After experiencing its worst bankruptcy in decades, Spirit Airlines began a months-long dismantling process.
Date: May 23, 2026 Views: 4610
Spirit Airlines, which ceased operations after more than three decades last weekend, only began its months-long dissolution process on Tuesday, marking one of the largest airline bankruptcies in the United States in recent decades.
Spirit Airlines and its stakeholders initiated bankruptcy proceedings in White Plains, New York, a process expected to last for months. Hearings discussed issues such as airport landing fees, aircraft, and staffing.
The airline filed a cumulative liquidation budget of approximately $217 million, though this figure is subject to change.
The budget runs until February 2028. It includes over $52 million in employee costs as of July and over $52 million in aircraft-related expenses.
According to data from aviation company Cirium, the airline has 59 active Airbus A320s and 63 mothballed Airbus A320s, as well as 37 active A321s and 13 mothballed A321s. More than three-quarters of its fleet is leased.
Spirit Airlines ceased operations after years of hardship, recently burdened by heavy debt and soaring costs.
Marshall Huebner, a lawyer for Spirit Airlines from the law firm Davis Polk, stated in bankruptcy court Tuesday that soaring jet fuel prices following the U.S. and Israel attacks on Iran in February forced Spirit Airlines to shut down. He said this resulted in an additional $100 million in costs for Spirit Airlines in March and April.
Later last week, negotiations for a potential government bailout of Spirit Airlines in the form of a $500 million loan, which could have given the government up to 90% ownership, broke down. The airline officially ceased operations at 3 a.m. ET on Saturday.
Spirit Airlines passengers scrambled to rebook tickets. Other airlines, including JetBlue, Southwest Airlines, and United Airlines, said they had transported tens of thousands of Spirit Airlines passengers stranded due to the airline's collapse.
The day before its collapse, Spirit Airlines transported approximately 50,000 passengers. The airline stated that approximately 17,000 direct and indirect employees lost their jobs.
“The collapse of Spirit Airlines is a sad and unfortunate event with detrimental effects on many fronts, especially for the thousands of Spirit Airlines employees and the families who depend on them,” presiding judge Sean Lane said at Tuesday’s hearing.
“These employees and their families are under immense pressure, and they likely have many questions,” he continued. “Hopefully, today we can discuss some information, answer some of their questions, or provide some avenues to access those answers. Bankruptcy can be a very difficult process, and today is a heartbreaking example.”
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