The stock of Spirit Aviation Holdings, Incorporated finished the day today, Tuesday, August 12, 2025 after having plummeted 40.68 percent — or $1.44 per share — to $2.10 per share on the news that Spirit Airlines has warned of “going-concern doubts” only months after the struggling airline emerging from bankruptcy protection; which means that Spirit Airlines operating through 2026 may be doubtful.
Spirit Airlines Operating Through 2026 May Be Doubtful
The price per share of FLYY stock was as low as $1.75, as weak demand within the United States from people spending less money on travel compounded with dwindling cash reserves to significantly strain the operations of Spirit Airlines. The uncertainty over meeting minimum liquidity covenants — combined with the outcome of talks with stakeholders — has incurred substantial doubt about the ability of the company to “continue as a going concern” over the next twelve months, as financial results are not improving at the same pace that are required by the agreements of creditors.
After years of sustaining losses; numerous failed merger attempts; consumer tastes that have shifted to more upmarket products; substantial debt; “operational challenges” on Monday, August 2, 2021; a class action settlement of $8.5 million; and an engine recall that grounded many of its airplanes — among other things — Spirit Aviation Holdings, Incorporated filed voluntary petitions for reorganization and protection under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York on Monday, November 18, 2024 in an effort to both preserve its business for the future and ensure that it emerges from its court-supervised reorganization of its business as a highly competitive and successful carrier in North America. Spirit Airlines was the first major carrier in the United States to file for Chapter 11 bankruptcy protection since 2011.
The airline officially emerged from its financial restructuring on Wednesday, March 12, 2025.
The quarterly report of Spirit Aviation Holdings, Incorporated — which is the parent company of Spirit Airlines — that was released yesterday, Monday, August 11, 2025 cited such adverse market conditions as elevated domestic capacity coupled with weak demand for leisure travel in the second quarter of 2025, which has resulted in a tough pricing environment for the airline. These and other pressures are expected to persist throughout the remainder of 2025, which has led to uncertainly as to the ongoing operation of the airline.
One way the airline is attempting to save money and conserve cash is to eventually furlough approximately 270 pilots — with an addition 140 pilots being demoted.
The credit card processor of Spirit Airlines has reportedly asked it to set aside more funds as collateral — or risk losing its contract, which is set to expire on Wednesday, December 31, 2025. Members of the management team at the airline plan to bolster liquidity by:
- Selling or monetizing aircraft
- Selling or monetizing real estate
- Reducing excess airport gate capacity
In addition to seeking additional ways to reduce costs, the management team at Spirit Airlines has tried to attract more customers to spend more money by marketing increasingly upscale products.
Failed Merger Attempts
A definitive merger agreement between Frontier Group Holdings, Incorporated and Spirit Airlines, Incorporated — which are the respective parent companies of Frontier Airlines and Spirit Airlines — was announced on Monday, February 7, 2022; and it would have resulted in the creation of the fifth largest airline in the United States once the merger had completed.
However — in a surprise move — JetBlue Airways confirmed on Tuesday, April 5, 2022 that a proposal has been submitted to the board of directors of Spirit Airlines with the intent to acquire the airline for $33.00 per share in cash, which implies a fully diluted equity value of $3.6 billion and providing full and certain value to the shareholders of Spirit Airlines.
A definitive merger agreement between JetBlue Airways Corporation and Spirit Airlines, Incorporated — which are the respective parent companies of JetBlue Airways and Spirit Airlines — was announced on Thursday, July 28, 2022 shortly after the board of directors at Spirit Airlines voted on terminating its merger with Frontier Airlines effective as of Wednesday, July 27, 2022. The combined entities — which was approved by stockholders of Spirit Airlines on Wednesday, October 19, 2022 — was one step closer to creating the fifth largest airline in the United States once the merger was completed.
The Department of Justice of the United States filed a civil antitrust lawsuit on Tuesday, March 7, 2023 to block the acquisition of Spirit Airlines by JetBlue Airways, citing that the result would harm travelers in the United States due to further concentration and consolidation of the commercial aviation industry, which would result in higher fares and fewer choices across the country for tens of millions of travelers.
Instead of becoming the fifth largest airline in the United States, the merger agreement officially terminated between JetBlue Airways and Spirit Airlines was announced on Monday, March 4, 2024.
Final Boarding Call
What all of this means to you as a customer of Spirit Airlines and as a member of the Free Spirit membership program: essentially nothing at the moment, as the airline will operate its business as usual — for now, anyway…
…but do not be complacent about being updated pertaining to the latest news with the airline, as selling aircraft reduces capacity, which typically leads to fewer flights — so expect routes to likely be cut before the end of the year.
Another airline might place a bid to take over Spirit Airlines — but that would mean that the acquiring airline would also be responsible for satisfying the financial issues that Spirit Airlines is currently facing, which is risky.
The assets of Spirit Airlines might instead be sold off to other airlines for cash.
Whatever happens, we will know the answers in the coming months whether the airline will be able to keep its Spirit up…
All photographs ©2018, ©2022, and ©2024 by Brian Cohen.
