On Friday, Spirit Airlines filed for Chapter 11 for the second time in less than a year. While Spirit is not under coverage, we summarize information provided thus far and highlight exposure for the various lessors.
According to Spirit’s bankruptcy filing, the Company intends to shed billions of dollars in liabilities and will use Chapter 11 to transition to a sustainable future and position itself to deliver the “best value in the sky” for years to come. While the last bankruptcy filing equitized $800mn of debt and injected $350mn of liquidity through an equity offering, this time it appears to be more of a hatchet approach. The filing blamed Southwest for slashing pricing on domestic routes as that airline navigates changes to its business model, and stated that American, Delta, and United have sought to take share from low-fare carriers through expanded basic economy service, as business travel has not recovered to pre-COVID levels. In July and August 2025, Spirit completed a series of sale-leaseback transactions with respect to 14 spare engines, resulting in net cash proceeds of about $250mn.