On August 12, 2025, Spirit Airlines, Inc. sent shockwaves through the aviation industry by announcing doubts about its ability to continue operations, just months after emerging from Chapter 11 bankruptcy in March 2025 with a restructuring led by billionaire investor Ken Griffin and other major bondholders.
The low-cost carrier, now trading under the ticker FLYY, disclosed in a Securities and Exchange Commission (SEC) filing that its auditor, Ernst & Young LLP, issued an unqualified opinion expressing “going concern” doubts for the period ending December 31, 2024, as reported by Reuters.
This development, coupled with a 47% stock price plunge to $1.83, highlights the airline’s precarious financial state despite significant debt reduction and new investments following its bankruptcy exit.
Spirit Airlines’ latest SEC filing revealed that Ernst & Young LLP flagged substantial doubts about the company’s ability to remain a going concern, an accounting term indicating uncertainty about surviving the next 12 months without liquidating assets or ceasing operations.
The airline reported a whopping $143 million loss in the first quarter of 2025, following a staggering $1.2 billion loss in 2024, driven by high fuel costs, intense competition, and Pratt & Whitney engine issues grounding aircraft, according to Reuters and VisaVerge.com.
These losses persisted despite Spirit’s bankruptcy restructuring, which eliminated $795 million in debt and secured $350 million in new equity from investors, including Citadel Advisors, led by Ken Griffin, Pacific Investment Management Co. (PIMCO), and a Franklin Templeton subsidiary.
The restructuring, approved by the U.S. Bankruptcy Court for the Southern District of New York on February 20, 2025, also included $840 million in new senior secured debt and a $300 million revolving credit facility, as detailed by Spirit’s investor relations.
However, analysts, including Gary Leff of View from the Wing, argue that the $350 million equity injection is insufficient, projecting that Spirit could burn through it in months given its 2024 operating margin of -22.5% and $1.1 billion in operating losses on $4.9 billion in revenue.
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Ken Griffin’s Role and Post-Bankruptcy Challenges
Ken Griffin’s Citadel Advisors, holding approximately $149.3 million in Spirit’s bond notes, played a role in the airline’s privatization, alongside PIMCO and Franklin Templeton, as reported by TheStreet.
The group took control after Spirit rejected a merger offer from Frontier Airlines in February 2025, which included $400 million in debt and 19% of Frontier’s equity, deemed less valuable than Spirit’s standalone plan.
The restructuring canceled existing stock (SAVE), with new shares relisted on the New York Stock Exchange under FLYY on April 29, 2025, opening at $8.28 but plummeting to $5.99 by June and $1.83 by August 12, 2025, after the going concern warning.
Despite the financial overhaul, Spirit faces ongoing challenges: Pratt & Whitney engine recalls, rising labor and airport costs, and shifting consumer demand for premium services.
The airline’s attempt to pivot from its ultra-low-cost model by introducing Wi-Fi, premium seating like “Go Big” and “Go Comfy,” and enhanced loyalty programs has yet to reverse its financial decline, as noted by VisaVerge.com.
Spirit’s network cuts, including a 17% reduction in flights by March 2025 and the elimination of routes like Aguadilla and Puerto Vallarta, reflect efforts to focus on profitable markets like Miami, where it launched 30 new routes, but these changes have not stemmed losses.
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Industry and Retail Investor Reactions
The going concern warning triggered a swift market reaction, with Spirit’s stock dropping 47% on August 12, 2025, as noted in an X post by @PipandSammy, which described the decline to an all-time low of $1.83.
Another post by @xMarketNews highlighted the irony of Griffin’s 2024 acquisition, stating, “Ken Griffin Acquired Spirit Airlines as a Major Stakeholder in 2024. NOW, Spirit Airlines Warns It May Not Survive Another Year.”
Critics on X, like @bokehbailey, accused Griffin of market manipulation, reflecting broader investor skepticism about Spirit’s viability, despite its post-bankruptcy relisting.
Industry analysts, such as those cited by One Mile at a Time, question Spirit’s long-term strategy, noting that its $350 million infusion may only cover operating losses for a few months.
The failed JetBlue merger, blocked by the Biden administration in 2024, and Spirit’s rejection of Frontier’s offer have left the airline without a clear path to profitability, per Forbes and FlyerTalk.
Spirit’s 5% share of U.S. airline capacity and unique routes from cities like Latrobe, Pennsylvania, make its potential closure a concern for regional travelers, as noted by View from the Wing.
All in all, the situation has broader implications for the aviation industry, as Spirit’s struggles could reduce low-cost travel options and affect competition, particularly in Miami, per VisaVerge.com.
As Spirit navigates these challenges, its ability to restore investor confidence and achieve profitability remains uncertain, with the specter of closure looming large.
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