Spirit Airlines just cleared a big financial hurdle. What the change means for travelers

Spirit Airlines has cleared its biggest financial hurdle so far, allowing the Broward-based company to continue flying.

The U.S. Bankruptcy Court for the Southern District of New York on Feb. 20 approved the carrier’s plan to continue operating as a business. That’s the most critical and often difficult part of a corporate restructuring.

The approval means Spirit will come out of bankruptcy protection soon and have more certainty over flight operations that affect travelers.

Spirit has more than 60 daily flights at Fort Lauderdale-Hollywood International Airport and more than 30 at Miami International Airport. The bright yellow planes should continue to take off and land as usual, and customers shouldn’t be affected, according to the the airline.

What to know about the end of Spirit’s bankruptcy

“The company expects to emerge from Chapter 11 in the coming weeks,” the carrier said in a statement.

That would be in line with its initially promised target: by March 31. The airline entered the restructuring process with about $3.8 billion in debt, according to court filings.

As part of the agreement, Spirit will convert $795 million of that debt into equity for existing lenders, which include Citadel Advisors, part of billionaire and South Florida resident Kenneth Griffin’s investment behemoth Citadel, and UBS Asset Management.

Talk of bankruptcy can spook the public. In South Florida, it evokes the demise of Pan American World Airways and Eastern Airlines. But many successful companies today, including airlines, have survived and strengthened after filing for Chapter 11 bankruptcy protection. United Airlines did so in 2002, Delta Air Lines in 2005 and American Airlines in 2011. Today, those are the three biggest airlines in the world.

The court-approved restructuring process allows businesses to reduce their debt in exchange for running a leaner operation and changing their shareholders. But it can sometimes be a cut-throat ordeal.

Spirit Airlines passed the restructuring requirements, New York-based Bankruptcy Judge Sean Lane said in the court document.

That’s important because Spirit was FLL’s top airline in 2024, accounting for more than 11 million passengers, nearly one-third of the airport’s total. And the airport has a major expansion underway .

The court’s approval “is a major milestone,” Ted Christie, Spirit’s president and CEO, said in a statement. “We will emerge as a stronger airline with the financial flexibility to continue providing guests with enhanced travel experiences and greater value.”

As part of the agreement, Spirit will receive $350 million of new equity investment.

Company promises

Despite the company optimism, travelers haven’t been told details on what they can expect, other than their tickets would be honored and new reservations could be made.

“Guests can continue to book and fly without interruption,” the airline said in a statement. “Spirit continues to operate its business in the normal course.”

Spirit Airlines filed for bankruptcy protection on Nov. 18 after several failed merger attempts. At that time, the Dania Beach-based company had 12,800 employees nationwide.

The company said then that travelers “can [continue] to book and fly without interruption and can use all tickets credits and loyalty points as normal,” and that they can keep using the company’s Free Spirit loyalty program, Saver$Club benefits and credit card terms.

Spirit also said then that the restructuring process wouldn’t affect wages or benefits.

“They are continuing to be paid and honored,” the carrier said. Vendors will also receive normal payments “in the ordinary course and will not be impaired.”

Caution warranted

Travelers should be a bit skeptical of the company’s claims and should always check with the airline and airports on specific flights or routes. That’s because Spirit now has a smaller workforce, meaning fewer travel options remains a possibility.

In January, the airline laid off 200 people across multiple departments due to the restructuring efforts. That was part of larger cuts made in 2024, including pilot furloughs and “extended voluntary time off programs” for flight attendants. The airline is also closing three of its maintenance centers by March 31, 2025. That all is helping Spirit reduce costs by $80 million.

“Our actions ... and these cost savings are tied directly to the reduction in fleet and less flying in our forward plan,” Spirit’s boss Christie wrote in a Jan. 15 letter to employees.

Even now, Christie said that the airline moving forward “remains focused on reducing costs.”