Suppose you are running a business that offers some of the cheapest services and still going bankrupt? Sounds confusing, right? Well, that’s what happened with the Spirit Airlines company.
Mainly known for its budget-friendly flights, Spirit has been in the airline business for a long time. However, things went a bit dark recently, and the company had to file for Chapter 11 bankruptcy. Still, it managed to come out of bankruptcy in somewhat of a creative way.
But what actually happened? And how did it affect the Spirit stock? Well, that’s what I’ll be focusing on in this article. Here, I’ll provide you with a complete idea of Spirit Airlines bankruptcy and what happened to its stock.
A Brief Overview Of Spirit Airlines
Spirit Airlines is an American airline company that is mainly known for its low-cost fares and no-frills service model.
It was launched in 1983 and has been offering flight services to people who are on a budget. Over the years, Spirit has expanded its territories to different locations. Currently, the company includes different destinations in America, Latin America, and the Caribbean.
In many cases, flight companies focus on providing the best services and comfort to people in order to make their travel experience great. Spirit, on the other hand, stuck to providing average services, including basic seating, minimal legroom, etc.
Spirit Airline Bankruptcy
Spirit Airlines filed for Chapter 11 bankruptcy back in November 2024 because of not being able to recover from some huge financial losses. The company was functioning fine and offering its useful airline services to people for a long time. However, things changed a little in 2020 when the COVID hit the whole world.
It caused a sudden shortage of air travel demand in the whole world, and it affected many companies, including Spirit.
What made things even worse was a failed merger attempt with JetBlue Airways. It is a successful airline, and Spirit’s main purpose behind merging with them was to strengthen its financial situation and increase its market share. The merger didn’t go through, which affected the company a lot.
On top of that, the increased competition in the market caused a huge financial loss, and the Spirit Airline declared bankruptcy.
Spirit’s Recovery From Bankruptcy
If you take a look at some Spirit Airlines news, you’ll know that it got out of bankruptcy in just a few months. The whole credit goes to some creative decision-making.
For example, the airline was allowed to keep operating because of the Chapter 11 guidelines. Besides that, it focused on debt restructuring by converting debt into equity, which helped it get out of the financial pitfall quickly.
Besides that, this airline company was able to secure $350 million in equity investment from its existing bondholders. This amount helped it get onto its feet quickly. Because of these major reasons, Spirit came out of bankruptcy in March 2025.
What Happened to Spirit Stock?
The Spirit stock was affected a lot by the financial downfall of the company. Its value declined a lot since investors were very concerned about the company’s situation. People were worried about potential liquidation and started to sell their shares.
This downfall made the stock get out of the NYSE, which was a huge setback.
The tide started to turn around after Spirit came out of bankruptcy. It is now focusing on restructuring its service and rebranding itself as a luxury airline.
It is restoring the company’s image, which is directly improving the stock price of Spirit. In fact, the stock is expected to get relisted at the NYSE, which will improve its stability a lot.
The Future of Spirit Stock
As an investor who’s looking to expand their portfolio, it is important to understand the future of Spirit stock. Ask yourself this question, “What do you expect of a stock of a company that has recently come out of bankruptcy? The answer is “not very good”, right?
Well, it’s a natural human response. Once we see something go down, we avoid risking it. However, the future of this stock isn’t so bad. In fact, analysts have predicted around 62% upside of the one-year average price.
So, if you have a high risk tolerance, investing in this stock wouldn’t be a bad idea. If the company’s new leadership keeps on working fine, you’ll have a huge chance of making some decent profit in the future.
The Final Summary
Well, there you have it. In the business world, we see a lot of companies fall quickly because of different situations and the story of Spirit Airlines is similar. It went declared bankruptcy and then recovered again within a matter of months. It’s an interesting case and has had an impact on Spirit stock.
Fortunately, the company is now on the road of growth and its stock is improving as well. People who are ready to take a chance on the company can invest in its stock and possibly make a profit in future.
People Also Ask
1. Is Spirit Airlines Going To Survive?
Yes, Spirit Airlines is going to survive because of its determination towards rebranding.
2. Why is Spirit Airlines Having Trouble?
Spirit Airlines bankruptcy is one of the main trouble which happened because of a failed merger and poor business demand.
3. How Much Debt is Spirit Airlines Restructuring?
This company is restructuring a debt of around $1.1 billion. It has converted $795 million of debt into equity.
4. Is Spirit Safe To Fly Right Now?
Of course, Spirit has been functioning safely, even during the bankruptcy period. So, it is completely safe to fly in it.
5. Is Spirit A 3-Star Airline?
Yes, Spirit is a 3-star airline. It offers services at cheaper prices and give mediocre services in return.
