Spirit Airlines CEO expects budget airline to exit its second bankruptcy process by this summer

Spirit Airlines’ parent company says it expects to exit Chapter 11 bankruptcy in the late spring or early summer, after striking a preliminary deal with its lenders and secured creditors that provides the support needed to finish its restructuring.

The early-stage agreement would help Spirit finalize changes to its fleet, route network and cost structure as it works toward emerging as “a new Spirit” — a smaller, leaner carrier still focused on offering low fares but with more options like premium economy and its version of first-class seating with more legroom.

“Spirit will emerge as a strong, leaner competitor that is positioned to profitably deliver the value American consumers expect at a price they want to pay,” said CEO Dave Davis.

The budget carrier filed for fresh bankruptcy protection in August, months after emerging from a Chapter 11 reorganization. Davis said at the time that the airline’s previous Chapter 11 petition focused on reducing debt and raising capital, but after exiting that process last March, it had “become clear that there is much more work to be done and many more tools are available to best position Spirit for the future.”

The Florida company quickly followed the news of its second bankruptcy in a year with announcements that it would suspend operations in about a dozen U.S. cities and furlough 1,800 flight attendants. The airline also instituted furloughs and job cuts before its first bankruptcy filing.

Low-cost carriers like Spirit have been under pressure by bigger airlines, which have rolled out their own low-cost offerings.

Known for its bright yellow planes and no-frills service, Spirit has had a rough ride since the COVID-19 pandemic amid rising operation costs and its mounting debt. By the time of its first Chapter 11 filing in November 2024, Spirit had lost more than $2.5 billion since the start of 2020.

This story was originally featured on Fortune.com