Commercial Aviation
Spirit Airlines Secures $100M Financing During Second Bankruptcy
Spirit Airlines obtains $100 million debtor-in-possession financing to support operations amid its second Chapter 11 bankruptcy in 12 months.
This article summarizes reporting by Reuters.
Spirit Airlines (OTC: FLYYQ) has successfully secured $100 million in new debtor-in-possession (DIP) financing, a critical step in stabilizing its operations as it navigates its second Chapter 11 bankruptcy proceeding in less than a year. According to reporting by Reuters, the funding agreement was finalized on December 15, 2025, providing the ultra-low-cost carrier with immediate liquidity to maintain flight schedules and pay vendors.
The financing comes at a pivotal moment for the airline, which has faced intense speculation regarding a potential shutdown. Reports from The Air Current earlier this week indicated that competitors had begun preparing contingency plans for stranded passengers, fearing Spirit might face liquidation. However, this new capital injection appears to have averted an immediate crisis, allowing the airline to continue “business as usual” for the time being.
While the funding provides a short-term runway, the terms attached to the capital suggest that Spirit’s future may involve significant structural changes, including a potential sale or breakup of the company.
The $100 million financing package is structured in two distinct tranches, designed to incentivize the airline to move quickly toward a resolution of its financial distress.
According to court filings cited in the research, the first $50 million is available immediately. This capital is designated for essential daily operations, including employee wages, fuel costs, and vendor payments. The remaining $50 million is conditional; to access it, Spirit must demonstrate tangible progress toward a “strategic transaction”, such as a merger or asset sale, or a standalone reorganization plan.
The financing is backed by a group of senior secured noteholders. Industry reports identify these lenders as major investment firms including Citadel Advisors, PIMCO, and Western Asset Management. These groups were also key players in Spirit’s previous restructuring efforts.
Spirit’s current financial situation is highly unusual for a major U.S. carrier. The airline is currently working through its second Chapter 11 filing within a 12-month period. “We are grateful to our lenders for continuing to support Spirit’s transformation… We continue to provide high-value travel options, which benefit American consumers whether they fly with us or not.”
, Dave Davis, CEO of Spirit Airlines (via Press Release)
The conditionality of the second funding tranche has intensified speculation that Spirit may be forced to sell off key assets or merge with another entity to survive.
Competitors have already begun acquiring pieces of Spirit’s operation. In early December 2025, American Airlines paid $30 million to acquire two of Spirit’s gates at Chicago O’Hare International Airport (ORD). Furthermore, court filings indicate that American has requested to receive all notices in the bankruptcy proceedings, signaling potential interest in further acquisitions should Spirit liquidate or downsize.
The requirement for a “strategic transaction” to unlock the second half of the DIP financing is a telling detail. It suggests that lenders may have limited confidence in Spirit’s ability to survive solely as a standalone entity under its current business model. With the blocked JetBlue merger still casting a long shadow over the airline’s strategy, the pressure is now on Spirit to find a buyer or a partner, potentially Frontier Airlines, before the liquidity runs dry. The sale of the O’Hare gates to American Airlines may be the first domino in a larger dismantling of the carrier’s assets if a holistic rescue plan cannot be formulated quickly.
Spirit’s struggles are compounded by broader industry headwinds. The airline has been severely impacted by supply chain disruptions, specifically related to U.S.-China trade tensions, which have caused shortages of engines and parts. This has forced the grounding of aircraft, limiting the airline’s capacity to generate revenue.
Additionally, legacy carriers like United, Delta, and American have successfully deployed “Basic Economy” fares to compete directly with Spirit on price, eroding the budget carrier’s primary competitive advantage. In response to these pressures, Spirit has furloughed approximately 1,800 flight attendants and significantly reduced its route network.
Yes. Spirit Airlines has confirmed that flights, ticket sales, and loyalty programs remain fully operational. The new financing is intended to support normal operations.
While the current funding aims to prevent liquidation, passengers should monitor the situation. If an airline ceases operations, other carriers often offer “rescue fares,” and credit card chargebacks are typically an option for unflown segments. The airline emerged from its first bankruptcy with reduced debt but continued to face operational headwinds, including engine recalls, high labor costs, and fierce competition, which depleted its cash reserves faster than anticipated.
Spirit Airlines Secures $100 Million Lifeline Amidst Second Bankruptcy Filing
Details of the Financing Package
Immediate vs. Conditional Funds
The Lenders
A “Double Bankruptcy” Crisis
Strategic Implications and Asset Sales
American Airlines Acquires Gates
AirPro News Analysis
Industry Context and Operational Challenges
Frequently Asked Questions
Is Spirit Airlines still flying?
What happens to my ticket if the airline liquidates?
Why did Spirit file for bankruptcy twice?
Sources
Photo Credit: Spirit Airlines