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Spirit Airlines is in a dire financial state, and as the carrier is undergoing restructuring in its second Chapter 11 bankruptcy filing within a year, it’s running out of funding to do so. The Air Line Pilots Association (ALPA) has published a letter on January 14 requesting Spirit’s bondholders to continue funding. The letter states that the carrier is making steady progress on its restructuring and that the people working for Spirit are relying on a new round of funding.
Spirit Airlines is one of the most prominent budget airlines in the United States, but it’s been experiencing struggles since the COVID-19 pandemic. All low-cost and ultra-low-cost carriers have generally been experiencing financial turmoil, but Spirit has been recording the worst results of them all. The carrier has slashed its fleet, cut its workforce, pared back its network, filed for bankruptcy twice, and is possibly facing liquidation now.
ALPA Requesting Bondholders To Continue Funding
ALPA has published an open letter to Spirit Airlines’ bondholders on behalf of Spirit pilots and other frontline workers in regards to the carrier’s bankruptcy restructuring. The union is specifically requesting that the bondholders, such as Miami-based firm Citadel, continue funding Spirit Airlines as it works to restructure under the current Chapter 11 bankruptcy proceedings.
The union, which represents roughly 3,000 pilots working for Spirit, is stating that the carrier has completed much of the restructuring necessary. As a labor union, ALPA’s primary concern is preserving jobs at the airline, and it specifically highlights the impact that a liquidation would have. In other words, ALPA is advocating for continuous funding to secure current jobs at the carrier and making a case as to why the bondholders should continue funding Spirit.
The below except explains the ramifications of a liquidation as a result of a halt in funding:
“Liquidation would not be just a business outcome. It would mean a collapse that would eliminate jobs and permanently disrupt a community. If Spirit is liquidated, thousands of employees will lose their livelihoods. South Florida will lose one of its most important homegrown aviation employers. Families will be displaced. Small businesses connected to travel and aviation will suffer immediate harm. The regional and national ripple effects will be real and long-lasting. A preventable airline shutdown on this scale would also reduce competition in air travel nationwide, leading to fewer choices and higher fares for travelers.”
What’s The Situation With Spirit Airlines
Spirit Airlines, one of the larger budget airlines in the United States, is currently in Chapter 11 bankruptcy proceedings. Chapter 11 is essentially a restructuring program that allows businesses to reorganize their finances to better repay creditors over time, while continuing operations. From a customer’s perspective, it’s often business as usual, although Spirit Airlines has significantly cut its fleet and network as part of its restructuring.
ALPA is concerned with the possibility of Spirit Airlines liquidating. Essentially, the airline ceases all operations and ceases to be a legal entity, while all employees effectively lose their jobs. While liquidations do occur often in the airline industry, the United States has not seen a large airline liquidate since 1991, when both Eastern Air Lines and Pan Am ceased all operations.
For Spirit to successfully exit Chapter 11, it requires continuous funding from its bondholders. With this current letter, it would appear as though funding is becoming more limited or in question. The open letter from ALPA focuses mainly on the labor impact, as well as the consequences on the Florida economy (where Spirit Airlines is based).
Did Spirit Airlines Emerge From Bankruptcy Protection Too Soon?
Indeed, Spirit emerged from bankruptcy protection earlier than expected on the assumption that it could stabilize quickly.
What’s Ahead For Spirit Airlines
It’s been nearly 35 years since a large airline liquidated in the United States, which makes the idea of Spirit ceasing all operations less realistic. What’s more likely is that the airline will either attract more funding or another airline will acquire it.
Frontier Airlines renewed merger discussions with Spirit Airlines in December 2025. Prior recent discussions did not materialize any tangible results, but Spirit’s mounting losses and difficulty with acquiring more funding could push it into a merger with Frontier. With the carrier’s financial struggles and a competitive business environment increasingly hostile to budget airlines, this may be the only path forward for Spirit and its employees.
