Spirit Secures $475M Lifeline in Bankruptcy Court

‍DALLAS — On October 10, 2025, a U.S. bankruptcy court approved US$475 million in debtor-in-possession (DIP) financing to keep Spirit Airlines (NK) operational during its second Chapter 11 reorganization in under a year.

In addition, NK struck a US$150 million settlement with aircraft lessor AerCap, which will permit Spirit to reject 27 existing aircraft leases.

Of the DIP package, $S200 million is immediately available to support operations. Under the deal with AerCap, NK will relinquish rights to certain deliveries and leases, in effect shedding costly fleet commitments.

Challenges & Restructuring Moves

• Spirit has been aggressively cutting costs: it plans to furlough about one-third of its flight attendants, reduce its fleet by half, and trim underperforming routes totalling a quarter of its flights.
• The airline is negotiating with its pilots’ union to secure further cost reductions, targeting roughly US$100 million in cuts.
• Its financial crisis reflects broader pressures: rising labor and operational costs, a blocked merger with JetBlue, and shifting consumer demand favoring more premium offerings over ultra-low cost models.

Outlook & Risks

While the court’s approval is a critical lifeline, Spirit’s survival is still uncertain. The airline now must execute its restructuring plan, stabilize cash flows, and reestablish market credibility. 

The scale of its cost cuts and operational retrenchment suggests a much leaner, risk-averse version of itself going forward.