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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 on a financial restructuring aimed at stabilizing operations and improving cash flow. But the recent increase in fuel prices – driven by the ongoing war with Iran – is creating fresh air at a critical stage in the process.
The dire situation has led some creditors to examine the airline's possible liquidation, according to reports from Bloomberg and the Wall Street Journal, as its low-cost structure leaves it more exposed to triple-digit fuel cost increases.
Fuel remains one of the biggest expenses for airlines, and the recent increase hits Spirit particularly hard given its more expensive model. Unlike the major carriers, Spirit has limited flexibility to pay higher costs through increased fares without risking a drop in demand.
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Passengers board their Spirit Airlines flights at O'Hare Airport on March 10, 2026, in Chicago, Illinois. (Scott Olson/Getty Images)
Creditors have raised concerns about the company's restructuring plan. In a recent court filing, lenders backing Spirit's revolving credit facility argued that the proposal may not work if fuel prices remain high.
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The financial impact can be serious. JPMorgan analysts, cited by the Journal, estimate that higher fuel prices could add about $360 million to Spirit's costs this year – more than the $337 million the airline reported at the end of last year.
Spirit Airlines flights 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 magnitude of the challenge as the airline tries to restructure while managing rising operating costs and limited cash flow.
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Spirit has already taken steps to strengthen its finances, including raising fares, cutting unprofitable routes and reducing its fleet.
A Spirit Airlines flight is scheduled to depart from Austin-Bergstrom International Airport on Feb. 12, 2024, Austin, Texas. (Brandon Bell/Getty Images)
The company said in court filings that it expects gasoline price volatility to ease in the coming months, and conditions could stabilize later this spring. But the outlook remains uncertain with the Iran conflict signaling the end of time and continuing to disrupt energy markets around the world.
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Spirit Airlines did not immediately respond to FOX Business' request for comment.
