Broke Spirit Airlines turns to private equity firm in hopes of avoiding bankruptcy

Core Viewpoint - Spirit Airlines is in discussions with Castlelake for a potential takeover as it faces severe financial difficulties, having filed for bankruptcy twice in one year [1][2][7]. Financial Situation - The airline entered Chapter 11 bankruptcy in August after failing to complete a reorganization less than a year prior [2]. - Spirit Airlines has warned that it might not survive another year due to adverse market conditions and weak demand for domestic leisure travel [3][4]. Restructuring Efforts - The CEO of Spirit Airlines stated that the second restructuring process aims to ensure the long-term success of the company [3]. - The airline has attempted to rebrand itself as more premium, but has struggled with budget cuts and reduced demand due to economic uncertainty [11]. Market Challenges - Spirit Airlines has faced a challenging pricing environment and anticipates ongoing operational challenges for the remainder of fiscal year 2025 [7]. - The airline's first bankruptcy filing occurred in November 2024 after two failed mergers with Frontier and JetBlue [7]. Regulatory Impact - The Justice Department blocked JetBlue's acquisition of Spirit, citing antitrust concerns, which has been linked to Spirit's current financial struggles [8][9].