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Economy February 24, 2026

Spirit Aviation Secures In-Principle Restructuring Support from Lenders

Agreement in principle aims to underpin Spirit Airlines' Chapter 11 overhaul, targeting a leaner network and a sharp cut in debt obligations

By Hana Yamamoto
Spirit Aviation Secures In-Principle Restructuring Support from Lenders

Spirit Aviation Holdings said it has reached an agreement in principle on the key terms of a restructuring support agreement with its existing debtor-in-possession lenders and secured noteholders. The deal is designed to fund the airline through its Chapter 11 process, enabling planned changes to fleet deployment, route capacity and cost structure, with a targeted emergence in late spring or early summer.

Key Points

  • Spirit has reached an agreement in principle with its existing DIP lenders and secured noteholders to support its Chapter 11 restructuring - impacts airlines and credit markets.
  • The plan focuses on higher utilization during peak days, reduced off-peak flying, expanded Spirit First and Premium Economy products, and loyalty program enhancements - impacts airline operations and consumer travel experience.
  • Debt and lease obligations are expected to fall from $7.4 billion pre-filing to approximately $2.1 billion post-emergence, with an intended reduction in overall cost structure - impacts corporate finance and competitive positioning within the airline sector.

Spirit Aviation Holdings announced that it has reached an agreement in principle on key terms of a restructuring support agreement with its existing debtor-in-possession (DIP) lenders and secured noteholders. The parent company of Spirit Airlines described the arrangement as a major step forward in its Chapter 11 reorganization.

According to the company, the agreement will supply the financing needed to finalize the restructuring and to implement planned adjustments across its fleet, network and cost base. Management has set a timeline to emerge from Chapter 11 in late spring or early summer.

Planned operational changes

Spirit said the restructured carrier will concentrate capacity and network decisions where consumer demand is strongest. Operationally, that means increasing aircraft utilization on peak travel days while scaling back off-peak flying, and keeping the ability to flex capacity seasonally across markets. The carrier also intends to broaden its Spirit First and Premium Economy offerings while continuing to market itself as an industry price leader.

Enhancements to customer loyalty programs are also part of the plan. Spirit will make changes to its Free Spirit loyalty program and to its co-branded card partnerships to encourage repeat business and strengthen retention.

Leadership perspective

Dave Davis, President and Chief Executive Officer, said the pact is "the result of months of hard work and allows Spirit to move toward completing its transformation." He added that "Spirit will emerge as a strong, leaner competitor that is positioned to profitably deliver the value American consumers expect at a price they want to pay."

Balance sheet and cost position

On emergence, Spirit expects to cut debt and lease commitments from $7.4 billion before the filing to about $2.1 billion after restructuring. The company said it will also have a reduced cost structure, which it expects will widen its cost advantage relative to legacy carriers and other airlines.

Customer operations during restructuring

Spirit emphasized continuity of service during the Chapter 11 process. Customers are able to continue booking travel and to use tickets, credits and loyalty points as they normally would while the restructuring proceeds.

The agreement in principle with existing DIP lenders and secured noteholders marks a key milestone in Spirit Aviation Holdings' restructuring, setting the company on a path to implement its network, fleet and cost changes and to exit Chapter 11 in the targeted timeframe.

Risks

  • The agreement is described as an agreement in principle on key terms - final documentation and approvals remain necessary, creating timing and execution uncertainty for the restructuring - impacts creditors and investors in airline debt and secured notes.
  • Implementation risk exists for the planned operational changes, including aligning network and capacity and adjusting fleet utilization, which could affect service levels and financial results during the transition - impacts airline operations and consumer travel sectors.
  • Targeted timing to emerge from Chapter 11 in late spring or early summer may be subject to change if negotiations or restructuring steps take longer than anticipated - impacts market expectations and stakeholders across aviation and travel markets.

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