Spirit Airlines Warns Possible Collapse Within Year Amid Financial Struggles

Spirit Airlines has issued urgent warnings expressing substantial doubt about its ability to continue as a going concern within the next 12 months, citing ongoing financial distress despite recently emerging from Chapter 11 bankruptcy. The airline faces challenges including rising labor costs, weak demand for domestic leisure travel, and pressure to heavily discount fares, which have hampered its revenue and profitability. Additionally, Spirit's credit card processing vendor demands increased collateral to renew their agreement, potentially causing a significant reduction in the airline's unrestricted cash. To address these issues, Spirit is pursuing cost-cutting measures such as furloughing pilots, introducing premium seating, and selling assets like aircraft engines and airport gate rights. The company's turnaround plans have not yielded the expected results, and failure to meet liquidity covenants could trigger defaults on its debt agreements, further threatening its survival. Regulatory actions, such as the blocked JetBlue acquisition, and shifting consumer preferences toward premium travel have compounded Spirit's difficulties, leaving its future in jeopardy despite efforts to stabilize its finances.