Spirit Airlines warns of "substantial doubt" about its future
Why it matters: The ultra-low-cost carrier emerged from Chapter 11 bankruptcy protection less than six months ago with hopes of becoming a more competitive and financially stable operation.
Driving the news: Spirit said in an SEC filing that "there is substantial doubt as to the Company's ability to continue as a going concern" — a legally required notice when publicly traded companies face a significant deteriorating in their finances.
The company said it "continues to experience challenges and uncertainties in its business operations and expects these trends to continue for at least the remainder of 2025."
Those challenges include "elevated domestic capacity and continued weak demand for domestic leisure travel," which have suppressed prices.
Threat level: Spirit's credit-card processor recently requested "additional collateral" to renew their deal, but that "could result in a material reduction of unrestricted cash," the company warned.
The airline said it's taking steps to boost its liquidity, including the sale of aircraft and real estate, the sale of excess gate capacity and other cost cuts.
The company has already implemented "network and product enhancements," sale-leaseback transactions on spare engines, and other cost cuts, including recently announced pilot furloughs.
Flashback: Spirit had arranged a $3.8 billion sale to JetBlue, but a federal judge blocked that deal in 2024 at the urging of the Biden administration.
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