Spirit Airlines Files for Bankruptcy Protection

Spirit Airlines has filed for Chapter 11 bankruptcy protection. Chapter 11 means that they are seeking a reorganization (another one – remember that they just came out of chapter 11 earlier this year).

Spirit said it intends to conduct business as normal during the restructuring process, meaning that they will continue to need aircraft parts.

Spirit has published guidance on its restructuring plans. Part of that published plan involves “optimizing” the fleet which likely means that they plan to use bankruptcy to terminate some leases. Spirit will be sending out a Vendor Letter in which they confirm their plan to pay vendors in the normal course of business for goods and services delivered to Spirit on or after August 29, 2025 (today – this is the “post-petition” period). Any outstanding invoices for goods and services delivered prior to our Chapter 11 filing date are considered “pre-petition” claims and will need to be addressed as part of the Chapter 11 process.

It is not unusual to see a bankruptcy trustee seek to recover sums paid in the period immediately before the petition. If you get a letter like this, then please consult with an attorney before you agree to return money to the trustee. In my experience, there can be defenses to such trustee claims.

Those who are owed significant unpaid sums from Spirit should work with bankruptcy counsel to investigate options. Your attorney may be able to negotiate more favorable treatment if you have an ongoing relationship with Spirit, especially if they need your support to continue flying.

For ideas about how to protect your company from a customer’s bankruptcy, please look at some of our older blog posts on the subject:

• Bankruptcies are Happening. What do you need to know to protect yourself?
• Protecting Your Right to Get Paid Vol. 1: Security Interests
• Protecting Your Right to Get Paid Vol. 2: Filing Security Interests
• Protecting Your Right to Get Paid Vol. 3: Filing Security Interests For Work or Materials on a Specific Aircraft