might not survive another year. If it did go under, then competitors would, in theory, be able to raise ticket prices, analysts have said.
Spirit previously filed for Chapter 11 bankruptcy last November before exiting the process in March.
However, it has continued to report losses, which totalled $245.8 million in the second quarter of this year, and said there was "substantial doubt" over its "ability to continue as a going concern within 12 months."
Analysts at Raymond James said that rival airlines Frontier, JetBlue, and Southwest overlap the most with Spirit, which means they could be the most likely to increase fares.
"The biggest benefits to industry pricing from further pullback or exit by Spirit would be in routes where both Spirit and Frontier compete," wrote Savanthi Syth, a senior research associate at the firm.
She added that fares on these journeys are typically 15% cheaper than those operated by only one of the two airlines.
Spirit Airlines' share price fell by 40% to $2.10 on Tuesday.
Frontier rose 29%, JetBlue by 12%, and Southwest by 5%.
Syth said Raymond James analysts hadn't expected stocks to move as much as they have, given that Spirit's warning was "not necessarily a surprise."
The airline said there was weaker demand for domestic leisure travel, the core of its business model. Economic concerns over Donald Trump's tariff plan have seen people cut back on travel, while post-pandemic fliers are more interested in paying for premium options.
Spirit could sell aircraft and the rights to gates at several airports to try to make money, as its credit-card processor is demanding collateral.
If it ceases operations, thousands of jobs would be at risk.
Spirit's failed merger
Some industry players have criticized the government's decision to deny JetBlue's attempt to buy Spirit for $3.8 billion over antitrust concerns, which went to trial in October 2023.
P.S. I'm 🤬. The objection to the merger was a fanciful idea that Spirit would just keep playing the ULCC 'role' of consumer choice and competition with the majors (on the backs of workers, btw, and SNL's punchline every Saturday). Read the absurd DOJ arguments - that were wrong!
— Sara Nelson (@FlyingWithSara) August 13, 2025
When JetBlue announced it had terminated the merger agreement last March, the then-attorney general, Merrick Garland, said it was "another victory for the Justice Department's work on behalf of American consumers."
In a Tuesday X post, Sara Nelson, the president of the Association of Flight Attendants-CWA, said: "The objection to the merger was a fanciful idea that Spirit would just keep playing the [ultra-low-cost carrier] 'role' of consumer choice and competition with the majors."
Spirit Airlines, Frontier, JetBlue, Southwest, and the DoJ did not immediately respond to requests for comment sent outside US working hours.
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