4 Stocks Set To Profit As Spirit Goes Bankrupt (Again)

Core Viewpoint - Spirit Airlines has filed for bankruptcy for the second time in less than a year, indicating ongoing struggles in the ultra-low-cost carrier (ULCC) segment and significant operational challenges [1][2]. Industry Overview - The airline industry is highly competitive, with larger airlines capitalizing on Spirit's difficulties to attract its former customers and routes [3]. - Wealthier airlines are increasingly encroaching on the fare space traditionally occupied by ULCCs like Spirit [2]. Company-Specific Developments Spirit Airlines - Spirit Airlines emerged from its first bankruptcy in March 2023 but failed to implement effective cost-cutting measures, leading to a second bankruptcy filing in August 2023 [1][2]. - The company has faced substantial debt issues, rising labor costs, and the fallout from two failed merger attempts with JetBlue and Frontier [2]. Frontier Group Holdings Inc. - Frontier is positioned to benefit from Spirit's struggles, planning to add 20 new routes, including those to Spirit's key markets [5][7]. - Analysts estimate a 35% overlap in customer bases between Frontier and Spirit, enhancing Frontier's potential market share gains [5]. - Frontier's stock was upgraded from Hold to Buy, with a notable price increase of over 15% in a single day following Spirit's bankruptcy news [7]. United Airlines Holdings Inc. - United Airlines is seizing the opportunity to expand into 15 cities previously served by Spirit, including new routes to Orlando and Las Vegas [8]. - United's stock has increased by more than 20% in the last month, reflecting positive market sentiment following Spirit's bankruptcy [10]. JetBlue Airways Corp. - JetBlue, which previously attempted to acquire Spirit, is likely to benefit from Spirit's absence due to overlapping routes and recent earnings success [11][13]. - JetBlue reported a narrower loss than expected in Q2 2025, with quarterly revenue of $2.36 billion, exceeding expectations by over 3% [11]. - Following the bankruptcy announcement, JetBlue's shares spiked more than 20%, indicating strong market confidence [13]. Alaska Air Group Inc. - Alaska Air Group may benefit from Spirit's potential exit despite not expanding its route coverage, as its new loyalty program could attract Spirit's former customers [14]. - Alaska Air reported a nearly 15% EPS beat and record revenue of $3.7 billion in its latest earnings report [14][16]. - The stock has gained momentum following Spirit's announcement, breaking through previous resistance levels [16].