Have I been living under a rock… or has Spirit Airlines management been living under a rock? Maybe I just need to go to business school, or something, because the math ain’t mathing….
Spirit claimed it would turn a profit this year?!?
Spirit has had a really rough several years. The airline hasn’t turned a profit since before the pandemic, and now has the worst margins in the industry. The airline was going to be saved by a JetBlue takeover, but a judge ultimately blocked that, in the name of preserving competition.
Then the company filed for Chapter 11 bankruptcy, which it emerged from within months. While that helped with some debt issues, it didn’t help with the pace at which the airline is burning through cash, given that Spirit didn’t renegotiate any labor contracts or aircraft leases, or do anything else to improve its prospects.
Let me be clear, I don’t want to rag on Spirit. I actually think Spirit is a great airline with overwhelmingly friendly employees, and it unfairly gets a bad rap. But I also know how to count, and if you’re running a lemonade stand where you’re consistently selling a product for $0.80 that costs $1 to produce, you’re not going to be doing that much longer.
So anyway, not surprisingly, Spirit has been burning through cash quickly, and recently the airline issued an alarming regulatory filing, casting “substantial doubt” on its ability to operate for 12 more months. The company’s CEO tried to downplay this, but again… math.
Here’s a detail I missed in all of this, as reported by CNBC. During its December 2024 bankruptcy court filing, the company projected a net profit of $252 million for 2025 (in contrast to a $1.2 billion loss in 2024). How did that work out? Well, in Q2 2025 (typically one of the strongest quarters of the year for airlines), the company had a net loss of $246 million.
Let me say that one more time — the airline expected an annual net profit of $252 million, and instead, lost nearly that much in what was supposed to be one of its best quarters. Admittedly there has been some economic uncertainty, but that doesn’t change the reality that unfortunately the carrier’s business model just doesn’t work anymore.
Aircraft lessors gauging interest for Spirit planes
In the same CNBC story linked above, it’s reported that Spirit’s aircraft lessors have started reaching out to airline executives at competing airlines, to gauge interest in potentially acquiring Spirit’s roughly 200 Airbus aircraft. Rumor has it, Scott Kirby asked if the planes come with any JFK slots (I kid).
It’s not surprising to see aircraft leasing companies simply getting ahead of a likely inevitability, and at this point, one wonders what level of interest there will be for these used planes at other US carriers. Pre-2025, I imagine that United would’ve been salivating at the thought of these, but we’re now increasingly seeing US carriers pull back capacity a bit, given the weakness in domestic demand. I’m sure there are plenty of points around the globe where there’s demand for these, but the US market seems trickier.
In a statement regarding all of these details, Spirit said the following:
“We will not comment on market rumors and speculation. Spirit Airlines is a critical part of the U.S. aviation industry, and we provide high-value travel options to the communities we serve. We have saved consumers hundreds of millions of dollars, whether they fly with us or not. Our focus is on making the necessary changes to better position the company and build a stronger airline. We remain hard at work on many initiatives to protect our business, valued Team Members, partners and Guests.”
Bottom line
I never really understood Spirit Airlines’ plan after emerging from bankruptcy. Apparently the company projected a $252 million profit for 2025, despite having lost $1.2 billion the previous year. Instead, the airline lost $246 million in Q2 2025, which should’ve otherwise been one of the better quarters of the year.
Maybe I need to get out into the real world a little bit more and be more entrepreneurial, because if Spirit found new investors to throw nearly a billion dollars at the company for doing more of the same, well… imagine the possibilities!
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