Spirit Airlines just dropped a financial bombshell—a bleak warning about its survival, leaving little doubt that the airline may not make it through the next year without drastic change or another rescue. We should never have reached this point.

Spirit Airlines Sounds Dire Survival Alarm As Cash Crisis Looms

Spirit’s latest SEC filing includes a chilling formal statement from management:

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

It’s not often that a public company so openly states that it may not exist in a year, but Spirit has broken that silence. The warning underscores failed turnaround efforts, dwindling liquidity, and heavy debt. The warning echoes what I noted back in 2023…that this might end very poorly for Spirit.

Let’s revisit my earlier post deconstructing Judge William Young’s decision to block the merger with JetBlue. I observed then that the activist ruling was detached from market reality and more importantly, fundamentally misconstured the Clayton Act. The judge seemingly refused to see the obvious: Spirit needed scale or capital, and blocking the merger with JetBlue choked both and did nothing to preserve competition.

At the time, I wrote:

The keyword here is substantial. Would there be a “substantial lessening of competition” because of this merger? I don’t see this proven by the US Government or its expert witnesses. Rather, I see such forecasts as inconclusive and therefore unpersuasive. There remains tremendous competition in the US airline industry…the status quo cannot continue if both JetBlue and Spirit continue to lose money.

Fast-forward, and it’s not Spirit shareholders or boards issuing the warning…it’s Spirit’s management. The judge’s logic has aged horribly. His decision may well go down in travel industry history as the ruling that helped push Spirit Airlines into a death spiral. And the latest Q2 2025 numbers are grim:

As JetBlue, Frontier, and Spirit flounder, I’m not sure what the solution is, if any, at this point. But whatever happens, I see consolidation as the only path to survival.

And while I’d love to see Northwest, US Airways, Continental, and Virgin America still operating as independent carriers, airfare has dramatically dropped in price over the years…at least in terms of pricing, we are in a golden age.

I’m Rooting For Spirit…

I may poke fun at some of the Spirit clientele, but I’m rooting for Spirit Airlines…I always root for competition in the airline marketplace. But it has become clear over the last several months that the Spirit business model is no longer tenable. As Spirit faces difficulty in renewing a contract with its credit card processor over reasonable chargeback fears, the carriers’ decline will only accelerate because this news will stop people from purchasing tickets more than a month or two in advance.

Frankly, I don’t see how Spirit can make it…consumer preference ash changed and the legacy carriers have done a superior job offering a wide range of products, including basic economy that, even if a tad more expensive, often offers a superior value proposition to Spirit.

Even so, Spirit keeps pricing in check on other carriers and offers valuable competition in an environment in which network carriers are salivating for budget carriers to fail so that they can raise prices.

I don’t know what to say at this point other than I hope that Frontier or JetBlue can still find a way to acquire Spirit aircraft, routes, personnel, and other assets to more meaningfully compete with other carriers. I don’t believe the success of Ryanair or EasyJet is unique to Europe…I do believe there is a market for budget carriers in the USA, but the high cost of doing business at major airports and rising labor costs makes it far more difficult here than across the Atlantic.

CONCLUSION

Spirit Airlines is officially on life support. The candid disclosure of “substantial doubt” is a rare and dire message. Unless something changes fast, like a merger deal, investment lifeline, or operational windfall (all of which are highly unlikely), we may be watching the final chapter of Spirit Airlines’ independent identity. Let’s hope the embers of its once-proud ultra-low-cost model can survive this winter, but it’s not looking good right now.