Spirit Airlines could liquidate as early as this week, sources say

Spirit Airlines could be liquidated as early as this week, according to people familiar with the matter.

They spoke on condition of anonymity to discuss matters not yet publicly disclosed.

The budget carrier is trying to get back on its feet after its second bankruptcy in less than a year, but it now faces an additional challenge in the form of a rise in fuel prices. Fuel is airlines’ biggest expense after labor.

“We do not comment on market rumors and speculation,” Spirit said in a statement.

The exact day the carrier could begin liquidating was not immediately clear. Bloomberg had previously reported on the potential liquidation.

The news comes as the U.S. airline industry, including Florida-based Spirit, wraps up its busy spring break season.

Pilot and flight attendant unions had made concessions in recent months to help Spirit survive. The airline had planned to downsize and focus on high-demand travel periods and routes, with the aim of emerging from bankruptcy this spring.

Spirit has enjoyed largely consistent profitability and industry-enviable margins for years. But after the pandemic, things turned around; When fares and other costs rose, customer preferences changed and an oversupply of domestic flights drove airfares down; This was especially punishing for US-focused carriers, who were unable to take advantage of luxurious first-class cabins and great credit card and loyalty program deals.

The problems snowballed after a Pratt & Whitney engine recall grounded dozens of Airbus planes starting in 2023 and was planned to be acquired by Airbus. JetBlue Airlines It was blocked by a federal judge two years ago, ruling it anticompetitive, and both carriers were left to fend for themselves in an environment dominated by larger carriers.

Spirit forecasts net profit of $252 million last year, according to a report application to court in December 2024, but A report in August said: It said it lost about $257 million in the few months from March 13 to the end of June after emerging from its first Chapter 11 bankruptcy. Less than a month later, he filed again for Chapter 11 bankruptcy protection.

The airline has sought to win over higher-spending customers in recent years by offering wider seats or package fares that include seat assignments and luggage to better compete with larger rivals that profit from big-spending customers post-pandemic.