Bankrupt Spirit Airlines may still be able to achieve the merger it seeks.
The Dania Beach, Florida-based discounter told investors in early October that it was “actively in discussions with a number of interested counterparties.”
In non-Wall Street terms: Spirit is in discussions with other companies about potential mergers or acquisitions.
A merger or sale of Spirit’s assets is widely viewed as likely to be the best outcome for the airline since it filed for its second Chapter 11 reorganization in less than a year in August. The airline has struggled to grow revenue faster than costs since the COVID-19 pandemic, leaving a trail of losses.
Wall Street analysts estimate that Frontier Airlines and JetBlue Airways will be the biggest beneficiaries of Spirit Airlines disappearing from the market. Other airlines, especially Southwest Airlines, will also benefit.
Spirit has made several failed attempts to merge with Frontier and JetBlue since 2022.
An investor disclosure filed with the U.S. Securities and Exchange Commission on Oct. 14 also details Spirit’s plans if it does emerge from bankruptcy as its own airline.
First, Spirit plans to cut its schedule further. The airline expects 2026 traffic to be about 20% lower than this year. These cuts will be on top of cuts already made; the number of Spirit seats is expected to decrease by 24% in 2025, according to schedule data from aviation analytics firm Cirium.
Spirit hopes to return to “moderate growth” in 2027 and then grow at an average annual rate of about 9%.
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Second, Spirit plans to reduce the size of its fleet to only reliable Airbus A320 and A321 aircraft. This means it will retire all new technology A320neo and A321neo aircraft from its fleet that have been plagued by problems with Pratt & Whitney engines.
In September, the airline had 38 A320neo family aircraft grounded due to engine problems, and another 20 aircraft were grounded ahead of sale. The company has requested court approval to return more than 100 of its 214 aircraft to their lessors.
Third, Spirit’s biggest leap may be repositioning its brand upmarket. Investor documents outline goals to transform its simple, no-frills image to cater to a “value-seeking audience.”
Elevating the Shift Spirit brand upmarket in the eyes of consumers will be a challenge, given that the airline has historically been an unpopular but affordable travel option, especially as competitors can offer better products at similar prices.
Ahmed Abdelghany, associate dean and professor at Embry-Riddle Aeronautical University’s School of Business, believes U.S. traveler preferences have changed since the late 2010s, when Spirit Airlines was a fast-growing, profitable airline.
“Many people have experienced [ultra-low-cost carrier] “We understand service and understand what it means compared to a full-service airline,” he said. The shift has benefited full-service airlines such as Delta Air Lines and United Airlines and is driving the premiumization of U.S. aircraft cabins
Spirit Airlines itself has tapped into the trend by upgrading its large front seats to “business class” and installing premium economy seats with extra legroom on its planes.
Overarching Spirit’s standalone plan promises to cut costs that have spiraled rapidly since the pandemic hit. In addition to downsizing its fleet, the airline has furloughed hundreds of pilots and cabin crew and cut more than a dozen unprofitable destinations from its route map.
