Spirit Airlines: Bankruptcy Docket and Second Chapter 11

Spirit Airlines filed for chapter 11 bankruptcy on November 18, 2024, in the U.S. Bankruptcy Court for the Southern District of New York after the Department of Justice blocked its $3.8 billion merger with JetBlue. The first case was a prepackaged restructuring that converted approximately $795 million of debt to equity and closed in 114 days. Five months after emergence, Spirit Aviation Holdings, Inc. returned to bankruptcy court on August 29, 2025, after AerCap Holdings terminated aircraft leases and a credit card processor drained liquidity. On March 13, 2026, Spirit filed a Restructuring Support Agreement and Plan of Reorganization, targeting emergence by early summer 2026 with total debt and lease obligations reduced from $7.4 billion to approximately $2 billion. That reorganization path failed. On May 2, 2026, Spirit announced an immediate orderly wind-down of operations, cancelled all flights, and told customers not to go to the airport.

Debtor(s)	Spirit Aviation Holdings, Inc. (+ affiliates, including Spirit Airlines, LLC)
Case Number	24-11988 (first case); 25-11897 (second case)
Court	U.S. Bankruptcy Court, Southern District of New York
Judge	Hon. Sean H. Lane
Petition Date	November 18, 2024 (first case); August 29, 2025 (second case)
First Case Confirmation	February 20, 2025
First Case Effective Date	March 12, 2025
Total Debt (Second Filing)	~$2.8 billion funded debt; ~$5 billion lease obligations
DIP Facility (Second Case)	$1.225 billion ($475 million new money + $750 million roll-up); Barclays Bank PLC as fronting lender
Claims Agent	Epiq Corporate Restructuring, LLC
Current Status	Orderly wind-down announced May 2, 2026; all flights cancelled

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Spirit Airlines Bankruptcy Docket: What to Watch

The Spirit Airlines bankruptcy docket is unusual because it contains two chapter 11 cases within less than a year: the first case, filed under lead case number 24-11988, and the second case, filed under lead case number 25-11897. For docket review, the second case carries the live restructuring record: the final DIP order, AerCap restructuring term sheet, examiner report, Section 1110 fleet order, aircraft sale bidding procedures motion, and March 2026 RSA and plan filing. The key post-plan development is no longer emergence; it is Spirit's May 2, 2026 company-announced wind-down, which cancelled all flights after the company said fuel prices and liquidity pressure left no go-forward financing available.

Causes of Distress and Failed Mergers

ULCC competitive pressures. Spirit developed the ultra-low-cost carrier model in the U.S., offering low base fares while charging separately for services such as carry-on bags and seat selection. The model depended on maintaining a fare differential with legacy carriers, but that differential narrowed as Delta, United, and American introduced basic economy products competing directly on price. Southwest Airlines also slashed domestic pricing in response to its own operational challenges, further depressing Spirit's core leisure travel segment. Fuel and labor costs increased faster than ticket prices, compressing margins. Spirit negotiated new contracts with flight attendant and pilot unions that increased labor costs as revenue pressures mounted.

Frontier Airlines bid (2022). In February 2022, Frontier Airlines agreed to acquire Spirit for $2.9 billion in a transaction that would have created the fifth-largest U.S. carrier. JetBlue Airways intervened with a competing offer, and Frontier withdrew after repeatedly increasing its offer failed to secure shareholder support.

JetBlue Airways acquisition attempt (2022--2024). Spirit's board accepted JetBlue's $3.8 billion offer, triggering regulatory review. In March 2023, the Department of Justice filed suit to block the merger on antitrust grounds. A federal judge blocked the acquisition in January 2024, and the merger agreement was terminated in March 2024.

Financial deterioration and engine groundings. Spirit accumulated approximately $2.5 billion in losses from 2020 through 2024, with losses reported in every quarter following the COVID-19 pandemic. Spirit also faced operational disruptions from Pratt & Whitney GTF engine inspections that required grounding aircraft. The issue affected approximately 25 A320neos in 2024. As of the second filing in August 2025, 38 GTF-powered aircraft were grounded, with nearly all 79 GTF engines expected to require inspection and repair within two years.

First Chapter 11 Case (November 2024 -- March 2025)

Spirit's first bankruptcy was structured as a prepackaged case, supported by holders of over 75% of senior secured notes before filing. The confirmed plan converted approximately $795 million in senior secured notes to equity. Bondholders became majority equity owners of the reorganized company, with a new board of directors appointed representing bondholder interests. Existing shareholders were wiped out and Spirit's stock was delisted from the NYSE. Spirit committed to $350 million in new equity financing and emerged on March 12, 2025, 114 days after filing.

Davis Polk & Wardwell LLP served as debtors' counsel, with Alvarez & Marsal as restructuring advisor and Epiq Corporate Restructuring, LLC as claims and noticing agent. Willkie Farr & Gallagher LLP served as committee counsel.

Post-Emergence Collapse and Second Filing

CEO departure and operational contraction. In April 2025, approximately one month after emergence, CEO Ted Christie resigned. Spirit reduced service to multiple airports and cancelled all routes to 12 cities, concentrating operations on higher-yield routes from Florida bases. Spirit also cancelled outstanding Airbus aircraft orders for 52 A320neo family aircraft and 10 options. In August 2025, Spirit disclosed going-concern doubts months after emergence.

Elavon credit card processor liquidity drain. Spirit's primary credit card processor, Elavon (an affiliate of U.S. Bank National Association), required Spirit to provide substantial additional collateral. On August 15, 2025, Spirit transferred $50 million in cash to a pledged account. On August 20, Elavon imposed a holdback of up to $3 million per day until its exposure was fully collateralized. These provisions drained Spirit's operating liquidity in the weeks before filing, according to the Cromer declaration.

AerCap lease terminations. On August 25, 2025 -- four days before the second petition -- AerCap sent lease termination notices covering 36 undelivered aircraft (2027--2028 deliveries) and a default notice on 37 aircraft in Spirit's existing fleet. Spirit filed out of concern that disclosing the notices would prompt other counterparties to take adverse action, according to the Cromer declaration. Spirit drew the full $275 million under its revolving credit facility on August 21, 2025, providing near-term liquidity for the chapter 11 process.

Second filing. Spirit filed for chapter 11 a second time on August 29, 2025, five months after emerging from the first case.

Capital Structure and DIP Financing

Prepetition debt. As of the August 29, 2025 petition date, Spirit's total funded debt was approximately $2.8 billion: a $275 million revolving credit facility (fully drawn), $856.1 million in 12.00% senior secured notes issued upon first-case emergence, $1.525 billion in aircraft debt, and $136.3 million in unsecured CARES Act term loans from the U.S. Treasury (maturing 2031). In addition, the Cromer declaration reported approximately $5 billion in capitalized lease obligations on 166 leased aircraft, at an average monthly rent of approximately $326,000 per aircraft.

DIP financing. The DIP facility totaled $1.225 billion: $475 million in new money term loans and up to $750 million in roll-up of prepetition secured notes obligations. Barclays Bank PLC served as fronting lender. The court entered the interim DIP order on October 10, 2025, and the final DIP order on October 31, 2025. The DIP included superpriority administrative expense claims and replacement liens for the secured notes parties and revolving facility parties.

DIP amendment (December 29, 2025). The DIP was amended to provide an additional $100 million in incremental financing. The amendment conditioned later draws on either a lender-acceptable strategic transaction or the filing of an acceptable plan of reorganization, maintaining the dual-track posture between sale and plan outcomes.

Key Settlements and Asset Sales

AerCap global restructuring (approved October 10, 2025). The court approved a restructuring term sheet with AerCap resolving Spirit's largest lessor dispute. Certain leases were assumed, others rejected, and undelivered aircraft leases were deemed rejected nunc pro tunc to the petition date. AerCap received an allowed general unsecured claim of $572.4 million against Spirit Airlines, LLC. Both parties exchanged mutual releases.

IAE/Pratt & Whitney engine agreement (approved December 23, 2025). The court approved a restructuring term sheet with International Aero Engines providing Spirit up to $140 million in engine credits and access to up to 100 Green Time engines via short-term leases, partially addressing the GTF grounding crisis.

Chicago O'Hare gate sales. Spirit sold preferential-use gate leaseholds at O'Hare Airport through two transactions: Gates G8 and G10 to American Airlines for $30 million (approved December 15, 2025) and Gates G12 and G14 to United Airlines for $30.2 million (approved February 25, 2026). Both transactions required Spirit to use proceeds to prepay DIP loans.

Fleet reduction and aircraft sales. Spirit engaged in extensive negotiations with aircraft lessors under Section 1110 of the Bankruptcy Code. The October 7, 2025 omnibus Section 1110 order was the most-cited document in the case. Multiple extension stipulations were entered with lessors including Stratos, JSAI, AerSale, Merx Aviation, and others. Spirit sought court approval to return 87 Airbus jets to lessors, and the fleet was expected to be reduced from 214 aircraft to approximately 100 through lease rejections and negotiated terminations. On February 11, 2026, Spirit filed a bidding procedures motion for the sale of 20 Airbus A320 and A321 aircraft, with CSDS Asset Management LLC as stalking horse bidder at $16 million (3% break-up fee, up to $2.5 million expense reimbursement). The auction was scheduled for April 20, 2026, with a sale hearing on or about April 23, 2026.

Contested Matters, Labor, and Professional Fees

Examiner investigation. The court appointed Marc J. Heimowitz as examiner on October 28, 2025, to investigate the circumstances surrounding Spirit's refiling approximately five months after first-case confirmation. The Examiner's Report, filed December 15, 2025, concluded that there was no evidence of intentional two-stage bankruptcy planning, no reliance on an assumed post-confirmation merger, and that Spirit 1 projections were reasonably supported by information available at confirmation. The report identified the $350 million equity injection as compelling evidence that sophisticated parties believed in the first plan's viability. The proximate causes of Spirit 2 were the Elavon credit card collateral dispute and AerCap's lease termination notices, both in August 2025.

CBA rejection, labor, and claims administration. The court authorized rejection of Spirit's collective bargaining agreement on December 29, 2025. Spirit announced plans to furlough approximately 1,800 flight attendants as part of second-case cost reductions. In November 2025, Spirit reached agreements with its pilots and flight attendants as part of the restructuring. A bar date motion was filed on November 17, 2025, and the court entered a claims objection procedures order on February 25, 2026, authorizing the debtors to file omnibus objections and settle many claims without separate court approval. A Consortium of Airports filed a Rule 2019 statement on February 17, 2026, indicating organized airport creditor coordination in connection with the sale process. An adversary proceeding (Case No. 26-01003) was filed on January 12, 2026, against Terrance Mleczko and TM Defense Solutions LLC.

Key professionals. Davis Polk & Wardwell LLP serves as lead debtors' counsel, PJT Partners LP as investment banker, FTI Consulting, Inc. as restructuring advisor, Debevoise & Plimpton LLP as fleet counsel, O'Melveny & Myers LLP as special labor counsel, Ernst & Young LLP as audit and tax advisor, and Epiq Corporate Restructuring, LLC as claims and noticing agent. Willkie Farr & Gallagher LLP serves as counsel to the official committee of unsecured creditors, with AlixPartners, LLP as committee financial advisor, Jefferies LLC as committee investment banker, and Alton Aviation Consultancy LLC as specialized aviation advisor. Glenn Agre Bergman & Fuentes LLP served as examiner counsel, M3 Advisory Partners, LP as examiner financial advisor, and Bielli & Klauder, LLC as fee examiner counsel.

First interim fees (August 29 -- November 30, 2025). Approved by omnibus order on January 26, 2026, the first interim period fees totaled $32.9 million, led by FTI Consulting ($13.0 million), Davis Polk ($12.9 million), and Debevoise & Plimpton ($5.1 million). Subsequent fee awards in late February and early March 2026 covered the examiner team ($1.2 million combined), committee professionals (Willkie Farr at $2.1 million, Alton Aviation at $2.8 million, PJT Partners at $2.7 million, Ernst & Young at $1.8 million), and others.

RSA, Failed Emergence Path, and Wind-Down

On February 24, 2026, Spirit announced an agreement in principle on key terms of a restructuring support agreement with its DIP lenders and secured noteholders. On March 13, 2026, Spirit filed the RSA and Plan of Reorganization with the court. The proposed plan contemplated a go-forward airline with:

• Total debt and lease obligations reduced from $7.4 billion pre-filing to approximately $2 billion post-emergence
• Fleet further rightsized to 76--80 aircraft by Q3 2026, primarily Airbus A320/A321ceo, with growth aircraft planned between 2027 and 2030
• Network focused on Fort Lauderdale, Orlando, Detroit, and the New York area
• Continued support from DIP lenders and secured noteholders

That plan did not become the operating outcome. On May 2, 2026, Spirit announced that it had started an orderly wind-down of operations, effective immediately. The company said all flights were cancelled, customers should not go to the airport, and refunds for credit-card or debit-card purchases would be processed automatically. Spirit attributed the shift to a material increase in oil prices, continued business pressure, and the absence of additional funding. CEO Dave Davis said the March restructuring deal would have allowed Spirit to emerge as a go-forward business, but that the fuel-price shock left the company without the hundreds of millions of dollars of additional liquidity needed to continue.

Key Timeline

Date	Event
February 2022	Frontier agrees to acquire Spirit for $2.9 billion
2022	JetBlue launches competing $3.8 billion offer
March 2023	DOJ files suit to block JetBlue-Spirit merger
January 2024	Federal judge blocks JetBlue acquisition
March 2024	JetBlue-Spirit merger agreement terminated
November 18, 2024	First chapter 11 petition filed
February 20, 2025	First case confirmation order entered
March 12, 2025	First case emergence (effective date)
April 2025	CEO Ted Christie resigns
August 12, 2025	Spirit discloses going-concern doubts
August 15, 2025	Spirit pays $50 million to Elavon as collateral
August 21, 2025	Spirit draws full $275 million revolving credit facility
August 25, 2025	AerCap sends lease termination notices (73 aircraft)
August 29, 2025	Second chapter 11 petition filed
October 7, 2025	Omnibus Section 1110 order entered
October 10, 2025	DIP interim order; AerCap restructuring term sheet approved
October 28, 2025	Examiner Marc J. Heimowitz appointed
October 31, 2025	DIP final order entered ($1.225 billion)
November 7, 2025	Spirit reaches agreements with pilots and flight attendants
November 17, 2025	Bar date motion filed
November 18, 2025	Schedules and SOFAs filed
December 15, 2025	Examiner's Report filed; American Airlines gate sale approved ($30 million)
December 23, 2025	IAE/Pratt & Whitney engine agreement approved ($140 million in credits)
December 29, 2025	CBA rejection authorized; DIP amended (+$100 million)
February 11, 2026	Aircraft sale bidding procedures motion filed (CSDS stalking horse, $16 million)
February 17, 2026	Consortium of Airports files Rule 2019 statement
February 24, 2026	Agreement in principle on RSA terms announced
February 25, 2026	United Airlines gate sale approved ($30.2 million); claims procedures order entered
March 13, 2026	RSA and Plan of Reorganization filed
April 20, 2026	Aircraft auction (scheduled)
May 2, 2026	Spirit announces immediate orderly wind-down and cancellation of all flights

Frequently Asked Questions

When did Spirit Airlines file for bankruptcy?

Spirit Airlines filed for chapter 11 twice: first on November 18, 2024, and again on August 29, 2025. The second filing came approximately five months after emergence from the first case.

Why did Spirit file for bankruptcy a second time?

The immediate triggers were Elavon's credit card collateral requirements, which drained $50 million in cash plus $3 million per day in holdbacks, and AerCap's termination notices covering 73 aircraft on August 25, 2025. An independent examiner found no evidence that the second filing was planned during the first case.

What is the DIP facility in the second case?

The DIP facility totals $1.225 billion: $475 million in new money term loans and up to $750 million in roll-up of prepetition secured notes. Barclays Bank PLC serves as fronting lender. The facility was amended in December 2025 to add $100 million in incremental financing.

What happened to Spirit's plan of reorganization?

Spirit filed a plan on March 13, 2026 that targeted emergence by early summer 2026 and would have reduced total debt and lease obligations from $7.4 billion to approximately $2 billion. The plan did not produce a go-forward airline. On May 2, 2026, Spirit announced an orderly wind-down, cancelled all flights, and said it lacked the additional liquidity needed to continue operating.

Who is the claims agent for Spirit Airlines?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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