Spirit Airlines warns it might not be able to survive a year without more cash

Spirit Airlines has warned it might not be able to survive a year as a going concern if it doesn’t raise more cash, five months after the budget travel icon emerged from bankruptcy.

After cutting its debt by converting $795 million to equity during restructuring, Spirit has tried to attract bookings by marketing more upscale products and looking for new ways to lower costs. Late last month, the airline announced plans to furlough 270 more pilots this fall.

“However, the Company has continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel in the second quarter of 2025, resulting in a challenging pricing environment,” the company said in its quarterly report late Monday.

Bookings this year for domestic flights have come in lower than what airlines had hoped at the start of 2025.

As its financial results aren’t improving at the same pace creditors agreements require, Spirit will need additional cash. Failing to do so could result in defaults. The carrier is looking at selling some aircraft, real estate or access to airport gates, it said.

“Because of the uncertainty of successfully completing the initiatives to comply with the minimum liquidity covenants and of the outcome of discussions with Company stakeholders, management has concluded there is substantial doubt as to the Company’s ability to continue as a going concern within 12 months from the date these financial statements are issued,” it said in the filing.

The carrier said its credit card processor is seeking more collateral to renew its processing agreement, which expires on Dec. 31.

CEO Dave Davis on Tuesday expressed confidence to the airline’s staff about Spirit’s changes, like rethinking unprofitable flying and growing in stronger markets.

In a memo to employees, which was seen bc CNBC, Davis said the going-concern warning “is a phrase required by our outside auditors to convey that there is risk if we do not make changes. But, we are.”

Spirit’s bankruptcy last November was the first for a major U.S. airline since 2011.

Known for its bright yellow planes, Spirit was a budget airline pioneer in the U.S., but struggled in the wake of a failed acquisition by JetBlue Airways last year, shifting consumer tastes to more upmarket products and an engine recall that grounded many of its airplanes. Post-pandemic travel trends, including a surge in international trips and more upscale seats, have been particularly punishing for budget airlines that are largely focused on U.S. travel.