Professor Elam

The budget airline emerged from bankruptcy in March, but travel demand among price-sensitive consumers has remained under pressure. It has taken steps to enhance its product in response, including through a premium economy travel in combination with cost-saving measures such as pilot furloughs in July. But the company said it expects pressure on the business to continue for the remainder of 2025.

“After considering the measures taken, minimum-liquidity covenants in the company’s debt obligations and credit-card processing agreement require financial results to improve at a rate faster than what the company is currently anticipating,” Spirit said in a securities filing. It added that it would take additional steps to raise liquidity.

Spirit said that given the uncertainty of successfully completing initiatives to comply with certain liquidity requirements, it has concluded there is substantial doubt regarding its ability to continue as a going concern within 12 months from Aug. 11, the day of its disclosure.

Shares of other airlines rallied as investors anticipated rival carriers could benefit from reduced competition if Spirit is unable to operate or has to scale back further. Rival budget airlines saw the biggest gains. Shares of Frontier Group Holdings, the parent of Frontier Airlines, rose 24%.