Spirit Airlines Files for Chapter 11, Stock Price Down Over 40%

Spirit Aviation, parent company of Spirit Airlines, has filed for Chapter 11 bankruptcy to facilitate a comprehensive restructuring. The airline's shares fell more than 40% after the announcement. The Chapter 11 filing allows the company to reorganize its debt and operations under court supervision, with the goal of emerging as a stronger, more sustainable business.

Spirit Aviation, the parent company of Spirit Airlines, has filed for Chapter 11 bankruptcy to facilitate a comprehensive restructuring. The airline's shares fell more than 40% after the announcement, reflecting the market's immediate reaction to the financial distress of the budget carrier.

The Chapter 11 filing allows the company to reorganize its debt and operations under court supervision, with the goal of emerging as a stronger, more sustainable business. Spirit Airlines previously filed for bankruptcy in November 2024, exiting court protection in March after exchanging nearly $800 million of corporate debt for equity. However, the airline continued to face significant financial challenges, including high aircraft lease costs and unsustainable debt levels [3].

The decision to file for Chapter 11 marks the second time Spirit Airlines has sought bankruptcy protection in a year. The company has been actively engaged with its largest lessors, secured noteholders, and key stakeholders to refine its restructuring path. The Chapter 11 process will provide Spirit with the tools, time, and flexibility needed to continue ongoing discussions with all of its creditors and other parties [2].

Spirit Aviation expects to be delisted from the NYSE American Stock Exchange in the near term as a result of the Chapter 11 filing. The company's common stock will continue to trade in the over-the-counter marketplace through the restructuring process, with the potential for shares to be cancelled and have no value [2].

The Chapter 11 filing comes as Spirit Airlines continues to struggle with financial sustainability. The airline's inability to secure better financial footing following its previous bankruptcy has led to ongoing losses and a need for significant operational changes. The restructuring process aims to address these issues and position Spirit for a more stable future [1].

References:
[1] https://www.cnbc.com/2025/08/29/spirit-airlines-chapter-11-bankruptcy.html
[2] https://seekingalpha.com/news/4490594-spirit-aviation-shares-fall-more-than-40-as-it-files-for-chapter-11
[3] https://www.wsj.com/business/spirit-bankruptcy-chapter-11-restructure-73f7ed61