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Spirit Airlines is facing renewed financial pressure as rising fuel costs threaten to complicate its efforts to exit bankruptcy, adding uncertainty to its restructuring plan, according to reports.
The low-cost carrier, which filed for Chapter 11 bankruptcy protection in late 2024, has been working toward a financial overhaul aimed at stabilizing operations and improving liquidity. But a recent surge in fuel prices – driven by the ongoing war with Iran – is creating fresh headwinds at a critical stage in the process.
The dire situation has led some creditors to explore a potential liquidation of the airline, according to reports from Bloomberg and The Wall Street Journal, as its low-cost structure leaves it more exposed to triple-digit increases in fuel costs.
Fuel remains one of the largest expenses for airlines, and the recent spike is hitting Spirit particularly hard given its ultra-low-cost model. Unlike larger carriers, Spirit has limited flexibility to offset higher costs through fare increases without risking a decline in demand.
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Passengers check in for their Spirit Airlines flights at O’Hare Airport on March 10, 2026, in Chicago, Illinois. (Scott Olson/Getty Images)
Creditors have already raised concerns about the company’s restructuring plan. In a recent court filing, lenders behind Spirit’s revolving credit facility argued the proposal may not be viable if fuel prices remain elevated.
The financial impact could be critical. JPMorgan analysts, cited by the Journal, estimate that higher fuel prices could add roughly $360 million to Spirit’s expenses this year – exceeding the $337 million in cash the airline reported at the end of last year.
Spirit Airlines airplanes at Fort Lauderdale-Hollywood International Airport in Fort Lauderdale, Florida, on Oct. 24, 2023. (Eva Marie Uzcategui/Bloomberg via Getty Images)
That imbalance highlights the scale of the challenge as the airline attempts to restructure while managing rising operating costs and constrained liquidity.
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Spirit has already taken steps to shore up its finances, including raising fares, cutting unprofitable routes and reducing its fleet.
A Spirit Airlines aircraft undergoes operations in preparation for departure at the Austin-Bergstrom International Airport on Feb. 12, 2024, in Austin, Texas. (Brandon Bell/Getty Images)
The company said in court filings it expects fuel price volatility to ease in the coming months, with conditions potentially stabilizing later this spring. But the outlook remains uncertain with the Iran conflict showing no end in sight and continuing to disrupt global energy markets.
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Spirit Airlines did not immediately respond to FOX Business’ request for comment.
