Spirit Airlines is betting on this air-travel trend as it prepares to emerge from bankruptcy

By Claudia Assis

The carrier says it would be a slimmer airline

A Spirit Airlines Airbus jet at Orlando International Airport in Orlando, Fla. The company expects to emerge from bankruptcy as early as this spring.

Spirit Airlines has reached a deal with its creditors and expects to emerge from bankruptcy as a slimmer airline - and one not solely focusing on budget air travelers, it said Tuesday.

Spirit would emerge from Chapter 11 in late spring or early summer "as a strong low-cost, value-driven carrier offering guests basic and premium products at the lowest fares in the sky," the company said. The agreement in principle will provide Spirit with the money to finalize its restructuring and make changes in its fleet, network and cost structure.

Spirit Aviation Holdings (FLYYQ), the parent company of Spirit Airlines, filed for bankruptcy in August - the second time in less than a year that it tried to shore up its balance sheet amid challenges for budget air carriers.

A focus on premium fares would be a departure from its ultralow-cost business model, but a well-worn page from the playbook that major U.S. airlines have followed in recent months.

Carriers such as United Airlines (UAL) and Delta Air Lines (DAL) have bet on a web of perks, loyalty points, credit cards, lounge privileges and other incentives to lure travelers to their premium, and more profitable, airfares.

The "new Spirit" would focus on aligning its network and capacity to routes and periods of strongest consumer demand, the company said. That includes higher aircraft utilization during peak days while reducing off-peak flying, as well as the flexibility to adjust to seasonal demand, it said.

Spirit earlier this month cut its June-quarter capacity plan, planning to shrink capacity by nearly 30% year over year, analysts at Deutsche Bank said in a recent note. Further capacity cuts could be on the horizon as the air carrier also reduces its fleet, they said.

Spirit said it will expand its premium fare offerings, Spirit First and Premium Economy, and make "additional enhancements" to its co-branded programs to encourage customer loyalty.

It expects to reduce its debt and lease obligations to about $2.1 billion postbankruptcy, from $7.4 billion before the Chapter 11 filing.

-Claudia Assis

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02-24-26 1258ET