The Air Show

Spirit goes back to bankruptcy

Sep 11, 2025
Spirit Airlines faces bankruptcy for the second time, raising questions about the future of the U.S. airline industry. The discussion covers the airline's financial struggles, including cash depletion and investor confidence. As Spirit tries to navigate its recovery plan, they explore challenges like operational hurdles and ongoing competition. With potential mergers on the horizon, the hosts debate the sustainability of Spirit's business model and the implications of capacity reductions on their market strategy.
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INSIGHT

Bankruptcy Recurrence Signals Deep Problems

  • Spirit refiled for bankruptcy months after emerging, showing prior restructuring failed to fix core problems.
  • The rapid deterioration suggests the airline never materially addressed its cost structure or network weaknesses.
INSIGHT

Liquidity Was Tight Despite Apparent Cash Moves

  • Operational and liquidity moves (engine sales, maxed credit line) masked deeper cash strain at Spirit.
  • Card-processor demands and holdbacks created daily cash pressure that forced swift protective action.
INSIGHT

Nonexistent Planes Triggered The Filing

  • A lease default claim over future-delivery slots from lessor AirCap precipitated the filing on that specific day.
  • Spirit could face $2.1M per undelivered aircraft default exposure, creating sizable contingent liabilities.
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