Spirit Airlines gives stark warning about the airline’s future | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Even though most airlines have gone through a tumultuous few years, Spirit Airlines (SAVE) has had an especially rocky financial path.

Accumulating over $3.8 billion in debt after earlier plans for acquisitions with JetBlue (JBLU) and Frontier Airways (FRON) fell through, Spirit filed for bankruptcy in November 2024.

While it was able to continue operations and emerge from bankruptcy proceedings by ceding control to its biggest bondholders and converting $795 of debt into equity, Spirit continued to face financial troubles amid a market driven by lower domestic demand. Despite making a number of cost-cutting measures, the $245.8 million loss that the low-cost airline reported in the second quarter of 2025 is even larger than the $192.9 loss reported at the same period in 2024.

Don’t miss the move: SIGN UP for TheStreet’s FREE Daily news

Spirit speaks of ‘substantial doubt’ to its ability to survive

In a quarterly report filed with the Securities and Exchange Commission (SEC), Spirit said there is now “substantial doubt” about its ability to stay in business as an airline.

“Because of the uncertainty of successfully completing the initiatives to comply with the minimum liquidity covenants and of the outcome of discussions with Company stakeholders, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” the airline said in the filing.

The filing further states that without an ability to obtain more cash — something that has proven to be a consistent problem — Spirit will not be able to make debt payments to creditors and risks default.

At the end of July, the airline furloughed 270 pilots and demoted 140 others after similar moves earlier in the year. Other cost-cutting measures, such as reworking its fare model and canceling multiple flights to focus on the most profitable ones, have still failed to bring in the traffic necessary to make a dent on its debts.

Longtime chief executive Ted Christie was also replaced by Dave Davis of Sun Country Alliance in April 2025.

Ted Christie was pushed out of his role as chief executive in April 2025.

Image source&colon; TheStreet Illustration

‘Elevated domestic capacity and continued weak demand for domestic leisure travel’

“The Company has continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel in the second quarter of 2025, resulting in a challenging pricing environment,” the airline also said in the filing.

More on travel:

As a result, the airline’s future now hangs in the balance. When investors stepped in to help it when it first filed for bankruptcy, many were convinced by the airline’s strong brand. The airline was founded in the 1980s and is well-recognized in airports by its bright yellow livery.

But while many budget-conscious travelers would for years pick Spirit as the most affordable option, the need to raise prices left it struggling to compete with both budget and mainstream airlines whose prices it is now nearly matching.

As part of further efforts to avoid ceasing operations, Spirit told the SEC that it hopes to shed some gate slots at airports into which it flies on top of selling some of its aircraft and real estate.