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Struggling low-cost carrier Spirit Airlines is preparing for major job cuts and a 25% year-over-year capacity reduction starting in November, according to an internal memo. The drastic move underscores the airline’s ongoing financial troubles and marks its second bankruptcy filing in less than a year. This has also raised serious questions about the future of the low-cost travel model in the United States.
The restructuring plan, which was first reported by CNBC, is expected to involve meetings with union leaders in the coming weeks as the airline evaluates its fleet size and operational strategy. While the memo did not specify the number of jobs to be eliminated, CEO Dave Davis warned employees that workforce reductions will be a critical part of the cost-cutting initiative.
Spirit Airlines filed for bankruptcy protection again in late August (just five months after emerging from its previous Chapter 11 process in March). The earlier restructuring focused largely on a debt-for-equity swap with bondholders. This exchanged $800 million in debt for company shares, but failed to produce meaningful operational changes. Since exiting its first bankruptcy, Spirit has reported a $257 million loss between March 13th and June 30th. This was driven by rising costs and weaker-than-expected demand for domestic travel. Last month, I wrote about how the airline also cut flights to 11 cities. This left gaps that United Airlines quickly moved to fill. United has ruled out acquiring Spirit’s assets (even as parts of the discount carrier are expected to hit the market during the restructuring process).
The 25% reduction in flight capacity marks one of the largest cutbacks in Spirit’s history and mirrors a similar decline seen earlier this year following the first bankruptcy. The internal memo indicated that job cuts will accompany the schedule reduction. At the start of 2025, roughly 200 employees were laid off as Spirit explored options to escape bankruptcy. Additional layoffs are now expected as the carrier reevaluates its fleet size. The meetings with union leaders in the coming weeks will likely focus on workforce implications and possible concessions to help Spirit navigate its financial crisis.
Spirit’s struggles highlight a broader shift in the US airline industry. Many carriers are pivoting toward premium travel offerings and higher-margin services. With legacy airlines like Delta, American, and United competing aggressively for premium customers, Spirit’s ultra-low-cost approach has faced mounting pressure. The crisis has sparked concerns that the era of ultra-cheap flights may be coming to an end, leaving price-conscious travelers with fewer options. Industry analysts warn that Spirit’s difficulties could serve as a bellwether for other budget carriers, particularly as travel demand softens and operating costs continue to climb.
Anthony’s Take: I am a fan of Spirit Airlines and hope that they can navigate this new chapter. It’s not looking good, but only time will tell how this all plays out.
(Image Credits: Spirit Airlines.)
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Advertiser & Editorial Disclosure: The Bulkhead Seat earns an affiliate commission for anyone approved through the links above This compensation may impact how and where links appear on this site. We work to provide the best publicly available offers to our readers. We frequently update them, but this site does not include all available offers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.
