Spirit Airlines’ bankruptcy escape plan faces increasing pressure due to rising jet fuel prices, challenging key restructuring assumptions.

Based on March filings, the ultra-low-cost carrier achieved turnaround with fuel prices averaging $2.24 per gallon in 2026 and $2.14 in 2027. Jet fuel prices reached $4.24 a gallon by mid-April, quadruple its estimates.

Spirit is seeking court approval for a second restructuring in less than a year, following its bankruptcy in March 2025. The company faces challenges such as increased domestic capacity, decreasing leisure demand, and challenging pricing.

Spirit aims to reduce costs by approximately $1 billion and increase revenue through pricing, premium seating, and other changes. Early 2026 first-quarter operating margins are predicted to be negative 5.6%, up from negative 27.1% a year earlier.

Due to rising fuel prices, reports of a close liquidation emerged this week.

The restructuring plan requires the company to utilize $150 million of encumbered cash to repay bankruptcy loans, maintain minimum restricted balances, and pay $100 million to lenders upon departure, while finding fresh funding.
Spirit filed a bankruptcy petition in March, citing fare rises and capacity cuts as responses to high fuel prices.