Back in trouble
Spirit Airlines finds itself back in the news for a reason no one would like to see: it has filed for Chapter 11 bankruptcy—again. This is the second time in less than two years that the ultra-low-cost carrier has taken this step, prompting fresh questions about the health of the U.S. airline industry.
The airline would not disclose figures for financing or its restructuring strategy, and everyone is left speculating how this will affect passengers and rivals.
Contracting routes and lower seats
Spirit already cut very drastically. In the second quarter of 2025, its capacity fell by 24.5% compared to last year. The airline is projecting even larger cuts: 26.5% in the third quarter and 12.8% in the fourth.
Its share of its domestic market is now only 4%, down from 5.3% in 2023. Spirit promises to concentrate on important hubs such as Fort Lauderdale, Orlando, and Detroit and provide more flights and connections there and cut service elsewhere.
For passengers, this could result in reduced choices and less flexibility in smaller cities or secondary markets.
How the market reacted last time
Spirit’s first bankruptcy in November 2024 sent shockwaves through the aviation sector. Frontier shares dipped 18%, JetBlue dropped 9.5%, and Alaska and Sun Country performed better in the months that followed.
Analysts warn that history won’t repeat itself this time. The 2025 earnings estimates are lower board-wide: United and Delta are experiencing declines of 15% and 22%, and Frontier and JetBlue are experiencing declines in excess of 200%.
Exposure to competition also varies. Frontier most overlaps with Spirit, 40%, while JetBlue has 12% and Southwest only 7%. United, American, and Allegiant are approximately 4–5%, and Hawaiian has zero.
Airport hotspots
Spirit’s retreat is best apparent at its hubs. At Fort Lauderdale, Spirit has 26% of seats, followed by JetBlue with 21% and Delta with 12%. In Orlando, Southwest leads with 19%, while Spirit, Delta, and JetBlue are each at about 9%.
In Las Vegas, Spirit has trailed back to 9%, behind Southwest at 31%. Detroit is still dominated by Delta at 71%, though Spirit grew there 19% this year. In Los Angeles, Spirit has only 2% of seats now, with United and Delta each holding 13%.
Industry context
The airline sector is getting mixed signals. Domestic capacity fell in negative in August, fares have moderately increased, and jet fuel prices are coming back to earth. Spirit bankruptcy might be a welcome sign for other airlines, according to Wolfe Research analysts, but they point out Spirit represents a minuscule slice of the pie—4%—of the market.
Performance to date through 2025 has been weak. The Wolfe Airline Index is off 14% year-to-date, trailing the S&P 500, which is up 10%. Lower airlines like Spirit remain a segment of total industry share: Delta 19.6%, United 18.3%, American 20.5%, Southwest 17.9%, Spirit 4%.
What travelers can expect
Spirit has already reduced capacity in 2025 by 20–30% and is currently suggesting another 13% cut in the fourth quarter. For customers, it can mean fewer seats available, more delays, and even higher fares on routes Spirit eliminates.
History has shown that carriers like Frontier and Sun Country have dropped precipitously after Chapter 11 but recovered to expansion within two years. Spirit’s fate—and the flying public’s experience—will depend upon the results of its restructuring.
Travellers making use of Spirit in the interim need to stay flexible, keep an eye out for route adjustments, and double-check flights prior to buying, since doubt will likely continue for quite a while.
ion that is even more focused on how bankruptcy affects people flying on Spirit. Would you prefer me to do this?
If you want more updated retail news, follow polifinus.com
Nationwide egg recall: life-threatening salmonella outbreak hits 14 states
Good news for fans of Trader Joe’s: 41 new stores coming nationwide
