Spirit Airlines nears crisis as bailout talks continue, cash runs low

If Spirit Airlines runs out of cash, travelers could see canceled flights, stranded passengers and fewer cheap seats on some of the country’s busiest routes. Workers would face the deeper blow: possible furloughs, layoffs and another bankruptcy fight at a carrier that already went through Chapter 11 once before.

The carrier said on April 29 that no bankruptcy hearing would be held that Thursday while talks continued over the terms of a potential $500 million U.S. government rescue. Spirit also said lenders had not yet filed a notice that could start a seven-business-day clock toward liquidation of its assets. Multiple sources said the company had only days of cash on hand to keep operating.

Spirit Aviation Holdings filed a restructuring support agreement and plan of reorganization on March 13 in the U.S. Bankruptcy Court for the Southern District of New York. The company said it expected to emerge from Chapter 11 by early summer and reduce its debt and lease obligations from $7.4 billion before filing to about $2 billion after emergence.

The stakes extend beyond one airline balance sheet. Spirit is one of the largest ultra-low-cost carriers in the United States, and a collapse would remove a major source of pressure on fares at a time when many travelers are already sensitive to ticket prices and fees. Its flights out of Fort Lauderdale and other low-cost markets have long helped set the floor for bargain travel.

The company’s distress has also exposed how fragile the ultra-low-cost model can be when costs move against it. Rising jet fuel prices have strained the assumptions behind Spirit’s restructuring, and the carrier’s stock had fallen to around $1.50 in OTC trading by late April, a sign of how little confidence the market has in its survival.

President Donald Trump has publicly floated the idea of a taxpayer takeover followed by a later resale of the airline. Labor unions, including the International Association of Machinists and Aerospace Workers, have pushed back, saying any bailout should protect employees and avoid furloughs or layoffs. The political fight underscores how quickly a private airline failure can become a policy debate over jobs, competition and whether Washington should ever step in to save a distressed carrier.

Spirit’s troubles are not new. The airline filed for bankruptcy in November 2024 and exited Chapter 11 in March 2025 after converting roughly $795 million of debt into equity and securing additional investor support. Now the carrier is back in court with a far thinner margin for error, and with every passing day the odds of a last-minute rescue look more precarious.