Spirit Strikes Deal With Noteholders to Exit Bankruptcy

Jonathan Randles and Sri Taylor

Wed, February 25, 2026 at 4:00 AM GMT+9 3 min read

Photographer: Michael Ciaglo/Bloomberg

(Bloomberg) – Spirit Aviation Holdings Inc. has struck an agreement with noteholders that will allow the US budget airline to exit bankruptcy later this year, capping a tumultuous period marked by strained finances and competitive pressure.

Spirit lawyer Marshall Huebner said during a New York court hearing on Tuesday that the company has reached a deal with a key creditor group on the terms of the Chapter 11 exit plan that will trim billions of dollars in debt and reduce the cost of its fleet.

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The airline expects to emerge from bankruptcy in late spring or early summer, he said.

The restructuring is anticipated to reduce Spirit’s debt and aircraft lease obligations from $7.4 billion to about $2.1 billion, the company said in a press release. The deal is supported by senior noteholders and lenders financing the airline’s bankruptcy.

If the restructuring transaction is completed as planned, Spirit will emerge from bankruptcy later this year with a “dramatically improved balance sheet,” Huebner said during Tuesday’s hearing.

The proposed restructuring will also allow Spirit to “consider future industry transactions” once it leaves Chapter 11, Huebner said. Before filing its first bankruptcy, Spirit agreed to be acquired by JetBlue Airways Corp. but a federal judge blocked the tie-up in 2024 on antitrust grounds.

“In order for us to be good consolidation partners we need to be a profitable standalone airline. When we achieve that, we will be looking around for strategic opportunities in the business,” Chief Executive Officer Dave Davis said in an interview with Bloomberg.

The company said it will continue negotiating with creditors as it advances its proposed restructuring plan and will attempt to secure additional cost savings with the help of legal tools it has available in Chapter 11.

Spirit had more than 200 Airbus SE aircraft at the time it filed Chapter 11, according to court documents. Spirit has been shrinking its fleet and plans to remove from operation another 15 to 20 aircraft in mid-April, with another cut at the end of the US summer. The size of the final reduction has not yet been determined, said Davis.

The carrier also said it would ramp up flying during busy periods and reduce off-peak flying to match consumer demand, and expand its premium economy offerings and co-branded programs.

The company sought Chapter 11 protection in August for the second time in less than a year after an earlier bankruptcy that cut debt from its balance sheet failed to turn around the business.

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Spirit has said it will use its second bankruptcy to reduce its operating costs and recently struck an agreement to sell 20 Airbus aircraft for at least $533.5 million.

The Florida-based airline has been taking steps to reduce labor costs as part of the restructuring. In November, Spirit announced 150 job cuts across corporate and operational roles. Last year, it furloughed roughly 1,800 flight attendants and at least 270 pilots.

(Updates throughout with CEO comments, fleet plans and statements on dealmaking.)

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