Travelers have a new reason to focus on the travel of Holy Spirit Airlines.
In a quarterly financial update filed Monday night, Florida-based Dania Beach warned of its future solvency.
Spirit said financial performance is not improving as quickly as meeting liquidity requirements for its creditors. In other words, the cash and short-term credit available to airlines do not keep pace with entry income. As a result, the airline is considering selling aircraft, airport gates or other assets to raise cash and is discussing liquidity requirements with some creditors.
But if these don’t work, Spirit warns: “There is a lot of doubt about the company’s ability to continue to worry for 12 months.”
The spirit may face a second bankruptcy filing, or worse, liquidation.
This sounds like deja vu because it is. Spirit lost money and faced pressure from its creditors, especially companies handling credit card payments, to improve liquidity after planning a merger with JetBlue Airways last summer. This eventually peaked in the Chapter 11 bankruptcy filing of “The Spirit” in November 2024.
Spirits come out of bankruptcy in March with less debt, but face a key challenge: making money. The airline reported operating losses of $184 million for the three months to June, and $186 million from the date of withdrawal from bankruptcy in March.
The airline is trying to boost revenue with a premium listing. It’s named “Spirit First”, which adds its large front seats to the next name and offers an option with fare bundles found on most airlines. Recently, the airline has added options for premium economic out-of-leasing on its aircraft.
Additionally, the Spirit has unveiled new destinations from Belize to Tennessee and has established new partnerships with the United States Regional Contour Airlines.
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However, the spirit is facing a slowdown in the United States as slowing as other airlines. While most airline executives say the market is improving, it doesn’t seem that fast enough.
“The company continues to face challenges and uncertainty in its operations and expects these trends to continue for at least the remainder of 2025,” Spirit said in its financial filing.
Is booking mentally safe?
Few travelers are concerned about recent spiritual travel. Warnings to investors look at the year, not tomorrow or next week.
A key date outlined in the document is December 31, 2025. At that time, the spirit had to renegotiate its credit card processor agreement, which warned that this could require “extra collateral” to reduce its available liquidity.
As the end-December deadline approaches, the spirit may disclose more about the severity of its situation.
If travelers are worried about booking a mental flight, they may consider purchasing travel insurance. Please note that not all policies cover failed airlines, so be sure to check before purchasing.
Opportunities from other airlines
In the airline industry, the struggle of one competitor is the gain of another. That’s the spirit.
Frontier Airlines, the country’s second largest budget airline, is likely to gain the most. A spirit shutdown will mean it will have the low end of the U.S. travel market. It may also pick dozens of former spiritual planes for its growth ambitions.
“We will be the last person next year to stand in a low-cost space,” said Barry Biffle, CEO of Frontier Airlines.
Other airlines will also have winners. TD Cowen aviation analyst Tom Fitzgerald pointed out in a report Monday that Sun Country Airlines may use Spirit’s cuts at the Detroit Metro Wayne County Airport (DTW) to “start building beach blackheads.”
Fort Lauderdale – The gates and terminals of Spirit at the Golywood International Airport (FLL) may attract many airlines, including JetBlue and United Airlines.
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