Spirit Airlines is reducing its flights in an attempt to emerge from bankruptcy

Spirit Airlines is preparing to shrink into a smaller version of its former self, focusing on higher-demand travel times and routes as well as expanding premium-class seating in a bid to survive, according to a new plan unveiled in U.S. Bankruptcy Court on Tuesday.

The budget travel icon said it will shed more of its Airbus fleet as it plans to emerge from its second bankruptcy in less than a year. He is expected to appear in late spring or early summer, Spirit’s attorney, Marshall Huebner of Davis Polk, said at a hearing. Spirit said the changes would make the airline smaller and more competitive.

Under the plan, the company said it estimates it will reduce costs and said its debt and rent obligations will be reduced from $7.4 billion to $2.1 billion after this bankruptcy.

“Spirit will emerge as a strong, smaller competitor, positioned to profitably deliver the value American consumers expect at the price they want to pay,” Spirit CEO Dave Davis said in a press release outlining the plan on Tuesday.

Spirit will rework its network and schedules to increase aircraft utilization during high demand and popular periods Roads and To reduce usage during quiet periods in travel. The carrier also plans to expand its Spirit First and premium economy program, as well as update its loyalty program.

The new fleet will be made up mostly of older Airbus aircraft, “with the possibility of rejecting additional high-cost NEO aircraft,” Hubner said, referring to the more modern Airbus A320 family, adding that the exact size of Spirit’s fleet will depend on conversations with counterparts such as aircraft lessors.

He said Spirit’s annual fleet cost would be reduced by another $550 million, a 65% reduction from before it declared bankruptcy last year. The debtors are also looking to save another $300 million in costs from non-fleet reductions, he said.

Spirit has already reduced some of its Airbus fleet and furloughed pilots and flight attendants to cut costs as it shrinks its network, although some cabin crew have been called back to work before spring break.

Spirit has reached an agreement in principle with its creditors on the plan, Huebner said, adding that the secured lenders will provide “additional material liquidity to Spirit by releasing cash guarantees.”

In its second bankruptcy, Spirit held deal talks with Spirit Frontier AirlinesAnd with investment firm Castlelake. Nothing was achieved, but Hubner hinted at the possibility of the group returning to the table.

“This emergence will allow Spirit to do many things from a position of strength and stability, including considering potential future industrial transactions,” Huebner said.

The path of the soul will be a challenge. It would pit a smaller version of Spirit against ever-larger competitors that dominate the U.S. market. Some U.S. budget airlines have struggled due to higher labor and other costs post-Covid, a growing consumer shift in favor of upscale travel and increased competition from major airlines offering discount fares.

“Because every day matters, and every dollar matters, the airline industry is every bit as competitive today with this deal as it was last Friday, and we must — and we will — secure what we need from other stakeholders and then begin a high-speed march to get this storied company out of Chapter 11 as soon as possible so it can write its next chapters from a position of strength,” Huebner said.

Soul was faced with a unique challenge by summoning the massive engine from Pratt & Whitney And a failed plan to acquire it JetBlue Airlinesa deal that was struck down by a federal judge in early 2024.

Spirit expected to make a net profit of $252 million last year, according to a court filing in December 2024. But it said in an August report that it lost nearly $257 million in a period of months spanning March 13, after it emerged from its first Chapter 11 bankruptcy, through the end of June. It filed for Chapter 11 bankruptcy protection again less than a month later.