Spirit Airlines is warning investors that it could be forced to go out of business in the next 12 months as it struggles to regain profitability after emerging from bankruptcy earlier this year.
Executives wrote in the airline’s quarterly filing on Aug. 11 with the Securities and Exchange Commission that the company is unsure if it will be able to meet minimum cash-on-hand requirements put in place as part of the end of its bankruptcy.
“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. As a result, the Company continues to experience challenges and uncertainties in its business operations and expects these trends to continue for at least the remainder of 2025,” the filing said.
The document went on to note steps that Spirit Airlines is taking to try to boost profitability, including restructuring its route network and adding more premium seating onboard because premium leisure travel continues to see relatively high demand across the airline industry.
Spirit last month announced a plan to furlough 270 pilots in an effort to maintain its liquidity. The company said it is considering other efforts, including selling some of its aircraft and gate capacity to other airlines.
Still, the airline warned, these steps may not be enough to keep it afloat.
“While it is the Company’s goal to execute on these initiatives, there can be no assurance that such initiatives will be successful,” the filing said. “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.”
For travelers booked on Spirit, there is no immediate danger that their flights will not operate, but those with longer-term travel plans should, at least, consider buying travel insurance if their itinerary includes Spirit flights.
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Experts have said that the loss of Spirit Airlines in the U.S. aviation market would be a bad thing for travelers across the country – even those who never have or never will travel with the airline.
“The (ultra low cost carriers) collectively are the fare leaders. It’s in consumers’ best interest for the budget airlines to stay in business and be successful businesses,” Henry Harteveldt, president of Atmosphere Research, a travel industry analytics firm, previously told USA TODAY. He and other analysts have repeatedly pointed out that low-cost, low-fare airlines typically drive down ticket prices when they enter a new market, meaning even full-service airlines often reduce their prices to compete for customers.
If Spirit goes away, experts warn, it’s very likely that ticket prices could rise in the markets it serves.
Zach Wichter is a travel reporter and writes the Cruising Altitude column for USA TODAY. He is based in New York and you can reach him at zwichter@usatoday.com.
This article originally appeared on USA TODAY: Spirit Airlines warns it could be out of business within the year
