Budget carrier Spirit Airlines has filed for bankruptcy protection for the second time in less than a year, a stunning move that underscores the financial turbulence still gripping the ultralow-cost airline industry.

The carrier, known for its bright yellow planes and no-frills service, said it would continue operating flights as usual during the restructuring. Tickets, credits and loyalty points remain valid, and employees and contractors will continue to be paid, Spirit said in a statement.

Spirit’s troubles date back to the pandemic, when it racked up steep losses amid collapsing travel demand. By the time of its first Chapter 11 filing in November 2024, the airline had lost more than $2.5 billion since 2020. Although it emerged from bankruptcy in March, mounting operational costs, soft demand for domestic leisure travel and what the company called “uncertainties in its business operations” pushed it back into crisis.

The airline currently carries $2.4 billion in long-term debt, most of it due in 2030, and reported a negative free cash flow of $1 billion at the end of the second quarter. In an earlier quarterly filing, Spirit warned there was “substantial doubt” about its ability to continue operations over the next year.

Cost Cutting and Job Losses

Spirit has already slashed costs since its first restructuring. It announced plans to furlough 270 pilots and downgrade 140 captains to first officers starting in October and November, citing expected lower flight volumes in 2026. These reductions follow earlier rounds of job cuts made prior to last year’s bankruptcy.

The airline is also weighing the sale of some aircraft and real estate to raise cash, though it continues to face stiff competition from larger U.S. carriers that have launched their own budget-friendly fare tiers.

Uncertain Future

Despite operating one of the youngest fleets in the U.S., Spirit has struggled to find a lifeline. Previous buyout efforts by JetBlue and Frontier failed both before and during its first bankruptcy process. Industry analysts say Spirit’s ability to restructure a second time may depend on securing new investors or a potential merger partner willing to shoulder its debt.

For now, Spirit insists passengers will not see immediate disruptions. But its repeated trips to bankruptcy court highlight the ongoing pressure on budget airlines navigating a market where travelers are increasingly willing to pay more for comfort and flexibility.