Following recent financial uncertainty, Spirit Airlines has appealed to its investors that it is currently running the serious risk of having its funds dry up within the next year. While the ultra-low-cost carrier has seen some growth in recent times, with various new routes launched, other areas have been subjected to significant cuts.
Now, the airline, which has also recently had to contend with aircraft groundings due to engine issues, as well as Chapter 11 Bankruptcy Protection, has confirmed to its investors that it holds serious doubts as to its ability to continue operating beyond the next year. Spirit is not alone among US carriers facing financial struggles, and even legacy giants are expecting to plateau this year amid lower demand.
Spirit Airlines May Run Out Of Cash Within A Year
Yesterday, Spirit Airlines issued a 10-Q quarterly report, which was published on the investor relations section of its website. This lengthy 222-page SEC filing consisted of a wide variety of financial data, with a key indication of the carrier’s fortunes being the fact that its Q2 operating revenue dropped by almost 25.5% year-on-year, from $1.28 billion in the second quarter of 2024 to $1.02 billion this time
This, offset against higher operating expenses and other key figures, resulted in a net loss of more than $245,000 for the quarter, compared to almost $193,000 in Q2 of 2024. It seems that this is a trend that cannot continue, with the airline subsequently appealing to its investors that it risks running out of cash. It said:
Running Out Of Cash Would Risk Spirit Breaching Its Debt Agreements
Long-time Simple Flying readers will remember that the last year has seen Spirit Airlines come in and out of Chapter 11 bankruptcy. The carrier filed for such protection in November of last year, just days after postponing its Q3 report amid debt negotiations. According to AeroTime, these proceedings were a success, with Spirit reducing $795 million of debts before exiting bankruptcy in March 2025.
However, in the months that have followed, the yellow-clad ultra-low-cost carrier has faced further financial uncertainty, with tariffs causing it to consider canceling Airbus orders. This would be bad news for its fleet, just as the need to ground aircraft due to Pratt & Whitney engine issues already has been. With its summer capacity down by 26%, Spirit has also had to furlough hundreds of its pilots.
To address its challenges, Spirit has implemented “network and product enhancements, (…) [the] consummation of sale-leaseback transactions related to certain of its owned spare engines, and other discretionary cost reduction strategies.” However, it warns that, if unsuccessful, it would “be unable to comply with the minimum liquidity covenants under the Company’s debt obligations.”
Why Did Spirit Airlines Struggle In The Second Quarter
According to CNBC, Spirit Airlines has cited “adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel in the second quarter of 2025” as being key reasons behind its financial struggles in Q2. This, it says, has resulted “in a challenging pricing environment.”
Spirit is far from the only US-based airline to have faced financial struggles in recent months. Indeed, AeroTime reports that even the country’s major legacy carriers have not been immune to such uncertainty. For instance, the publication notes that American and Delta expect no year-on-year growth in 2025’s profits
With Spirit’s current financial performance levels unable to cover the overheads required by its creditors’ agreements, the carrier has been left with no choice but to ask its investors for extra cash before time runs out, which it fears could happen within a year. Only time will tell whether this will be enough to stem the flow.
