In November, Spirit Airlines filed for Chapter 11 bankruptcy protection. The icon of U.S. budget air travel hasn't had a profitable year since 2019, and it's lost more than $2 billion since 2020.
How did it get here?
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WATCH HEREThe Covid-19 pandemic was devastating to all airlines, but that was just the start of Spirit's financial woes. The airline industry has faced supply chain problems and rising costs, including higher wages for its tens of thousands of employees. In addition, Spirit has faced a Pratt & Whitney engine recall grounding dozens of its jets, weaker-than-expected sales and a failed merger with JetBlue Airways.
Travelers' preferences have also changed coming out of the pandemic, with many consumers willing to shell out for more space on board or perks like swanky airport lounges, airline executives say. Ultra-low-cost carriers have faced increased competition from legacy carriers like American, Delta and United, who have introduced basic economy fares and segmented cabins to cater to more price points, from low fares to first-class tickets that can reach the mid-four digits.
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Faced with mounting losses and looming debt payments, Spirit furloughed hundreds of pilots and offered salaried workers buyouts. It also sold some of its Airbus fleet and cut routes. Ultimately, it filed for bankruptcy protection on Nov. 18.
Spirit Airlines says it will continue to operate as normal as it works through bankruptcy, a process it said it expects to exit in the first quarter of 2025. Analysts expect the airline to come out of the process a smaller airline with fewer routes.
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