Spirit Airlines Inc.
03/16/2026 | Press release | Distributed by Public on 03/16/2026 15:23
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this annual report. Our discussion and analysis of fiscal year 2025 compared to fiscal year 2024 is included herein. The following Management's Discussion and Analysis of Financial Condition and Results of Operations describes the principal factors affecting our financial condition at December 31, 2025 and results of operations for the Period from March 13, 2025 through December 31, 2025 (the "Successor Period"), the Period from January 1, 2025 through March 12, 2025 (the "Current Predecessor Period"), and the twelve months ended December 31, 2024. Unless expressly stated otherwise, for discussion and analysis of fiscal year 2023 items and fiscal year 2024 compared to fiscal year 2023, please refer to Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations"in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the United States Securities and Exchange Commission on March 3, 2025 and is incorporated herein by reference.
Although GAAP requires that we report on our results for the Successor Period from March 13, 2025 through December 31, 2025 and the Current Predecessor Period from January 1, 2025 through March 12, 2025 separately, management views our operating results for the twelve months ended December 31, 2025 by combining the results of the Successor and Current Predecessor Periods because management believes such presentation provides the most meaningful comparison of our results to prior periods. We are not able to compare the operating results for the period from January 1, 2025 through March 12, 2025 to any of the previous periods reported in the consolidated financial statements and do not believe reviewing this period in isolation would be useful in identifying any trends in or reaching any conclusions regarding our overall operating performance. We believe the key performance indicators such as operating revenues and expenses for the combined Current Predecessor and Successor Period ended December 31, 2025 with the twelve months ended December 31, 2024 provide more meaningful comparisons to other periods and are useful in understanding operational trends. Additionally, there were no changes in policies between the periods and any material impacts as a result of fresh start accounting were included within the discussion of these changes.
We evaluate our financial performance utilizing various accounting principles generally accepted in the United States of America ("GAAP") and non-GAAP financial measures, including Adjusted CASM and Adjusted CASM ex-fuel. These non-GAAP financial measures are provided as supplemental information to the financial information presented in this annual report that is calculated and presented in accordance with GAAP and these non-GAAP financial measures are presented because management believes that they supplement or enhance management's, analysts' and investors' overall understanding of our underlying financial performance and trends and facilitate comparisons among current, past and future periods.
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in this annual report and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in the method of calculation and in the items being adjusted. We encourage investors to review our financial statements and other filings with the Securities and Exchange Commission in their entirety and not to rely on any single financial measure.
The information below provides an explanation of certain adjustments reflected in the non-GAAP financial measures and shows a reconciliation of non-GAAP financial measures reported in this annual report to the most directly comparable GAAP financial measures. Within the financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Per unit amounts presented are calculated from the underlying amounts.
Operating expenses per available seat mile ("CASM") is a common metric used in the airline industry to measure an airline's cost structure and efficiency.
We exclude loss (gain) on disposal of assets, special charges (credits), furlough, termination and retention-related expenses recorded in the third quarter of 2024 and in the first quarter of 2025 and litigation loss contingency adjustments recorded in the first and third quarters of 2024 to determine Adjusted CASM. We believe that also excluding aircraft fuel and related taxes ("Adjusted CASM ex-fuel") from certain measures is useful to investors because it provides an additional measure of management's performance excluding the effects of a significant cost item over which management has limited influence and increases comparability with other airlines that also provide a similar metric.
Presentation of Results
The accompanying statement of operations summary table presents the combined results of the Successor Period and Current Predecessor Period for the year ended December 31, 2025. Management believes this presentation is useful to facilitate a more meaningful comparison to the year ended December 31, 2024, which reflects a single reporting period, as our results for 2025 are otherwise presented in two separate periods due emergence and the application of fresh-start accounting.
| Successor | Predecessor | Non-GAAP Combined | Predecessor | |||||||||||||||||||||||||||||||||||
| Period from March 13, 2025 through December 31, 2025 | Period from January 1, 2025 through March 12, 2025 | Twelve Months Ended December 31, 2025 | Twelve Months Ended December 31, 2024 | Dollar Change |
Percent Change (1)
|
|||||||||||||||||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||||||||||||||||
| Operating revenues: | ||||||||||||||||||||||||||||||||||||||
| Passenger | $ | 2,979,281 | $ | 740,610 | $ | 3,719,891 | $ | 4,811,752 | $ | (1,091,861) | (22.7) | % | ||||||||||||||||||||||||||
| Other | 62,112 | 14,744 | 76,856 | 101,669 | (24,813) | (24.4) | % | |||||||||||||||||||||||||||||||
| Total operating revenues | 3,041,393 | 755,354 | 3,796,747 | 4,913,421 | (1,116,674) | (22.7) | % | |||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||
|
Salaries, wages and benefits |
1,132,622 | 308,585 | 1,441,207 | 1,689,083 | (247,876) | (14.7) | % | |||||||||||||||||||||||||||||||
| Aircraft fuel | 779,027 | 219,922 | 998,949 | 1,479,203 | (480,254) | (32.5) | % | |||||||||||||||||||||||||||||||
| Aircraft rent | 428,332 | 120,183 | 548,515 | 541,909 | 6,606 | 1.2 | % | |||||||||||||||||||||||||||||||
| Landing fees and other rents | 304,483 | 87,001 | 391,484 | 451,008 | (59,524) | (13.2) | % | |||||||||||||||||||||||||||||||
| Depreciation and amortization | 190,244 | 54,853 | 245,097 | 325,273 | (80,176) | (24.6) | % | |||||||||||||||||||||||||||||||
| Maintenance, materials and repairs | 159,599 | 47,498 | 207,097 | 217,738 | (10,641) | (4.9) | % | |||||||||||||||||||||||||||||||
| Distribution | 133,511 | 39,461 | 172,972 | 197,197 | (24,225) | (12.3) | % | |||||||||||||||||||||||||||||||
| Special charges (credits) | (30,004) | - | (30,004) | 36,029 | (66,033) | NM | ||||||||||||||||||||||||||||||||
| Loss (gain) on disposal of assets | (109,096) | 11,655 | (97,441) | 273,871 | (371,312) | NM | ||||||||||||||||||||||||||||||||
| Other operating | 534,186 | 153,395 | 687,581 | 807,488 | (119,907) | (14.8) | % | |||||||||||||||||||||||||||||||
| Total operating expenses | 3,522,904 | 1,042,553 | 4,565,457 | 6,018,799 | (1,453,342) | (24.1) | % | |||||||||||||||||||||||||||||||
| Operating income (loss) | (481,511) | (287,199) | (768,710) | (1,105,378) | 336,668 | (30.5) | % | |||||||||||||||||||||||||||||||
| Other (income) expense: | ||||||||||||||||||||||||||||||||||||||
| Interest expense | 160,847 | 47,682 | 208,529 | 219,094 | (10,565) | (4.8) | % | |||||||||||||||||||||||||||||||
| Loss (gain) on extinguishment of debt | 2,728 | (87) | 2,641 | (14,937) | 17,578 | NM | ||||||||||||||||||||||||||||||||
| Capitalized interest | (1,245) | (956) | (2,201) | (18,087) | 15,886 | (87.8) | % | |||||||||||||||||||||||||||||||
| Interest income | (23,396) | (8,873) | (32,269) | (48,324) | 16,055 | (33.2) | % | |||||||||||||||||||||||||||||||
| Other (income) expense | 748 | 902 | 1,650 | (65,694) | 67,344 | (102.5) | % | |||||||||||||||||||||||||||||||
| Special charges, non-operating | 28,991 | 5,511 | 34,502 | 15,493 | 19,009 | NM | ||||||||||||||||||||||||||||||||
| Reorganization (gain) expense | 2,190,726 | (421,464) | 1,769,262 | 96,780 | 1,672,482 | NM | ||||||||||||||||||||||||||||||||
| Total other (income) expense | 2,359,399 | (377,285) | 1,982,114 | 184,325 | 1,797,789 | 975.3 | % | |||||||||||||||||||||||||||||||
| Income (loss) before income taxes | (2,840,910) | 90,086 | (2,750,824) | (1,289,703) | (1,461,121) | 113.3 | % | |||||||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (8,241) | 17,870 | 9,629 | (60,208) | 69,837 | (116.0) | % | |||||||||||||||||||||||||||||||
| Net income (loss) | $ | (2,832,669) | $ | 72,216 | $ | (2,760,453) | $ | (1,229,495) | $ | (1,530,958) | 124.5 | % | ||||||||||||||||||||||||||
(1) "NM" means not meaningful. Indicates that the year-over-year percentage change is not meaningful or greater than 100%.
2025 Year in Review
Overview
Spirit Aviation Holdings, Inc. ("Spirit") and its consolidated subsidiaries (together with Spirit, the "Company"), headquartered in Dania Beach, Florida, is a leading low-fare carrier committed to offering an enhanced travel experience with flexible, affordable options. Our network is supported by an all-Airbus S.A.S. ("Airbus") fleet. We serve destinations throughout the United States, Latin America and the Caribbean.
During the second quarter of 2025, we announced updates to our Free Spirit® Loyalty Program and onboard experience. These updates are part of our ongoing initiatives to provide more value and comfort, along with an enhanced Guest experience. Additionally, during the second quarter of 2025, we announced changes in the naming of our travel options: Spirit First(formerly Go Big), Premium Economy(formerly Go Comfy) and Value(formerly Go).
Updates to our Premium Economy(formerly Go Comfy)product included the following:
•introduction of more than 40 extra-legroom seats with 32-inch pitch across 7 rows (blocked middle seats will be phased out as aircraft are reconfigured with extra-legroom seating)
•carry-on bag included with Premium Economybookings, as well as 25% discount on food and beverages, no change or cancel fees, and Priority Boarding
•bookings opened May 15, with availability on flights started July 9
Enhancements to our Free Spirit program included the following:
•redemptions of points across all three travel options (Spirit First, Premium Economy and Value)
•complimentary seat upgrades for Free Spirit Status and co-branded Mastercard cardholders
•upgrade benefit expanded to one additional Guest on the reservation
•two free checked bags for Free Spirit Credit Cardholders and a new Free Spirit Debit Card scheduled to launch later this year
These changes are designed to build Guest loyalty, improve brand perception and give travelers more opportunities to experience and enjoy our premium options.
2024 Chapter 11 Proceedings
Emergence from 2024 Bankruptcy
On November 18, 2024, Spirit Airlines commenced a voluntary case under chapter 11 of title 11 of the Bankruptcy Code in the Bankruptcy Court, and, on November 25, 2024, certain of Spirit Airlines' subsidiaries (together with Spirit Airlines, the "Company Parties") also filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court and joined the 2024 Bankruptcy Case (the "Prior Bankruptcy", "2024 Bankruptcy" or "2024 Chapter 11 Bankruptcy"). On February 20, 2025, the Bankruptcy Court entered an order (the "Confirmation Order") confirming the First Amended Joint Chapter 11 Plan of Reorganization of Spirit Airlines, Inc. and Its Debtor Affiliates(the "Plan"). On March 12, 2025 (the "Emergence Date" or the "Effective Date"), we emerged from the 2024 Bankruptcy in accordance with the Plan. Since November 18, 2024, and through the Emergence Date, the Company Parties operated their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. Refer to "Notes to Consolidated Financial Statements-4. Emergence from Voluntary Reorganization under the 2024 Chapter 11 Bankruptcy" for additional information.
Plan of Reorganization
On the Emergence Date, all conditions precedent to the effectiveness of the Plan were either satisfied or waived, and we emerged from the 2024 Bankruptcy. In accordance with the Plan and effective as of the Emergence Date:
•Cancellation of Senior Secured Notes and Convertible Notes.The then-outstanding Senior Secured Notes (Class 4 Claims) and Convertible Notes (Class 5 Claims) were canceled and terminated. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
•Exit Secured Notes.Certain subsidiaries of Spirit issued $840.0 million of senior secured notes due 2030 (the "Exit Secured Notes"), at an interest rate of (x) 12.00% per annum, of which 8.00% per annum shall be payable in cash and 4.00% per annum shall be payable in-kind or (y) at 11.00% per annum payable in cash, to certain creditors in the Prior Bankruptcy. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
•Exit Revolving Credit Facility. Spirit and certain of its subsidiaries entered into Amended and Restated Credit and Guaranty Agreement with the lenders of the revolving credit facility due in 2026 ("Exit RCF" or "Exit Revolving Credit Facility") that provides revolving credit loans and letters of credit in an aggregated amount equal to $275.0 million and an uncommitted incremental revolving credit facility up to $25.0 million. The commitment of $275.0 million will be reduced to $250.0 million on September 30, 2026. Concurrently, Spirit Airlines paid the then-outstanding Revolving Credit Facility of $300.0 million (Class 3 Claims) in full. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
•Termination of the Debtor-in-Possession Financing. Spirit's Parties' $300.0 million senior secured superpriority debtor-in-possession facility (the "DIP Facility") that the Company Parties previously entered into was fully repaid and subsequently terminated. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
•Common Stock and Warrants.Spirit issued 16,067,305 shares of a single class of common stock (the "Common Stock") and 24,255,256 warrants to purchase shares of Common Stock (the "Warrants") to certain creditors in the Prior Bankruptcy, as further described in "Notes to Consolidated Financial Statements-12. Equity" and certain adjustments set forth in the Plan.
•Cancellation of Prior Equity Securities.All Old Common Stock, unvested equity awards, any outstanding PSP loan warrants and all other equity interests in Spirit Airlines that were outstanding immediately prior to the Emergence Date were terminated and canceled. Refer to "Notes to Consolidated Financial Statements-12. Equity" for additional information.
•Settlement of Claims and Fees.General Administrative Claims, Professional Fee Claims, and fees payable to the U.S. Trustee were or will be paid in full.
•Unimpaired Claims.Other Secured Claims (Class 1 Claims) and Other Priority Claims (Class 2 Claims) were paid or will be paid in full in the ordinary course, were reinstated, or otherwise rendered unimpaired. General Unsecured Claims (Class 6 Claims) were reinstated or otherwise rendered unimpaired.
•Election of Directors.Spirit appointed new members to its board of directors and the directors of Spirit Airlines stepped down.
•Charter and Bylaws. Pursuant to the Plan, Spirit amended and restated its certificate of incorporation (the "Charter") and bylaws (the "Bylaws"), each of which became effective on the Effective Date.
•Holding Company Reorganization. Spirit completed a corporate reorganization (the "Corporate Reorganization") pursuant to which Spirit became the new parent company, with Spirit Airlines becoming a wholly owned subsidiary of Spirit and converting from a Delaware corporation to a Delaware limited liability company. Spirit became the successor issuer to Spirit Airlines for SEC reporting purposes pursuant to Rule 15d-5 of the Exchange Act.
The costs of efforts to restructure our capital, prior to and during the 2024 Bankruptcy, along with all other costs incurred in connection with the Prior Bankruptcy, have been material.
Reorganization Items
Any expenses and losses incurred or realized as of or subsequent to November 18, 2024 through March 12, 2025 and as a direct result of the 2024 Bankruptcy, are recorded within reorganization (gain) expense on our consolidated statements of operations. During the Current Predecessor Period, we recorded $421.5 million of reorganization gain. Refer to "Notes to Consolidated Financial Statements-4. Emergence from Voluntary Reorganization under the 2024 Chapter 11 Bankruptcy" for additional information.
Reorganization items incurred or realized on or subsequent to August 29, 2025 through December 31, 2025 as a direct result of the 2025 Bankruptcy, are recorded within reorganization (gain) expense on our consolidated statements of operations. During the Successor Period, we recorded $2,190.7 million of reorganization expense. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
Special Charges, Non-Operating
Expenses incurred prior to November 18, 2024 or after March 12, 2025 in relation to the 2024 Bankruptcy and expenses incurred prior to August 29, 2025 in relation to the 2025 Bankruptcy are recorded within special charges, non-operating on our consolidated statements of operations.
During the twelve months ended December 31, 2025, we recorded charges of $34.5 million ($29.0 million in the Successor Period and $5.5 million in the Current Predecessor Period). Charges incurred during the Successor periods primarily related to post-emergence restructuring-related expenses, including professional fees, other related costs and termination and retention expenses. Charges incurred during the Current Predecessor Period primarily consisted of professional and other fees. Refer to "Notes to Consolidated Financial Statements-6. Special Charges and Credits" for additional information.
Fresh Start Accounting
In connection with the emergence from the 2024 Bankruptcy and in accordance with ASC 852, we qualified for and adopted fresh start accounting on the Emergence Date because (1) the holders of the then existing common shares of the Predecessor received less than 50% of the Common Stock shares of the Successor outstanding upon emergence and (2) the reorganization value of the Predecessor's assets immediately prior to confirmation of the Plan of $8,720 million was less than the total of all post-petition liabilities and allowed claims of $9,819 million.
In accordance with ASC 852, upon adoption of fresh start accounting, the reorganization value derived from the enterprise value as disclosed in the Plan was allocated to our assets and liabilities based on their fair values in accordance with FASB ASC Topic No. 805 - Business Combinations (ASC 805) and FASB ASC Topic No. 820 - Fair Value Measurements (ASC 820), with limited exceptions (such as deferred taxes). The amount of deferred income taxes recorded due to the fair value adjustments to assets and liabilities was determined in accordance with FASB ASC Topic No. 740 - Income Taxes.
With the application of fresh start accounting, we allocated our reorganization value to individual assets based on their estimated fair value. The reorganization value represents the fair value of the Successor's total assets before considering certain liabilities and is intended to approximate the amount a willing buyer would pay for the Successor's assets immediately after restructuring. The Plan confirmed by the Bankruptcy Court estimated a range of enterprise values between $6.1 billion and $6.8 billion.
The following table reconciles the enterprise value to the reorganization value of Successor's assets that has been allocated to our individual assets as of the Fresh Start Reporting Date (in millions):
| Fresh Start Reporting Date | |||||
| Enterprise Value | $ | 6,450 | |||
| Plus: Excess cash and cash equivalents | 508 | ||||
| Plus: Non-operating assets | 447 | ||||
| Plus: Current and other liabilities (excluding debt) | 1,315 | ||||
| Reorganization Value | $ | 8,720 | |||
To determine fair value adjustments as of the Effective Date, we engaged third-party valuation experts to conduct an analysis of the consolidated balance sheets to determine the fair values of each balance. The material adjustments were made to property plant and equipment, leased liabilities and ROU assets, available-for-sale, and debt. Refer to "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy" for additional information.
2025 Chapter 11 Proceedings
Voluntary Filing under the 2025 Chapter 11 Bankruptcy
On August 29, 2025 (the "Petition Date"), Spirit Aviation Holdings, Inc. ("Spirit"), as well as Spirit Airlines, LLC (formerly known as Spirit Airlines, Inc.) ("Spirit Airlines"), Spirit IP Cayman Ltd. ("Brand IP Issuer"), Spirit Loyalty (together with Brand IP Issuer, the "Co-Issuers"), Spirit Finance Cayman 1 Ltd., Spirit Finance Cayman 2 Ltd. (collectively, the "Debtors") each a direct or indirect subsidiary of Spirit, each filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court (the "Chapter 11 Cases" or "2025 Bankruptcy" or "2025 Chapter 11 Bankruptcy Proceedings"). Each of the Debtors in the Chapter 11 Cases (other than Spirit) had previously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 18, 2024. The Debtors emerged from the Prior Bankruptcy under the First Amended Joint Plan of Reorganization which was confirmed pursuant to an order of the Bankruptcy Court on February 20, 2025 and which became effective on March 12, 2025. Refer to "Notes to Consolidated Financial Statements- 4. Emergence from Voluntary Reorganization under the 2024 Chapter 11 Bankruptcy", for additional information related to the prior 2024 bankruptcy ("2024 Bankruptcy").
Debtor-In-Possession
We are currently operating as a debtor-in-possession in accordance with the applicable provisions of the Bankruptcy Code. The Bankruptcy Court has approved motions we filed that were designed primarily to mitigate the impact of the Chapter 11 Cases on our operations, customers and employees. In general, as debtors-in-possession under the Bankruptcy Code, we are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to first day motions filed with the Bankruptcy Court, we received approval from the Bankruptcy Court for a variety of "first day" motions to continue our ordinary course operations during the Chapter 11 Cases.
Automatic Stay
Subject to certain exceptions under the Bankruptcy Code, pursuant to Section 362 of the Bankruptcy Code, the filing of Spirit's Chapter 11 Cases automatically stayed the continuation of most legal proceedings or the filing of other actions against or on behalf of Spirit or our property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of Spirit's bankruptcy estate, unless and until the Bankruptcy Court modifies or lifts the automatic stay as to any such claim. Notwithstanding the general application of the automatic stay described above and other protections afforded by the Bankruptcy Code, governmental authorities may determine to continue actions brought under their police and regulatory powers.
Executory Contracts
Subject to certain exceptions, under the Bankruptcy Code, we may assume, amend or reject certain executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves us from performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a prepetition general unsecured claim for damages caused by such deemed breach. Generally, the assumption of an executory contract or unexpired lease requires us to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance. Accordingly, any description of an executory contract or unexpired lease with us in this document, including where applicable a quantification of our obligations under any such executory contract or unexpired lease, is qualified by any overriding rejection rights we have under the Bankruptcy Code.
On September 5, 2025, we filed a motion under Section 1110 of the Bankruptcy Code ("Section 1110") to preserve our right to retain and operate certain aircraft, aircraft engines and other equipment (collectively "Aircraft Equipment") that are leased or subject to a security interest or conditional sale contract that is specifically governed by Section 1110. In this motion, we sought an order authorizing us to enter into Section 1110 agreements either to perform all of the obligations under the leases, security agreements or conditional sale contracts and cure all defaults thereunder (other than defaults constituting a breach of provisions relating to the filing of the Chapter 11 Cases, our insolvency or other financial condition) or to extend the Section 1110(a)(1) deadline and enter into 1110(b) stipulations with the Aircraft Equipment counterparties (the "Aircraft Equipment Counterparties") to, among other things, extend 60-day period set forth in section 1110(a) ("60-day period"). On
October 7, 2025, the Bankruptcy Court entered an order approving the motion. On December 10, 2025, the Bankruptcy Court extended the time period for us to assume or reject unexpired leases to March 30, 2026.
After the 60-day period approval on October 27, 2025, with the majority approved on November 7, 2025, the Debtors have filed with the Bankruptcy Court multiple stipulation orders seeking approval under Section 1110(b) to extend the 60-day period set forth in Section 1110(a) of the Bankruptcy Code with respect to certain equipment and aircraft agreements.
On October 21, 2025, the Bankruptcy Court entered an order granting the Debtors' First Omnibus Motion to reject certain equipment leases pursuant to Section 365 of the Bankruptcy Code, authorizing the rejection of these leases. On November 20, 2025 and December 23, 2025, the Bankruptcy Court approved the Debtors' Second Omnibus Motion and the Debtors' Third Omnibus Motion, respectively, to reject additional equipment lease agreements. Pursuant to these orders, as of December 31, 2025, we had rejected the lease agreements related to 83 aircraft and 3 engines.
In addition, on October 27, 2025, we notified the Aircraft Counterparties of the amounts required to bring certain related agreements current following the 60-day period and began making payments associated with certain executory contracts. In addition, we made adequate protection payments under the Revolving Credit Facility for continued use of the collateralized assets.
Following the October 27, 2025 60-day period approval, with the majority approved on November 7, 2025, we have filed with the Bankruptcy Court multiple stipulation orders seeking approval under Section 1110(b) to extend the 60-day period set forth in Section 1110(a) of the Bankruptcy Code with respect to certain equipment and aircraft agreements.
On December 5, 2025, the Bankruptcy Court approved a restructuring support agreement with Carlyle Aviation Management Limited, a lessor, to assume five amended leases as of the assumed effective date pursuant to Section 365 of the Bankruptcy Code.
On December 23, 2025, the Bankruptcy Court entered an order authorizing us to enter into a restructuring agreement with the IAE Parties (affiliates of Pratt & Whitney) to settle disputes over certain engines, provide financial support in the form of up to $140.0 million in credits, ensure ongoing maintenance support and access to engines at competitive rates and resolve outstanding invoices through a mix of credits and cash payments. The order also authorized us to enter into short term engine leases for up to 100 PW1100G-JM engines removed from aircraft subject to previously rejected leases. Subsequently, on February 4, 2026, the parties entered into a definitive agreement.
Potential Claims
We have filed with the Bankruptcy Court schedules and statements setting forth, among other things, our assets and liabilities and that of our subsidiaries, subject to the assumptions to be filed in connection therewith. The schedules and statements may be subject to further amendment or modification after filing. As part of the Chapter 11 Cases, persons and entities believing that they have claims or causes of action against us may file proofs of claim evidencing such claims. Certain holders of pre-petition claims that are not governmental units were required to file proofs of claim by the deadline for general claims, which was on January 27, 2026 (the "Bar Date").
These claims will be reconciled to amounts recorded in our accounting records. Differences in amounts recorded and claims filed by creditors will be investigated and resolved, including through the filing of objections with the Bankruptcy Court, where appropriate.
In addition, as a result of this process, we may identify additional liabilities that will need to be recorded or reclassified to liabilities subject to compromise in the consolidated balance sheets. In light of the substantial number of claims that may be filed, the claims resolution process may take considerable time to complete and may continue for the duration of our bankruptcy cases.
NYSE American Listing Status
On November 18, 2024, we received written notice from the NYSE notifying us that, as a result of the 2024 Bankruptcy and in accordance with NYSE Listed Company Manual Section 802.01D, the NYSE had determined that Spirit Airlines' shares of common stock, par value $0.0001 per share (the "Old Common Stock"), would be delisted from the NYSE and that trading of the shares of Old Common Stock on NYSE was immediately suspended. As a result of the suspension and expected delisting, the shares of Old Common Stock commenced trading on the OTC Pink Market under the symbol
"SAVEQ" on November 19, 2024 and continued through the Emergence Date. Upon emergence, all equity securities of Spirit Airlines outstanding prior to the Effective Date, including Old Common Stock, were canceled, released and extinguished, and of no further force or effect and without any need for a holder of Old Common Stock to take further action with respect thereto.
Following emergence, and consistent with our contractual obligations, we applied to list our issued shares of Common Stock on the NYSE American stock exchange. Refer to "Notes to Consolidated Financial Statements-12. Equity" for additional information. Trading of our shares of Common Stock began on April 29, 2025, under the symbol "FLYY."
Subsequently, on September 2, 2025, we received a notice from the staff of NYSE Regulation ("NYSE Regulation") that it had commenced proceedings to delist our Common Stock, par value $0.0001, from NYSE American LLC ("NYSE American") and that trading in the Common Stock was immediately suspended on September 2, 2025. NYSE Regulation decided that we are no longer suitable for listing pursuant to Section 1003(c)(iii) of the NYSE American Company Guide after we disclosed in our August 29, 2025 Current Report on Form 8-K that we and our Debtor affiliates filed voluntary petitions for reorganization under chapter 11 of title 11 of the Bankruptcy Code in the Bankruptcy Court on August 29, 2025.
NYSE American submitted an application to the U.S. Securities and Exchange Commission to delist the Common Stock upon completion of applicable procedures. We did not appeal the determination and, therefore, we were delisted from NYSE American. As a result of the suspension and delisting, our Common Stock is being traded in the OTC Pink Limited Market under the symbol "FLYYQ". The OTC Pink Limited Market is a significantly more limited market than NYSE American, and quotation on the OTC Pink Limited Market likely results in a less liquid market for existing and potential holders of our Common Stock to trade in our Common Stock and could further depress the trading price of the Common Stock. We can provide no assurance that our Common Stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our Common Stock on this market, or whether the trading volume of our Common Stock will be sufficient to provide for an efficient trading market. The transition to over-the-counter markets will not affect our business operations.
Registration Rights Agreement Consent and Waiver
On March 5, 2026, the Company and certain beneficial and record holders (the "Holders") of the shares of Common Stock and the warrants of the Company entered into a consent and waiver (the "Consent and Waiver") to that certain Registration Rights Agreement, dated as of March 12, 2025 (the "Registration Rights Agreement").
Pursuant to the Consent and Waiver, the Holders, agreed to waive any rights under Sections 2.1, 2.2 and 2.3 of the Registration Rights Agreement and consented to the Company filing a post-effective amendment to the registration statement on Form S-1 to terminate the registration of all shares of Common Stock registered under the Securities Act of 1933, as amended, pursuant to such registration statement.
Restructuring Support Agreement
On March 13, 2026, the Debtors entered into a Restructuring Support Agreement ("RSA") with certain holders representing approximately (i) 74.6% of the aggregate principal amount of the new money term loans issued under the Company's debtor-in-possession credit agreement, (ii) 71.8% of the roll-up DIP loans issued thereunder, and (iii) 60.0% of the Company's non-rolled up PIK Toggle Senior Secured Notes due 2030. The RSA contemplates implementation of a restructuring through a proposed plan of reorganization (the "Proposed Plan"). The Debtors filed the Restructuring Support Agreement and the Plan with the Bankruptcy Court on March 13, 2026.
Pursuant to the RSA, the Company will, among other things, (i) use $150.0 million of encumbered cash to prepay a portion of the DIP term loans and related accrued interest, (ii) maintain minimum levels of encumbered cash while receiving lender consent to access certain restricted accounts, and (iii) make a $100.0 million payment to holders of allowed DIP loan superpriority claims on the effective date of the Proposed Plan. The RSA also contemplates that, on the Proposed Plan effective date, the reorganized Company will issue new equity interests primarily to holders of roll-up DIP loans, subject to dilution for a management incentive plan and certain settlement distributions, and approximately 2% of new equity interests to holders of prepetition secured notes, which may be issued in the form of warrants.
In addition, the Proposed Plan contemplates the issuance of new senior secured exit financing, including exit secured loans and either (i) a $275.0 million senior secured revolving credit facility or (ii) a $75.0 million term loan facility and a $200.0 million reinstated revolving credit facility. The RSA also provides that distributable proceeds from specified asset sales will be distributed to holders of certain DIP claims in accordance with the Proposed Plan.
The RSA includes certain milestones for the Chapter 11 proceedings and the Proposed Plan process, and may be terminated under specified circumstances, including failure to satisfy such milestones or if the Company's board determines that continued performance would be inconsistent with its fiduciary duties. The Proposed Plan remains subject to amendment, and to Bankruptcy Court approval and the satisfaction of various conditions precedent, and therefore there can be no assurance that the transactions contemplated by the RSA or the Proposed Plan will be consummated.
Going Concern
On March 12, 2025, we emerged from the Chapter 11 Cases in accordance with the Plan. As part of the reorganization, we successfully restructured certain of our debt obligations, established new financing arrangements and issued new equity securities consisting of new Common Stock and new warrants. However, we have continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel, resulting in a difficult pricing environment and diminished revenues. As a result, we continue to experience challenges and uncertainties in our business operations.
Since our emergence from the 2024 Chapter 11 Bankruptcy, we have taken certain measures to address these challenges, including the implementation of product enhancements, strategic reductions in certain markets and capacity, consummation of sale-leaseback transactions related to certain of our owned spare engines and other discretionary cost reduction strategies, including the pilot furloughs announced in July and October 2025 and the flight attendant furloughs announced in September 2025. Also, on August 21, 2025, we borrowed the entire available amount of $275.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility will mature on March 12, 2028.
Effective August 15, 2025 and August 20, 2025, we entered into two amendments (the "Amendments") with our primary credit card processor. On August 15, 2025, we agreed to make an additional transfer of $50.0 million in cash to a pledged account in favor of the credit card processor. This amount is recorded in restricted cash within our consolidated balance sheets. On August 20, 2025, we agreed to allow the processor (i) to hold back up to $3.0 million per day until the processor's exposure is fully collateralized and (ii) to remain fully collateralized as the processor's exposure increases or decreases. In exchange, the processor agreed (i) to extend the term of the Card Processing Agreement from the then current December 31, 2025 expiration date to December 31, 2027, with two automatic one-year extensions unless either party provides a notice of non-renewal not less than 90 days prior to the end of the then-effective term, and (ii) to remove the existing minimum liquidity trigger for holdbacks under the Card Processing Agreement.
On August 29, 2025, we and our Debtor affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
Since the Petition Date, we have been operating our businesses as a debtor-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. We received approval from the Bankruptcy Court for a variety of "first day" motions to continue our ordinary course operations during the Chapter 11 Cases, and approval of various post-petition liquidity initiatives described in further detail below. However, for the duration of the Chapter 11 Cases, our operations and ability to develop and execute our business plan, our financial condition, liquidity and our continuation as a going concern are subject to a high degree of risk and uncertainty associated with the Chapter 11 Cases. Our ability to continue as a going concern is dependent upon, among other things, our ability to become profitable and maintain profitability, our ability to access sufficient liquidity and our ability to successfully implement a plan of reorganization. As discussed further below, we have entered into a DIP Facility for purposes of accessing ongoing liquidity during the Chapter 11 Cases. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information. The outcome of the Chapter 11 Cases is dependent upon factors that are outside of our control, including actions of the Bankruptcy Court. We can give no assurances that we will be able to secure additional sources of funds to support its operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.
We have evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year from the filing of this Annual Report on Form 10-K. Based on such evaluation, management believes there is substantial doubt about our ability to continue as a going concern. During the Chapter 11 Cases, our ability to continue as a going concern is contingent upon our ability to obtain approval and successfully implement the Proposed Plan, among other factors.
Our consolidated financial statements have been prepared assuming that we will continue to operate as a going concern, which contemplates our ability to successfully implement the Proposed Plan, our continuity of operations, realization of assets
and liquidation of liabilities in the normal course of business and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to our ability to continue as a going concern.
Summary of Results
In the Successor Period and Current Predecessor Period, we generated a pre-tax loss of $2,840.9 million and a pre-tax income of $90.1 million, respectively and recorded a net loss of $2,832.7 million and a net income of $72.2 million, respectively. This resulted in a net loss of $76.51 per share in the Successor Period and earnings of $0.66 per share in the Current Predecessor Period. These results compared to a pre-tax loss of $1,289.7 million and a net loss of $1,229.5 million, $11.23 loss per share, in 2024. The increase in pre-tax loss was primarily driven by higher non-operating expenses, including reorganization expense, other (income) expense and special charges, non-operating expense. These increases in non-operating expenses were partially offset by a decrease in operating expenses, primarily due to a decrease in our flight volume, including aircraft fuel, salaries, wages and benefits expense and other operating expense, as well as a net gain on disposal of assets and a decrease in depreciation and amortization expense. Fuel gallons consumed decreased by 25.8% and fuel price per gallon decreased by 9.0%, period over period. In addition, the increased net loss reflects a decrease in operating revenues due to a 28.3% decrease in our traffic and a 24.7% decrease in our capacity, as compared to 2024.
For the Successor Period and Current Predecessor Period, we had negative operating margins of 15.8% and 38.0%, respectively, on operating revenues of $3,041.4 million and $755.4 million, respectively. TRASM in 2025 was 9.51 cents, an increase of 2.6% compared to the prior year. Total revenue per passenger flight segment increased 6.6%, year over year, from $111.21 to $118.53.
During 2025, our Adjusted CASM ex-fuel was 9.24 cents as compared to 7.97 cents for 2024. The increase on a per-ASM basis was primarily due to increases in salaries, wages and benefits expense, aircraft rent expense, other operating expense, landing fees and other rents expense. These per-ASM increases were also driven by the semi-fixed nature of many of these costs in conjunction with a 24.7% year-over-year decrease in ASMs. The reduction in capacity was primarily driven by a lower number of aircraft available for service due to GTF engine issues, previously grounded aircraft held for sale, and other strategic initiatives, including reductions in flying on off-peak travel days to better align capacity with market demand.
During 2025, we added six new destinations: Belize City, Belize; Columbia, South Carolina; Chattanooga, Tennessee; Key West, FL; Grand Cayman, Cayman Islands; and Savannah, Georgia; of which as of December 31, 2025, we exited from Columbia, South Carolina and Chattanooga, Tennessee. During 2025, we took delivery of 3 aircraft under sale leaseback transactions and 1 aircraft under a direct operating lease, retired 2 A319ceos, sold 1 A320ceo, and rejected certain of our aircraft lease agreements from our existing fleet as part of the 2025 Bankruptcy, reducing our fleet of Airbus single-aisle aircraft from 213 to 131 aircraft. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information. As of December 31, 2025, our 131 Airbus A320-family aircraft fleet was comprised of 62 A320ceos, 19 A320neos, 29 A321ceos and 21 A321neos. As of December 31, 2025, we owned 48 aircraft, of which 21 aircraft were financed through fixed-rate long-term debt and 27 aircraft were financed through enhanced equipment trust certificates ("EETCs"). As of December 31, 2025, we had 83 leased aircraft, of which 70 aircraft were financed under operating leases and 13 aircraft would have been deemed finance leases resulting in failed sale leaseback transactions.
Operating Revenues
Our operating revenues are comprised of passenger revenues and other revenues.
Passenger revenues
Passenger revenues are primarily comprised of fares and related ancillary items such as bags, seats and other travel-related fees. Passenger revenues are generally recognized once the related flight departs. Accordingly, the value of tickets and ancillary products sold in advance of travel is included under our current liabilities as "air traffic liability," or "ATL", until the related air travel is provided. An unused ticket expires at the date of scheduled travel and is recognized as revenue at the date of scheduled travel.
Customers may elect to change or cancel their itinerary prior to the date of departure. In 2024, we launched our no change or cancel fee policy for our bundled travel options. Guests are required to pay the difference in fare if the new trip is more expensive or receive a credit if the new trip is less expensive. Any unused amount is placed in a credit shell which generally expires within 12 months or 5 years from the date the credit shell is created. Under U.S. Department of Transportation regulations effective August 2024, credit shells issued in lieu of a refund for airline-initiated cancellations, schedule changes, or
irregular operations (IROP) must remain valid for a minimum of five years from issuance. Credit shells can be used towards the purchase of a new ticket and other service offerings.
Prior to May 2024, credit shells generally expired 90 days from the date the credit shell was created. Credit shell amounts are recorded as deferred revenue and amounts expected to expire unused are estimated based on historical experience.
For credit shells that are expected to expire unused, we recognize the associated value proportionally during the period over which the remaining credit shells may be used. Estimating the amount of credits that will go unused involves some level of subjectivity and judgment and can be impacted by several factors including, but not limited to, changes to our ticketing policies, changes to our refund, exchange and credit shell policies and economic factors.
Guests may earn points based on their spending with the Free Spirit affinity credit card program which we have an agreement to sell points. The contract to sell points under this agreement has multiple performance obligations, as discussed below.
Our co-branded credit card agreement provides for joint marketing where cardholders earn points for making purchases using co-branded cards. During 2023, we extended our agreement with the administrator of the Free Spirit affinity credit card program through December 31, 2028. We account for this agreement consistently with the accounting method that allocates the consideration received to the individual products and services delivered. The value is allocated based on the relative stand-alone selling prices of those products and services, which generally consists of (i) points to be awarded, (ii) airline benefits, collectively referred to as the "award travel components," (iii) licensing of brand and access to member lists and (iv) advertising and marketing efforts, collectively referred to as the "marketing components." Revenue allocated to the award travel components are recorded in passenger revenues, while the revenue allocated to the marketing components are recorded in other revenues. We determined the estimate of the stand-alone selling prices by considering discounted cash flow analysis using multiple inputs and assumptions, including: (1) the expected number of points awarded and number of points redeemed, (2) the estimated stand-alone selling price of the award travel obligation and airline benefits, (3) licensing of brand and access to member lists and (4) the costs of advertising and marketing efforts.
Other revenues
Other revenues primarily consist of the marketing component of the sale of loyalty points to our credit card partner and commissions revenue from the sale of various items such as hotels and rental cars.
Substantially all of our revenues are denominated in U.S. dollars. We recognize revenues net of certain taxes and airport passenger fees, which are collected by us on behalf of airports and governmental agencies and remitted to the applicable governmental entity or airport on a periodic basis. These taxes and fees include U.S. federal transportation taxes, federal security charges, airport passenger facility charges and foreign arrival and departure taxes. These items are collected from customers at the time they purchase their tickets and are not included in our revenues. Upon collection from the customer, we record a liability within other current liabilities on our consolidated balance sheets and relieve the liability when payments are remitted to the applicable governmental agency or airport.
Operating Expenses
Our operating expenses consist of the following line items.
Salaries, Wages and Benefits.Salaries, wages and benefits expense includes the salaries, hourly wages, incentive payments and equity compensation paid to employees for their services, as well as the related expenses associated with employee benefit plans and employer payroll taxes.
Aircraft Fuel.Aircraft fuel expense includes the cost of jet fuel, related federal taxes, fueling into-plane fees and transportation fees.
Aircraft Rent. Aircraft rent expense consists of all minimum lease payments under the terms of our aircraft and spare engine lease agreements recognized on a straight-line basis. Aircraft rent expense also includes supplemental rent. Supplemental rent is primarily made up of probable and estimable return condition obligations on leased aircraft. As of December 31, 2025, 70 aircraft (excluding 13 aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions) and 16 spare engines are financed under operating leases.
Landing Fees and Other Rents.Landing fees and other rents include both fixed and variable facilities expenses, such as the fees charged by airports for the use or lease of airport facilities, overfly fees paid to other countries and the monthly rent paid for our headquarters facility.
Depreciation and Amortization.Depreciation and amortization expense includes the depreciation of fixed assets we own, leasehold improvements and the aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions. It also includes the amortization of capitalized software costs and heavy maintenance. Under the deferral method, the cost of our heavy maintenance is capitalized and amortized on a straight-line or usage basis until the earlier of the next estimated heavy maintenance event or the remaining lease term.
Maintenance, Materials and Repairs. Maintenance, materials and repairs expense includes parts, materials, repairs and fees for repairs performed by third-party vendors and in-house mechanics required to maintain our fleet. It excludes direct labor costs related to our own mechanics, which is included under salaries, wages and benefits. It also excludes the amortization of heavy maintenance expenses, which we defer under the deferral method of accounting and amortize as a component of depreciation and amortization expense.
Distribution. Distribution expense includes all of our direct costs, including the cost of web support, our third-party call center, travel agent commissions and related GDS fees and credit card transaction fees, associated with the sale of our tickets and other products and services.
Loss (gain) on Disposal of Assets. Loss (gain) on disposal of assets includes the net losses or gains on the disposal of our fixed assets, the net losses or gains resulting from our aircraft and engine sale leaseback transactions, the net losses or gains resulting from the sale of our aircraft and engines, impairment charges associated with our former plan to early retire and sell certain of our aircraft, the net losses or gains related to the write-off of obsolete assets and other adjustments, including the reclassification of aircraft previously classified as held for sale.
Special Charges (Credits).Special charges (credits) include a one-time assignment fee remitted to us, resulting from the assignment agreement for airline use and lease agreement at ORD for two gates to the AA Assignee, legal, advisory and other fees related to the former JetBlue Merger Agreement, as well as the former JetBlue Retention Award Program.
Other Operating Expenses. Other operating expenses include airport operations expenses and fees charged by third-party vendors for ground handling services and food and liquor supply service expenses, passenger re-accommodation expense, the cost of passenger liability and aircraft hull insurance, all other insurance policies except for employee related insurance, travel and training expenses for crews and ground personnel, professional fees, Wi-Fi, personal property taxes and all other administrative and operational overhead expenses. No individual item included in this category represented more than 5% of our total operating expenses.
Other (Income) Expense
Interest Expense.Interest expense in the Current Predecessor Period primarily represented interest and accretion related to our 8.00% senior secured notes, as well as the interest related to aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions and the financing of purchased aircraft. In addition, our interest expense for the Predecessor Period included the discount amortization related to our convertible notes due 2026 and the interest related to our convertible notes, which were canceled as of the Emergence Date.
Interest expense in the Successor Period primarily represented the interest related to the Exit Secured Notes, as well as the interest related to aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions and the financing of purchased aircraft. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information. In addition, as part of our emergence from bankruptcy and in compliance with ASC 852, we implemented fresh start accounting, which required us to record a fair value adjustment to our remaining outstanding debt as of the Fresh Start Reporting Date. The adjustments to each debt instrument are amortized through the remaining term of the related debt instrument to accrete the adjusted balance to its face value at the end of the loan. Accordingly, amortization of these fair value adjustments was recognized during the Successor Period. For further details, see "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy."
Interest expense in 2024 and 2023 primarily related to interest related to aircraft that would have been deemed finance leases resulting in failed sale leaseback transactions, the financing of purchased aircraft, the interest and accretion related to our 8.00% senior secured notes, the interest and discount amortization related to our convertible notes and favorable mark to market adjustments of the derivative liability related to our convertible notes due 2026.
Loss (gain) on Extinguishment of Debt.Loss on extinguishment of debt in the Successor Period was primarily related to the loss recognized due to the extinguishment of our "Series B" equipment notes issued under the 2017-1 pass through certificates. Gain on extinguishment of debt in the Current Predecessor period as well as in 2024 and 2023 was primarily related to the gain recognized due to the early extinguishment of certain of our outstanding fixed-rate term loans and was partially offset by the write-offs of related deferred financing costs. Refer to "Notes to Consolidated Financial Statements -14. Debt and Other Obligations" for more information.
Capitalized Interest. We capitalize the interest that is primarily attributable to the outstanding PDP balances as a percentage of the related debt on which interest is incurred. Capitalized interest represents interest cost incurred during the acquisition period of a long-term asset and is the amount which theoretically could have been avoided had we not paid PDPs for the related aircraft or engines. Capitalization of interest ceases when the asset is ready for service. Capitalized interest for Successor period and Current Predecessor period as well as for 2024 and 2023 primarily relates to the interest incurred on long-term debt. In addition, during 2024 and 2023, we capitalized interest related to the outstanding work in progress in connection to the building of our new headquarters.
Interest Income.For 2025, interest income represents interest income earned on cash, cash equivalents, short-term investments and restricted cash. For 2024 and 2023, interest income represents interest income earned on cash, cash equivalents, short-term investments and restricted cash, as well as interest earned on income tax refunds.
Other (Income) Expense.Other (income) expense for the Successor period and Current Predecessor period as well as for 2024 and 2023 includes realized gains and losses related to foreign currency transactions. In addition, other (income) expense for 2024 includes amounts received during the first quarter of 2024 from JetBlue under the terms of the JetBlue merger Termination Agreement.
Special Charges, Non-Operating. Special charges, non-operating for the Successor Period includes legal, advisory and other fees incurred outside of the 2024 Chapter 11 Cases (after the 2024 Emergence Date), as well as legal, advisory and other fees incurred outside of the 2025 Chapter 11 Cases (prior to the 2025 Petition Date). Furthermore, the Successor Period also includes amounts related to the pilot furloughs. Special charges, non-operating for the Current Predecessor Period includes legal, advisory and other fees incurred outside of the 2024 Chapter 11 Cases. Special charges, non-operating for 2024 includes legal, advisory and other fees incurred outside of the 2024 Chapter 11 Cases (prior to the 2024 Petition Date). We had no special charges, non-operating during 2023.
Reorganization Expense. Reorganization expense for the Successor Period includes charges related to lease terminations and rejections, the write-off of unamortized fair value adjustments as of the Petition Date associated with the Exit Secured Notes and Unsecured Term Loans, and the write-off of unamortized prepaid loan fees as of the Petition Date related to our revolving credit facility, as these obligations were classified as liabilities subject to compromise as of the Petition Date. Reorganization expense for the Successor Period also includes legal, consulting and other professional fees incurred in connection with our 2025 Chapter 11 Bankruptcy filing, as well as the recognition of the DIP backstop fee. These amounts were partially offset by a gain recognized in connection with the AerCap agreement.
Reorganization expense for the Current Predecessor Period includes losses related to the Equity Rights Offering ("ERO") distribution and backstop issuance, the reclassification of ERO-related expenses and Exit RCF financing costs, legal, advisory and other professional fees incurred in connection with the 2024 Chapter 11 cases, the extinguishment of unvested stock-based compensation awards, and the write-off of prepaid loan fees related to the prior revolving credit facility. Reorganization expense also reflects the recognition of Exit Secured Notes and Exit RCF financing costs, partially offset by gains recognized on Class 4 and Class 5 settlements.
Reorganization expense for 2024 includes legal, advisory and other fees incurred subsequent to Petition Date in relation to the Cases. In addition, reorganization expense included financing costs associated with the DIP term loan, the unamortized discount as of the Petition Date related to our 8.00% senior secured notes and convertible notes due 2025, as well as the unamortized debt issuance costs as of the Petition Date related to our 8.00% senior secured notes, convertible notes due 2025 and convertible notes due 2026. We had no reorganization expense in 2023.
Income Taxes
We account for income taxes using the asset and liability method. We record a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards. In assessing the realizability of the deferred tax assets, we consider whether it is more likely than not that some or all of the deferred tax assets will be realized. In evaluating the
ability to utilize our deferred tax assets, we consider all available evidence, both positive and negative, in determining future taxable income on a jurisdiction-by-jurisdiction basis.
Trends and Uncertainties Affecting Our Business
We believe that our operating and business performance is influenced by various factors, including those impacting the airline industry, broader travel trends and the specific markets and customer base we target. The following key factors may affect our future performance:
Ability to Execute our Strategy to Drive Higher Unit Revenues. We are currently in the process of implementing several strategic changes aimed at driving higher unit revenues and improving profitability, including redesigning our network, revising our fleet plan, making changes to our products and optimizing our cost structure. The success of this revised strategy depends on our ability to secure higher fares for our premium leisure travel options, while maintaining high load factors and generating strong ancillary revenue from guests opting for our à la carte offerings.
Ability to Drive Profitability While Reducing Network Capacity. We are reducing our capacity and re-aligning our network to enhance operational reliability and targeting increased revenue per ASM, focusing on markets where industry capacity and demand are better aligned, including a reduction in preferred access gates and other airport rents to align with our new network. The success of this strategy requires market consumer demand and other airlines' capacity to remain relatively stable, which should allow us to command a pricing premium and generate higher revenue per ASM. In addition, we are pursuing strategies to improve our revenue per ASM by enhancing our products.
Ability to Maintain Low Unit Costs.Our low-cost strategy includes, among other items, the use of a single aircraft type, the Airbus A320 family, and operating efficiently. Our use of a single aircraft type allows for simplified scheduling, maintenance, flight operations, safety management and training activities. Our cost structure has historically been among the lowest in the U.S. airline industry and we expect they will remain among the lowest in the U.S. airline industry. However, we do expect our unit costs to increase at a greater rate than many of our peers over the near term, or, until we resume a measured and consistent growth rate. In addition to broader industry inflationary pressures, we expect our unit costs will increase as we reduce our capacity due to having fewer units available to absorb fixed costs. Additionally, as we reduce our unionized labor force through various furlough programs, our average seniority will increase, resulting in higher average labor rates. Furthermore, due to lower consumer demand during off-peak periods, we reduced overall aircraft utilization rates, further pressuring unit costs. We remain focused on improving operational efficiency, increasing productivity and rightsizing our infrastructure as we reduce capacity and work towards optimizing our route structure to better compete in the current operating environment.
Impact of Pratt & Whitney GTF engine issues.In July 2023, Pratt & Whitney announced that it had determined that a rare condition in the powdered metal used to manufacture certain engine parts would require accelerated inspection of the GTF fleet, which powers the A320neo aircraft. Lower capacity resulting from manufacturer or supplier issues may lead to a significant adverse impact on our financial position and results of operations.
On June 4, 2025, we entered into an agreement (the "Agreement") with International Aero Engines, LLC ("IAE"), an affiliate of Pratt & Whitney, pursuant to which IAE provided us with a monthly credit, subject to certain conditions, as compensation for each of our aircraft unavailable for operational service due to GTF engine issues from January 1, 2025 through December 31, 2025. However, these credits did not fully offset the related costs and operational disruptions. As a result, the engine issues could continue to negatively impact our operating results. For additional information on the credits related to AOG days, refer to "Notes to Consolidated Financial Statements-18. Commitments, Contingencies and Other Contractual Arrangements."
In connection with our ongoing 2025 Chapter 11 Bankruptcy Proceedings, the lease agreements related to certain aircraft subject to these inspections were rejected as part of the bankruptcy process and we did not receive any additional credits under this agreement related to these aircraft.
In addition, in connection with the Chapter 11 Cases, we entered into a restructuring term sheet with IAE, dated December 3, 2025, and subsequently entered into a definitive agreement on February 4, 2026. For additional information refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings."
Competition. The airline industry is highly competitive. The principal competitive factors in the airline industry are fare pricing, total price, flight schedules, competition capacity, passenger amenities, number of routes served from a city, customer service, safety record, reputation, code-sharing relationships, loyalty programs and redemption opportunities. Price competition
occurs on a market-by-market basis through price discounts, changes in pricing structures, fare matching, target promotions and loyalty program initiatives. Airlines typically use discount fares and other promotions to stimulate traffic during normally slower travel periods in efforts to maximize unit revenue. The prevalence of discount fares can be particularly acute when a competitor has excess capacity that puts it under financial pressure to sell tickets.
Other U.S. carriers have developed a fare-class pricing approach, in which a portion of available seats may be sold at or near our prices, but without most product features available only to those passengers paying at higher fare levels on the same flight. Broad fare discounting may have the effect of diluting the profitability of revenues of high-cost legacy carriers, but these base fares have allowed network carriers to continue offering prices competitive to those of low-cost carriers on some flights or routes, while maintaining higher pricing to their traditional constituencies of corporate and less price-sensitive travelers. Moreover, the massive scale and network reach of legacy network carriers provides an inherent advantage for their loyalty reward programs, which represent a material portion of revenues in profitability of those carriers.
Seasonality and Volatility. Our results of operations for any interim period are not necessarily indicative of those for the entire year because the air transportation business is subject to significant seasonal fluctuations. Our business is subject to significant seasonal fluctuations particularly around summertime and peak holiday periods.
The air transportation business is also volatile and highly affected by economic cycles and trends. Consumer confidence and discretionary spending, fear of terrorism or war, weakening economic conditions, fare initiatives, fluctuations in fuel prices, labor actions, changes in governmental regulations on taxes and fees, weather, outbreaks of pandemic or contagious diseases and other factors have resulted in significant fluctuations in revenues and results of operations in the past. Finally, a significant portion of our operations are concentrated in markets such as South Florida, the Caribbean, Latin America and the Northeast and northern Midwest regions of the United States, which are particularly vulnerable to weather, airport traffic constraints and other delays.
Aircraft Fuel. Fuel costs represent one of our largest operating expenses, as they do for most airlines. Fuel costs have been subject to wide price fluctuations in recent years. Fuel availability and pricing are also subject to refining capacity, periods of market surplus, and shortage and demand for heating oil, gasoline and other petroleum products, as well as meteorological, economic and political factors and events occurring throughout the world, which we can neither control nor accurately predict. We source a significant portion of our fuel from refining resources located in the southeast United States, particularly facilities adjacent to the Gulf of Mexico. Gulf Coast fuel is subject to volatility and supply disruptions, particularly in hurricane season when refinery shutdowns have occurred, or when the threat of weather-related disruptions has caused Gulf Coast fuel prices to spike above other regional sources. The cost and future availability of jet fuel cannot be predicted with any degree of certainty.
Labor. The airline industry is heavily unionized. The wages, benefits and work rules of unionized airline industry employees are determined by collective bargaining agreements ("CBAs"). Relations between air carriers and labor unions in the United States are governed by the United States Railway Labor Act ("RLA"). Under the RLA, CBAs generally contain "amendable dates" rather than expiration dates, subject to standard early opener provisions, and the RLA requires that a carrier maintain the existing terms and conditions of employment following the amendable date through a multi-stage and usually lengthy series of bargaining processes overseen by the National Mediation Board ("NMB"). This process continues until either the parties have reached agreement on a new CBA, or the parties have been released to "self-help" by the NMB. In most circumstances, the RLA prohibits strikes; however, after release by the NMB, carriers and unions are free to engage in self-help measures such as strikes and lockouts.
We have six union-represented employee groups comprising approximately 81% of our employees at December 31, 2025. Our pilots are represented by the Air Line Pilots Association, International, or ALPA, our flight attendants are represented by the Association of Flight Attendants, or AFA-CWA, our dispatchers are represented by the Professional Airline Flight Control Association, or PAFCA, our ramp service agents are represented by the International Association of Machinists and Aerospace Workers, or IAMAW, our passenger service agents are represented by the Transport Workers Union, or TWU and our aircraft maintenance technicians are represented by the Aircraft Mechanics Fraternal Association, or AMFA. Conflicts between airlines and their unions can lead to work slowdowns or stoppages.
If we are unable to reach agreement with any of our unionized work groups in current or future negotiations regarding the terms of their CBAs, we may be subject to work interruptions or stoppages, such as the strike by our pilots in June 2010. A strike or other significant labor dispute with our unionized employees is likely to adversely affect our ability to conduct business. Any agreement we do reach could increase our labor and related expenses and prevent us from implementing strategic changes to optimize our business.
As a result of the 2025 Chapter 11 Bankruptcy Proceedings, we engaged in concessionary negotiations with both ALPA and AFA-CWA. On November 6, 2025, we reached agreements in principle with each of the two unions. These agreements were ratified by union members in December 2025, approved by the Bankruptcy court on December 29, 2025, and are amendable in January 2028. Under the pilot agreement, hourly pay will be reduced by 8% effective January 1, 2026, and employer 401(k) contributions will be reduced from 16% to 8% for 2026 and 2027. The flight attendant agreement includes a reduction in incentive overtime pay and the elimination of ground holding pay in certain circumstances.
Our dispatchers are represented by the PAFCA. In May 2023, PAFCA provided notice that it intended to amend its Collective Bargaining Agreement with our dispatchers. In July 2024, we reached an agreement with PAFCA for a new two-year agreement, which was ratified by PAFCA members on August 10, 2024 and becomes amendable in August 2026. The ratified agreement includes increased pay rates.
Our ramp service agents are represented by IAMAW. Representation only applies to our Fort Lauderdale station where we have direct employees in the ramp service agent classification. In February 2020, the IAMAW notified us, as required by the RLA, that it intended to submit proposed changes to the collective bargaining agreement covering our ramp service agents which became amendable in June 2020. On September 28, 2021, we filed an "Application for Mediation Services" with the NMB. On October 16, 2021, we reached a tentative agreement with the IAMAW with the assistance of the NMB. Our ramp service agents ratified the five-year agreement in November 2021, which becomes amendable in November 2026.
Our passenger service agents are represented by the TWU, but the representation only applies to our Fort Lauderdale station where we have direct employees in the passenger service classification. We began meeting with the TWU in late October 2018 to negotiate an initial collective bargaining agreement. During February 2022, we reached a tentative agreement with the TWU. Our passenger service agents ratified the five-year agreement on February 21, 2022, which becomes amendable in February 2027.
In August 2022, our aircraft maintenance technicians ("AMTs") voted to be represented by AMFA as their collective bargaining agent. In November 2022, AMFA notified us of its intent to negotiate a CBA and began negotiations. In October
2023, AMFA filed for mediation with the NMB. In May 2024, the parties began negotiations with a NMB mediation, and those discussions are ongoing. As of December 31, 2025, we had approximately 455 AMTs.
We believe our CBAs provide us with competitive labor costs compared to other U.S.-based low-cost carriers. If we are unable to reach agreement with any of our unionized work groups in current or future negotiations regarding the terms of their CBAs, we may be subject to work interruptions or stoppages, such as the strike by our pilots in June 2010. A strike or other significant labor dispute with our unionized employees is likely to adversely affect our ability to conduct business. Any agreement we do reach could increase our labor and related expenses.
In 2010, the Patient Protection and Affordable Care Act was passed into law. This law may be repealed in its entirety or certain aspects may be changed or replaced. If the law is repealed or modified or if new legislation is passed, such action could potentially increase our operating costs, with healthcare costs increasing at a higher rate than our employee headcount.
Maintenance Expense. The amount of total maintenance costs and related amortization of heavy maintenance (included in depreciation and amortization expense) is subject to many variables such as future utilization rates, average stage length, the interval between heavy maintenance events, the size and makeup of the fleet in future periods and the level of unscheduled maintenance events and their actual costs. Accordingly, we cannot reliably quantify future maintenance expenses for any significant period of time.
When accounting for maintenance expense under the deferral method, heavy maintenance is amortized over the shorter of either the remaining lease term or the next estimated heavy maintenance event. As a result, deferred maintenance events occurring closer to the end of the lease term will generally have shorter amortization periods than those occurring earlier in the lease term. This will create higher depreciation and amortization expense specific to any aircraft related to heavy maintenance during the final years of the lease as compared to earlier periods.
Tariffs.The current U.S. Administration is in the process of expanding the scope of tariffs and significantly increasing the rates on goods imported into the United States. In response, foreign governments have imposed, and are expected to impose, retaliatory tariff measures against the United States. Any tariffs are expected to increase expenses and may have an impact on demand.
These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our
operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among others. We continue to monitor the situation.
Critical Accounting Policies and Estimates
The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of our consolidated financial statements. For a detailed discussion of our significant accounting policies, refer to "Notes to Consolidated Financial Statements-1. Summary of Significant Accounting Policies."
Critical accounting policies are defined as those policies that reflect significant judgments or estimates about matters both inherently uncertain and material to our financial condition or results of operations.
Fresh Start Accounting- Valuation of Aircraft and Engines.As described in "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy", we emerged from the 2024 Bankruptcy on March 12, 2025. At the Emergence Date, we qualified for and applied fresh start accounting in accordance with ASC 852, Reorganizations, which required us to remeasure our assets and liabilities at fair value in accordance with ASC 805, Business Combinations and ASC 820, Fair Value Measurements. With the application of fresh start accounting to the Successor Period, we allocated our reorganization value to our individual assets and liabilities based on their estimated fair value.
All estimates, assumptions, valuations and financial projections related to fresh start accounting, including the fair value adjustments and the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, no assurances can be provided that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially. For information about the use of estimates relating to fresh start accounting, refer to "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy."
The valuation of our aircraft and engines required the use of significant judgment and assumptions. The aircraft and engines were valued as of the Emergence Date, using a market approach. Multiple third-party valuation resources (including appraisals of specific aircraft/engines) were consulted and relied upon for estimates of recent half-life and maintenance adjusted ranges for all of the aircraft and engines. Our application of fresh start accounting was complex due to the estimation uncertainty in determining the fair value of aircraft and engines. The estimation uncertainty was primarily due to selecting an appropriate valuation methodology and evaluating the range of market data available for identical or similar assets, including maintenance adjusted values for aircraft and engines.
Results of Operations
During the Successor Period, we generated operating revenues of $3,041.4 million and recorded an operating loss of $481.5 million, resulting in a negative operating margin of 15.8%. We also reported a net loss of $2,832.7 million for the period. During the Current Predecessor Period, we generated operating revenues of $755.4 million and recorded an operating loss of $287.2 million, resulting in a negative operating margin of 38.0%. Net income for the Current Predecessor Period totaled $72.2 million. In 2024, we generated operating revenues of $4,913.4 million and had an operating loss of $1,105.4 million, resulting in a negative operating margin of 22.5% and a net loss of $1,229.5 million. The decrease in operating revenues, year over year, is primarily due to a decrease in capacity of 24.7% and a 4.0 pts decrease in load factor, partially offset by an increase in average yield of 7.7%, year over year. Operating expenses decreased compared to the prior year period, primarily due to lower aircraft fuel expense driven by a 25.8% reduction in fuel gallons consumed and a 9.0% decrease in fuel price per gallon, a net gain on the disposal of assets in the current period compared to a net loss on the disposal of assets in the prior year period, and a decrease in expense related to a decrease in flight volume, including salaries, wages and benefits and other operating expenses.
In 2025, during the combined Successor Period and Current Predecessor period, ASMs decreased by 24.7% compared to the prior year period. The reduction in capacity was primarily driven by a lower number of aircraft available for service due to GTF engine issues, previously grounded aircraft held for sale, and other strategic initiatives, including reductions in flying on off-peak travel days to better align capacity with market demand.
As of December 31, 2025, our cash and cash equivalents was $273.0 million, a decrease of $629.1 million compared to the prior year. Cash and cash equivalents is generally driven by cash from our operating activities as well as capital from debt and equity financings, offset by cash used to fund our required holdback with our primary credit card processor and capital expenditures and principal payments related to our long-term debt.
Comparative Operating Statistics
The following tables set forth our operating statistics for the twelve month periods ended December 31, 2025 and 2024:
| Twelve Months Ended December 31, | Percent Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
|
Operating Statistics (unaudited) (A):
|
|||||||||||||||||
| Average aircraft | 199.7 | 209.9 | (4.9) | % | |||||||||||||
|
Aircraft at end of period (B)
|
131 | 213 | (38.5) | % | |||||||||||||
| Average daily aircraft utilization (hours) | 7.7 | 9.9 | (22.2) | % | |||||||||||||
| Departures | 217,213 | 288,180 | (24.6) | % | |||||||||||||
| Passenger flight segments (PFSs) (thousands) | 32,031 | 44,180 | (27.5) | % | |||||||||||||
| Revenue passenger miles (RPMs) (thousands) | 31,320,174 | 43,671,009 | (28.3) | % | |||||||||||||
| Available seat miles (ASMs) (thousands) | 39,939,953 | 53,017,948 | (24.7) | % | |||||||||||||
| Load factor (%) | 78.4 | % | 82.4 | % | (4.0) pts | ||||||||||||
| Total revenue per passenger flight segment ($) | 118.53 | 111.21 | 6.6 | % | |||||||||||||
| Average yield (cents) | 12.12 | 11.25 | 7.7 | % | |||||||||||||
| TRASM (cents) | 9.51 | 9.27 | 2.6 | % | |||||||||||||
| CASM (cents) | 11.43 | 11.35 | 0.7 | % | |||||||||||||
| Adjusted CASM (cents) | 11.74 | 10.76 | 9.1 | % | |||||||||||||
| Adjusted CASM ex-fuel (cents) | 9.24 | 7.97 | 15.9 | % | |||||||||||||
| Fuel gallons consumed (thousands) | 409,418 | 551,819 | (25.8) | % | |||||||||||||
| Average fuel cost per gallon ($) | 2.44 | 2.68 | (9.0) | % | |||||||||||||
(A)See "Glossary of Airline Terms" elsewhere in this annual report for definitions used in this table.
(B)Excludes 83 rejected aircraft recorded as liabilities subject to compromise on our consolidated balance sheets as of December 31, 2025. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
Operating Revenues
| Year Ended 2025 | % change 2025 versus 2024 | Year Ended 2024 | |||||||||||||||
| Operating revenues: | |||||||||||||||||
| Passenger (thousands) | 3,719,891 | (22.7)% | 4,811,752 | ||||||||||||||
| Other (thousands) | 76,856 | (24.4)% | 101,669 | ||||||||||||||
| Total operating revenue (thousands) | $ | 3,796,747 | (22.7)% | $ | 4,913,421 | ||||||||||||
| Total operating revenue per ASM (TRASM) (cents) | 9.51 | 2.6% | 9.27 | ||||||||||||||
| Total revenue per passenger flight segment | $ | 118.53 | 6.6% | $ | 111.21 | ||||||||||||
Operating revenues decreased by $1,116.7 million, or 22.7%, to $3,796.7 million in 2025 compared to 2024, primarily due to a decrease in capacity of 24.7% and a 4.0 pts decrease in load factor, partially offset by an increase in average yield of 7.7%, year over year.
TRASM for 2025 was 9.51 cents, an increase of 2.6% compared to 2024. This increase was a result of a 7.7% increase in average yield, year over year.
Total revenue per passenger flight segment increased 6.6% from $111.21 in 2024 to $118.53 in 2025.
Operating Expenses
The table below presents our unit operating costs (CASM) and year-over-year changes.
| Year Ended 2025 | Change 2025 versus 2024 | Year Ended 2024 | |||||||||||||||||||||
| CASM | Per-ASM Change | Percent change | CASM | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Salaries, wages and benefits | $3.61 | $0.42 | 13.2% | $3.19 | |||||||||||||||||||
| Aircraft fuel | 2.50 | (0.29) | (10.4) | 2.79 | |||||||||||||||||||
| Aircraft rent | 1.37 | 0.35 | 34.3 | 1.02 | |||||||||||||||||||
| Landing fees and other rentals | 0.98 | 0.13 | 15.3 | 0.85 | |||||||||||||||||||
| Depreciation and amortization | 0.61 | - | - | 0.61 | |||||||||||||||||||
| Maintenance, materials and repairs | 0.52 | 0.11 | 26.8 | 0.41 | |||||||||||||||||||
| Distribution | 0.43 | 0.06 | 16.2 | 0.37 | |||||||||||||||||||
| Special charges (credits) | (0.08) | (0.15) | NM | 0.07 | |||||||||||||||||||
| Loss (gain) on disposal of assets | (0.24) | (0.76) | NM | 0.52 | |||||||||||||||||||
| Other operating expenses | 1.72 | 0.20 | 13.2 | 1.52 | |||||||||||||||||||
| Total operating expense | |||||||||||||||||||||||
| CASM | 11.43 | 0.08 | 0.7 | 11.35 | |||||||||||||||||||
| Adjusted CASM (1) | 11.74 | 0.98 | 9.1 | 10.76 | |||||||||||||||||||
| Adjusted CASM ex fuel (2) | 9.24 | 1.27 | 15.9 | 7.97 | |||||||||||||||||||
(1)Reconciliation of CASM to Adjusted CASM:
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| (in millions) | Per ASM | (in millions) | Per ASM | ||||||||||||||||||||
| CASM (cents) | 11.43 | 11.35 | |||||||||||||||||||||
| Less: | |||||||||||||||||||||||
| Special charges (credits) | $ | (30.0) | (0.08) | $ | 36.0 | 0.07 | |||||||||||||||||
| Loss (gain) on disposal of assets | (97.4) | (0.24) | 273.9 | 0.52 | |||||||||||||||||||
| Litigation loss contingency | - | - | (1.7) | - | |||||||||||||||||||
| Furlough, termination and retention-related expenses | 2.9 | 0.01 | 4.9 | 0.01 | |||||||||||||||||||
| Adjusted CASM (cents) | 11.74 | 10.76 | |||||||||||||||||||||
(2)Excludes aircraft fuel expense, special charges (credits), loss (gain) on disposal of assets, furlough, termination and retention-related expenses recorded in the third quarter of 2024 and in the first quarter of 2025 and litigation loss contingency adjustments recorded in the first and third quarters of 2024.
Operating expenses decreased by $1,453.3 million, or 24.1%, in 2025 as compared to the prior year period primarily driven by lower aircraft fuel expense. Fuel gallons consumed decreased by 25.8% and the fuel price per gallon decreased by 9.0%, resulting in a $480.3 million decrease in aircraft fuel expense. In addition, the year-over-year decrease in operating expenses is due to a net gain on the disposal of assets in the current period compared to a net loss in the prior year period, as well as due to a decrease in salaries, wages and benefits expense, other operating expense and depreciation and amortization expenses, year over year.
Our Adjusted CASM ex-fuel for the twelve months ended December 31, 2025 was 9.24 cents, as compared to 7.97 cents for the twelve months ended December 31, 2024. The increase on a per-ASM basis was primarily due to increase in salaries, wages and benefits expense, aircraft rent expense, other operating expense and landing fees and other rents expense. These per-
ASM increases were mostly driven by the semi-fixed nature of many of these costs in conjunction with a 24.7% year-over-year decrease in capacity. The reduction in capacity during 2025 was primarily driven by fewer aircraft available for scheduling due to GTF engine issues, as well as the strategic realignment of our network and the restructuring of our fleet during the 2025 Chapter 11 Proceedings.
Aircraft fuel expenses includes into-plane expense, defined as the price that we generally pay at the airport, including taxes and fees. Into-plane fuel prices are affected by the global oil market, refining costs, transportation taxes and fees, which can vary by region in the United States and other countries where we operate. Into-plane fuel expense approximates cash paid to the supplier.
Aircraft fuel expense decreased by 32.5% from $1,479.2 million in 2024 to $998.9 million in 2025. This decrease was due to a 25.8% decrease in fuel gallons consumed and a 9.0% decrease in fuel price per gallon.
The elements of the changes in aircraft fuel expense are illustrated in the following table:
| Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except per-gallon amounts) | Percent Change | ||||||||||||||||
| Fuel gallons consumed | 409,418 | 551,819 | (25.8) | % | |||||||||||||
| Into-plane fuel cost per gallon | $ | 2.44 | $ | 2.68 | (9.0) | % | |||||||||||
| Aircraft fuel expense (per consolidated statements of operations) | $ | 998,949 | $ | 1,479,203 | (32.5) | % | |||||||||||
Gulf Coast Jet indexed fuel is the basis for a substantial majority of our fuel consumption and is impacted by both the price of crude oil as well as increases or decreases in refining margins associated with the conversion of crude oil to jet fuel.
Salaries, wages and benefits expense in 2025 decreased by $247.9 million, or 14.7%, compared to 2024. On a dollar basis, salaries, wages and benefits expense decreased due to lower salaries expense, 401(k) expense, hourly full-time expense and vacation expense. These decreases were largely driven by a 17.4% reduction in our pilot and flight attendant workforce, which resulted from headcount rationalization and other restructuring actions implemented during the 2025 Chapter 11 Bankruptcy Proceedings. In addition, the decrease reflects ongoing cost-management initiatives and alignment of labor resources with reduced operational activity during the period.
Aircraft rent expense in 2025 increased by $6.6 million, or 1.2%, compared to 2024. The increase on a dollar basis was primarily driven by a higher number of aircraft financed under operating leases throughout majority of the current year period, including four new operating leases entered into since 2024 related to newly delivered aircraft. In addition, the delivery of 12 aircraft during the third and fourth quarters of 2024 resulted in a full year of rent expense in 2025, compared to a partial-year impact in the prior year. Aircraft rent expense also increased due to higher supplemental rent, including the write-off of lease return costs associated with one engine purchased off lease in the prior year, and increased spare engine rent expense resulting from 14 sale leaseback transactions executed during the third quarter of 2025. These increases in aircraft rent expense were partially offset by the rejection of certain aircraft and engine lease agreements in connection with the 2025 Chapter 11 Cases, which resulted in lower rent expense during the fourth quarter of 2025. For additional information, refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings." In addition, aircraft rent expense in 2025 was partially offset by higher supplemental rent recorded in the prior year period, primarily driven by the accrual of lease return costs associated with the return of two aircraft. On a per-ASM basis, the increase in aircraft rent expense was driven by a decrease in average daily aircraft utilization.
In connection with our emergence from bankruptcy and in accordance with ASC 852, we adopted fresh start accounting, requiring the revaluation of our leases right-of-use assets and related operating lease liabilities to their fair value using an estimated incremental borrowing rate at the Fresh Start Reporting Date, as well as adjustments to the related right-of-use assets for off-market terms as of the Emergence Date, resulting in a net decrease in straight-line rent expense during the Successor Period. For additional information, refer to "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy."
Landing fees and other rents for 2025 decreased by $59.5 million, or 13.2%, compared to 2024. On a dollar basis, landing fees and other rents expense primarily decreased as a result of a decrease in landing fees expense, facility rent expense, overfly fees expense and gate charges expense, period over period, driven by a 24.6% decrease in departures period over period. On a
per-ASM basis, however, landing fees and other rents increased, primarily due to a 24.7% decrease in ASMs, which resulted in these costs being allocated over a smaller capacity base.
Depreciation and amortization decreased by $80.2 million, or 24.6%, compared to the prior year. On a dollar basis, depreciation expense decreased, period over period, primarily due to the change in the composition of owned aircraft. During the fourth quarter of 2024 we reclassified 23 aircraft to assets held for sale within our consolidated balance sheets, which were no longer being depreciated. Subsequently, in September 2025, 20 of the remaining aircraft were reclassified to property and equipment on our consolidated balance sheets, resulting in less depreciation expense during the current year period while they were in assets held for sale. In addition, in connection with our emergence from bankruptcy and in accordance with ASC 852, we adopted fresh start accounting, requiring the adjustment of our assets to their fair value at the Fresh Start Reporting Date. This resulted in changes to depreciation and amortization in the Successor Period related to the fair value adjustments recorded to our fixed assets values as of the Emergence Date. For additional information, refer to "Notes to Consolidated Financial Statements-5. Fresh Start Accounting- 2024 Bankruptcy." On a per-ASM basis, depreciation and amortization remained consistent, as compared to the prior year period.
We account for heavy maintenance under the deferral method. Under the deferral method, the cost of heavy maintenance is capitalized and amortized as a component of depreciation and amortization expense in the consolidated statements of operations until the earlier of the next heavy maintenance event or end of the lease term. The amortization of heavy maintenance costs decreased to $77.5 million for the twelve months ended December 31, 2025 from $113.5 million for the twelve months ended December 31, 2024. The amortization of heavy maintenance costs is driven by the timing and number of maintenance events. In addition, as part of fresh start accounting, we recorded a fair value adjustment that decreased the book values of our deferred heavy maintenance, which resulted in lower amortization expense in the twelve months ended December 31, 2025. Amortization was further reduced by aircraft on ground ("AOG") credits, which were recognized as a reduction to the cost basis of deferred heavy maintenance. However, as our fleet continues to age, we generally expect that the amount of deferred heavy maintenance events will increase and will result in an increase in the amortization of those costs. If the amortization of heavy maintenance events was expensed within maintenance, materials and repairs expense in the consolidated statements of operations, our maintenance, materials and repairs expense would have been $314.8 million and $342.0 million for the twelve months ended December 31, 2025 and 2024, respectively.
Maintenance, materials and repairs expense decreased by $10.6 million, or 4.9%, in 2025, as compared to 2024. The decrease in maintenance costs on a dollar basis was mainly due to timing of maintenance events in the period as well as an increase in AOG credits, which were recognized in the period as a reduction to the cost basis of maintenance, materials and repairs. On a per-ASM basis, the increase in maintenance, materials and repairs expense was primarily due to the mix of maintenance events resulting in higher cost events in the current year period as compared to the prior year period, as well as the timing of maintenance events during the period. Refer to "Notes to Consolidated Financial Statements-1. Summary of Significant Accounting Policies" for additional information regarding the AOG credits.
Distribution expense decreased by $24.2 million, or 12.3%, in 2025, compared to 2024. The decrease on a dollar basis was primarily attributable to lower credit card fees, driven by reduced sales volume, which directly impacts variable distribution costs. The decrease on a dollar basis partially offset by higher advertising expense in the current year period, related to our new travel options and transformed Guest experience. On a per-ASM basis, distribution expense increased primarily due to the higher advertising spend during the current year period.
Special charges (credits) for the year ended 2025 consisted of a credit of $30.0 million, related to a one-time assignment fee, resulting from the assignment agreement for airline use and lease agreement at ORD for two gates to the AA Assignee. Special charges (credits) for the year ended 2024 consisted of $28.1 million in legal, advisory and other fees related to the former Merger Agreement with JetBlue, as well as $8.0 million related to the retention award program in connection with the former Merger Agreement with JetBlue. For additional information, refer to "Notes to Consolidated Financial Statements- 6. Special Charges and Credits."
Loss (gain) on disposal of assets for the twelve months ended December 31, 2025 primarily consisted of a $117.7 million gain from 14 sale leaseback transactions entered into during the third quarter of 2025, related to previously owned engines, a net gain of $8.2 million related to the three aircraft sale leaseback transactions during the current year period and a $0.9 million net gain true-up recorded related to the sale of A319 airframes and engines sold in 2024. In addition, these net gains included a $3.2 million gain related to the reclassification of aircraft previously classified as held for sale, which were reclassified to held and used during the latter part of the third quarter of 2025. Refer to "Notes to Consolidated Financial Statements- 19. Fair Value Measurements, for additional information regarding this reclassification. These gains were partially offset by a $27.2 million adjustment to previously recorded impairment charges in the fourth quarter of 2024 reflecting a change in estimates of costs to sell associated with our previous aircraft sale and purchase agreement with GAT. In addition, we recognized a $2.0 million loss related to the sale of one aircraft to GAT in July 2025 and a $3.3 million net loss, related to the
write-off of obsolete assets and other adjustments. Loss (gain) on disposal of assets totaled $273.9 million for the year ended 2024. This loss on disposal of assets primarily consisted of a $282.5 million in impairment charges associated with our former plan to early retire and sell 23 A320ceo and A321ceo aircraft, an $11.9 million loss related to the sale of 17 A319 airframes and 38 A319 engines, a $2.5 million loss related to the write-off of obsolete assets and other adjustment, a $1.7 million loss related to the two aircraft sale leaseback transactions (on existing aircraft) and a $0.4 million loss recorded as a result of the sale of two aircraft to GAT. These losses were partially offset by a net gain of $25.1 million related to eight aircraft sale leaseback transactions related to new aircraft deliveries completed during the twelve months ended December 31, 2024.
Other operating expenses in 2025 decreased by $119.9 million, or 14.8%, compared to 2024. The decrease in other operating expenses on a dollar basis was primarily related to a decrease in ground handling expense and travel and lodging expense, primarily due to a 24.6% decrease in departures. In addition, the decrease in other operating expenses was due to lower passenger reaccommodation expense, as compared to the prior year period. On a per-ASM basis, operating expenses increased primarily due to higher ground handling rates compared to the prior year period, as well as increases in passenger food costs and property taxes expense. Furthermore, operating expenses increased on a per-ASM basis due to semi-fixed nature of certain costs, such as software maintenance expense, combined with a 24.7% decrease in ASMs.
Other (Income) Expense
Other (income) expense, net increased from $184.3 million in 2024 to $1,982.1 million in 2025. The increase was primarily driven by higher reorganization charges recorded during the current year, including amounts related to lease terminations and rejections, the write-off of fair value adjustments associated with liabilities subject to compromise, and legal, consulting and other professional fees incurred in connection with the 2025 Chapter 11 Bankruptcy Proceedings. These amounts were partially offset by a gain recognized under the AerCap agreement. Refer to "Notes to Consolidated Financial Statements- 3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
The year-over-year increase was also driven by cash received during the first quarter of 2024 from JetBlue under the terms of the Termination Agreement, which resulted in a gain recognized in the prior year period. In addition, the increase was driven to higher special charges, non-operating, primarily related to post-emergence restructuring expenses related to the 2024 Bankruptcy, including professional fees and other related costs, as well amounts related to the pilot furloughs. In addition, these charges include legal, advisory and other fees related to our voluntary bankruptcy filing in 2025, prior to the petition date of August 29, 2025. Refer to "Notes to Consolidated Financial Statements- 3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information on our 2025 Bankruptcy Proceedings.
The increase was further driven by a loss on extinguishment of debt being recognized during the current year related to the extinguishment of our Series B equipment notes issued under the 2017-1 pass-through certificates, compared to a gain on extinguishment recognized in the prior year period, primarily related to the early extinguishment of certain fixed-rate term loans. Additionally, other expense increased due to lower interest income, reflecting a reduction in average cash balances during 2025 and lower interest rates compared to the prior year period.
The increase in other expense was partially offset by a decrease in interest expense. As of December 31, 2025, certain of our debt instruments are recorded within liabilities subject to compromise on our consolidated balance sheets and therefore ceased accruing interest due to the 2025 Bankruptcy. If not for the 2025 Bankruptcy, the interest expense for the Successor Period would have been $3.4 million for the unsecured term loans and $82.6 million for the Exit Secured Notes. Our fixed-rate loans are comprised of bank debt and 13 aircraft recorded as failed sale leaseback transactions, of which only the 13 aircraft recorded as failed sale leaseback transactions are recorded as liabilities subject to compromise. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
Income Taxes
In 2025, our effective tax rate was 0.3% in the Successor Period and 19.8% in the Current Predecessor Period compared to 4.7% in 2024. While we expect our tax rate to be fairly consistent in the near term, it will tend to vary depending on recurring items such as the amount of income we earn in each state and the state tax rate applicable to such income. Discrete items particular to a given year may also affect our effective tax rates.
The decrease in the tax rate, as compared to the prior year period, was primarily driven by a change in valuation allowances on our deferred tax assets. While we expect our tax rate to be fairly consistent in the near term, it will tend to vary depending on items such as changes to permanent tax items, changes in valuation allowances on our deferred tax assets, the
amount of income we earn in each state and the state tax applicable to such income. Discrete items particular to a given year may also affect our effective tax rates.
On July 4, 2025, subsequent to the end of the second quarter of 2025, the President signed into law the One Big Beautiful Bill Act (the "Act"), which enacts significant changes to U.S. income tax and related laws. Among other things, the Act makes changes to certain business-related exclusions, deductions and credits. The legislation did not have a material impact on our income tax expense for 2025.
Liquidity and Capital Resources
Going Concern
On March 12, 2025, we emerged from the Chapter 11 Cases in accordance with the Plan. As part of the reorganization, we successfully restructured certain of our debt obligations, established new financing arrangements, and issued new equity securities consisting of new Common Stock and new warrants. However, we have continued to be affected by adverse market conditions, including elevated domestic capacity and continued weak demand for domestic leisure travel, resulting in a difficult pricing environment and diminished revenues. As a result, we continue to experience challenges and uncertainties in our business operations.
Since our emergence from the 2024 Chapter 11 Bankruptcy, we have taken certain measures to address these challenges, including the implementation of product enhancements, strategic reductions in certain markets and capacity, consummation of sale-leaseback transactions related to certain of our owned spare engines, and other discretionary cost reduction strategies, including the pilot furloughs announced in July and October 2025 and the flight attendant furloughs announced in September 2025. Also, on August 21, 2025, we borrowed the entire available amount of $275.0 million under the Revolving Credit Facility. Borrowings under the Revolving Credit Facility will mature on March 12, 2028.
Effective August 15, 2025 and August 20, 2025, we entered into two amendments (the "Amendments") with our primary credit card processor. On August 15, 2025, we agreed to make an additional transfer of $50.0 million in cash to a pledged account in favor of the credit card processor. This amount is recorded in restricted cash within our consolidated balance sheets. On August 20, 2025, we agreed to allow the processor (i) to hold back up to $3.0 million per day until the processor's exposure is fully collateralized and (ii) to remain fully collateralized as the processor's exposure increases or decreases. In exchange, the processor agreed (i) to extend the term of the Card Processing Agreement from the then current December 31, 2025 expiration date to December 31, 2027, with two automatic one-year extensions unless either party provides a notice of non-renewal not less than 90 days prior to the end of the then-effective term, and (ii) to remove the existing minimum liquidity trigger for holdbacks under the Card Processing Agreement.
On August 29, 2025, we and our Debtor affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. Since the Petition Date, we have been operating our businesses as a debtor-in-possession under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. We received approval from the Bankruptcy Court for a variety of "first day" motions to continue our ordinary course operations during the Chapter 11 Cases, and approval of various post-petition liquidity initiatives described in further detail below. However, for the duration of the Chapter 11 Cases, our operations and ability to develop and execute our business plan, our financial condition, liquidity and our continuation as a going concern are subject to a high degree of risk and uncertainty associated with the Chapter 11 Cases. Our ability to continue as a going concern is dependent upon, among other things, our ability to become profitable and maintain profitability, our ability to access sufficient liquidity and our ability to successfully implement a plan of reorganization. As discussed further below, we have entered into a DIP Facility for purposes of accessing ongoing liquidity during the Chapter 11 Cases. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information. The outcome of the Chapter 11 Cases is dependent upon factors that are outside of our control, including actions of the Bankruptcy Court. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.
We have evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year from the filing of this Annual Report on Form 10-K. Based on such evaluation, management believes there is substantial doubt about our ability to continue as a going concern. During the Chapter 11 Cases, our ability to continue as a going concern is contingent upon our ability to obtain approval and successfully implement the Proposed Plan, among other factors.
For a discussion of our ongoing bankruptcy proceedings and our debtor-in-possession financing arrangements, see "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
2024 Bankruptcy
As a result of the 2024 Bankruptcy, we canceled $1.6 billion of our liabilities subject to compromise and terminated the applicable agreements governing such obligations. On the Emergence Date, we fully repaid and terminated the $300.0 million DIP Facility and paid the then-outstanding Revolving Credit Facility of $300.0 million in full. Concurrently, we entered into the Exit RCF in the aggregated amount of $275.0 million and issued $840.0 million of Exit Secured Notes. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
Additionally, in connection with our $350.0 million Equity Rights Offering, we issued 16,067,305 shares of Common Stock and 24,255,256 Warrants, as further described in the "Notes to Consolidated Financial Statements-12. Equity".
2025 Bankruptcy
Liabilities Subject to Compromise
As of December 31, 2025, we had $1.8 billion recorded within liabilities subject to compromise on our consolidated balance sheets related to our debt obligations. Refer to "Notes to Consolidated Financial Statements -3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
AerCap Transactions
On October 10, 2025, the Bankruptcy Court approved a global restructuring term sheet between us and AerCap, a key aircraft lessor. The agreement provides for a comprehensive restructuring of aircraft lease and purchase arrangements, subject to definitive documentation and certain conditions, including execution of amendments with Airbus. Key terms include:
•certain arrangements in respect of specific aircraft and engines, including the assumption of 10 existing lease agreements, the rejection of 27 existing lease agreements and the rejection of the existing agreement to lease 36 aircraft to be delivered in future years;
•the agreement to enter into 30 new aircraft lease agreements with deliveries in future periods;
•the settlement of certain claims against and by AerCap with respect to undelivered leases, rejected leases and assumed leases;
•the amendment of our purchase agreement with Airbus to remove 52 aircraft and purchase options for up to 10 aircraft. As a result, we received $11.4 million in refunds of previously paid pre-delivery payments ("PDPs") from Airbus. In addition, we wrote off $10.3 million of certain amounts previously paid in connection with these aircraft, as well as $54.8 million of previously deferred Airbus credits. These amounts were recorded within reorganization expense (gain) in our consolidated statements of operations; and
•a $150.0 million liquidity payment by AerCap, which we received on October 27, 2025, and recorded within reorganization (gain) expense in our consolidated statements of operations. Furthermore, the related cash inflow is included within operating activities in our consolidated statements of cash flows.
2025 Debtor-in-Possession Credit Agreement and Facility
On October 31, 2025, the Bankruptcy Court approved a final order which authorized the Debtors to obtain post-petition financing with a multi-draw senior secured non-amortizing super-priority priming debtor-in-possession facility (the "DIP Facility") fronted initially by Barclays Bank PLC and anchored by the holders of the senior secured notes. Spirit Airlines is Borrower, Spirit and its affiliated Debtors are guarantors and Wilmington Trust, National Association is administrative agent. The DIP Facility's aggregate principal amount of up to $1.2 billion compromising:
•New money loans (the "New Money DIP Loans") in an aggregate principal of up to $475.0 million. On October 14, 2025, we drew $200.0 million, followed by additional draws on November 7, 2025 for $50.0 million and on December 15, 2025 for $100.0 million. The remaining availability will be available to be drawn in one separate draw. Each draw is subject to its own specific conditions.
•Roll-up of pre-petition secured notes that are validly tendered into the facility, subject to a maximum amount equal to the lesser of (i) the aggregate principal amount of such notes, together with accrued and unpaid interest through the Petition Date (and post-petition interest to the extent permitted under Section 506(b) of the Bankruptcy Code), and $750.0 million (the "Roll-Up DIP Loans").
Borrowings under the DIP Facility new money draws bear interest at a rate of secured overnight financing rate plus 8.0% paid-in-kind interest rate and 2% default rate on overdue amounts. In addition to paying interest on the new money draws, we are required to pay an original interest discount of 3% on the funded amount. The roll-up portion of the DIP Facility only accrues interest if the senior secured notes are determined over-secured under Section 506(b). This portion would bear the same rate as the new money loans. No interest is expected to be accrued for this portion as it is not deemed to be over-secured.
The borrowings under the DIP Facility will mature, and lending commitments thereunder will terminate, upon the earliest to occur of: (a) July 14, 2026 (the "Scheduled Maturity Date"), (b) the substantial consummation (as defined in Section 1101 of the Bankruptcy Code and which for purposes hereof shall be no later than the "effective date" hereof) of a plan of reorganization filed in the Chapter 11 Cases that is confirmed pursuant to an order entered by the Bankruptcy Court, (c) the acceleration of the obligations and the termination of the unfunded term loan commitments (if any) hereunder in accordance with the terms hereof, (d) the consummation of a sale of all or substantially all of the assets of the Debtors pursuant to Section 363 of the Bankruptcy Code and (e) dismissal of the Chapter 11 Cases or conversion of any of the Chapter 11 Cases to one or more cases under chapter 7 of the Bankruptcy Code or appointment of a trustee in any of the Chapter 11 Cases; provided that if any such day is not a Business Day, the Maturity Date shall be the Business Day immediately succeeding such day.
We may voluntarily repay, without premium or penalty, outstanding amounts under the DIP Facility, in whole, or in part, prior to the Scheduled Maturity Date. Mandatory prepayments are only required if asset sales, casualty events or extraordinary receipts occur.
The initial draw of $200.0 million was for general liquidity uses and the later draws were contingent and largely earmarked for aircraft-debt mechanics and transaction execution. The second draw also required post-draw minimum liquidity of $160.0 million.
In connection with the Chapter 11 Cases, on October 31, 2025, the Bankruptcy Court entered a final order (as amended, supplemented or otherwise modified from time to time, the "Final DIP Order") approving Spirit Airlines, LLC, as borrower (the "DIP Borrower"), and certain subsidiaries of the Company from time to time party thereto as guarantors, entering into that certain Superpriority Priming Debtor-in-Possession Credit Agreement (the "DIP Credit Agreement"), dated October 14, 2025, with the lenders from time to time party thereto (the "DIP Lenders") and Wilmington Trust, National Association, as administrative agent and collateral agent (the "Agent").
Amendment to 2025 DIP Credit Agreement
On December 15, 2025, Spirit, the Required DIP Lenders (as defined in the DIP Credit Agreement) and the Agent entered into Amendment No. 1 to the DIP Credit Agreement (the "DIP Credit Agreement Amendment"). The DIP Credit Agreement Amendment amended the DIP Credit Agreement to, among other things, (i) remove certain conditions to borrowing the $100.0 million of new money term loans which were available to be drawn on December 13, 2025 (the "Third Draw New Money Term Loans"); (ii) require that the DIP Borrower and the guarantors maintain $50.0 million of the proceeds from the Third Draw New Money Term Loans in certain encumbered accounts at all times prior to the date on which the DIP Borrower (x) delivers to the DIP Lenders at least one indication of interest with respect to a strategic transaction that is acceptable to the Required DIP Lenders in their sole discretion, (y) agrees upon the principal terms of an Acceptable Plan of Reorganization (as defined in the DIP Credit Agreement) or (z) delivers to the DIP Lenders at least one indication of interest with respect to exit financing that is acceptable to the Required DIP Lenders in their sole discretion; and (iii) require the DIP Borrower to deliver to the restricted DIP Lenders and their counsel daily reports showing cash and cash equivalents of the Debtors; (iv) require the DIP Borrower to deliver to the restricted DIP Lenders and their counsel weekly accounts receivable aging reports; and (y) reflects and incorporates modifications to be made to the Final DIP Order, including as described below. On December 15, 2025, the DIP Borrower delivered to the Agent a notice to borrow the full $100.0 million principal amount of the Third Draw New Money Term Loans. The incremental $100.0 million draw comprised of $50.0 million, net of original issuance discount, that was made available for immediate use and access to $50.0 million which was to remain encumbered until satisfaction of conditions tied to further progress on either a standalone plan of reorganization or strategic transaction.
On December 29, 2025, the Bankruptcy Court entered an order amending the Final DIP Order to, among other things, (i) clarify the categories of claims that constitute "Administrative Claim Carve Out Claims" (as defined in the Final DIP Order);
(ii) provide for a cap for certain Administrative Claim Carve Out Claims of $80.0 million; and (iii) incorporate funding mechanics with respect to certain Administrative Claim Carve Out Claims upon receipt of a Carve Out Trigger Notice (as defined in the Final DIP Order).
The DIP Credit Agreement was further amended by the Debtors' entry into the Restructuring Support Agreement with the Consenting DIP Lenders. Refer to "Notes to Consolidated Financial Statements -3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information.
Sale of Aircraft
On February 11, 2026, the Debtors filed a motion with Bankruptcy Court seeking approval of bidding procedures in connection with the proposed sale of 20 Airbus A320 and A321 aircraft. The Debtors selected CSDS Asset Management LLC as the stalking horse bidder. The stalking horse bid provides for aggregate cash consideration of $533.5 million, including a $53.4 million deposit, and includes a $16.0 million break-up fee and a $2.5 million expense reimbursement, which together establish the minimum bid for the auction process. The stalking horse bid is subject to higher or otherwise better offers from competing bidders.
A hearing on the bidding procedures motion was held on March 11, 2026. The Court approved the bidding procedures motion at that hearing. The bidding procedures contemplate an April 1, 2026 bid deadline, an April 20, 2026 auction, and an April 23, 2026 sale hearing.
Transaction Liquidity
Assignment of Lease Agreement
On December 15, 2025, the Bankruptcy Court entered an order authorizing and approving under Sections 105, 363, and 365 of the Bankruptcy Code the Debtors to enter into and perform under an assumption and assignment agreement for airline use and lease agreement at Chicago O'Hare International Airport ("ORD") of two gates to the AA Assignee. The Assignee remitted to Spirit a one-time $30.0 million assignment fee which was recorded in special charges (credits) within our consolidated statement of operations. Furthermore, the related cash inflow is included within operating activities in our consolidated statements of cash flows. The Debtors used the proceeds to prepay a portion of the DIP Facility.
On February 25, 2026, the Debtors entered a motion authorizing and approving under Sections 105, 363, and 365 of the Bankruptcy Code the Debtors to enter into and perform under an assumption and assignment agreement for airline use and lease agreement at Chicago O'Hare International Airport ("ORD") of two gates to United Airlines, Inc. (the "UAL Assignee"). The UAL Assignee paid a $30.2 million assignment fee. The Debtors are required to use the proceeds to prepay a portion of the DIP Facility. The agreement was approved by the Bankruptcy Court in the hearing held on February 24, 2026.
General Liquidity
Our primary sources of liquidity generally include cash on hand, cash provided by operations and capital from debt and equity financing. Primary uses of liquidity are for working capital needs, capital expenditures, aircraft and engine pre-delivery deposit payments ("PDPs") and debt and lease obligations. As of December 31, 2025, we had $273.0 million of liquidity comprised of unrestricted cash and cash equivalents. On August 21, 2025, we borrowed the entire available amount of $275.0 million under the Revolving Credit Facility due on March 12, 2028. Borrowings under the Exit Revolving Credit Facility are included within liabilities subject to compromise on our consolidated balance sheets. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations" for additional information.
On March 31, 2025, we completed a private offering of Class B(R) Pass Through Certificates, Series 2025-1B(R) (the "Class B(R) Certificates"), in the aggregate face amount of $215 million, the proceeds of which were used to acquire new equipment notes to be issued by us. In April 2025, we used the proceeds from the issuance to repay $43.0 million outstanding related to our existing "Series B" equipment notes issued under the 2017-1 pass through certificates, pay transaction fees, and for general corporate purposes.
Early in the third quarter of 2025, we completed sale leaseback transactions involving 14 previously owned spare engines, generating approximately $250 million in net proceeds. For additional information, refer to "Notes to Consolidated Financial Statements-15. Leases."
In addition, on July 2, 2024, we modified our agreement with our primary credit card processor. Based on the terms of the agreement, in July 2024, we had deposited $200.0 million into a deposit account and deposited $50.0 million into a restricted account. Subsequently, effective August 15, 2025 and August 20, 2025, we entered into the Amendments, which further modified the terms of this agreement. The first amendment required an additional $50.0 million transfer to the restricted account, resulting in a total restricted cash balance of $100.0 million, included in restricted cash within our consolidated balance sheets as of December 31, 2025. The second amendment authorized our primary credit card processor to hold back up to $3.0 million per day until its exposure is fully collateralized and to maintain full collateralization as such exposure fluctuates over time. Accordingly, increases in the collateralized holdback balance reduce the amount required in the deposit account on a dollar-for-dollar basis. As of December 31, 2025, the processor had a holdback of $158.1 million, recorded in other long-term assets on our consolidated balance sheets, and there was no amount required in the deposit account.
Furthermore, as of December 31, 2025, we had provided a deposit of $25.0 million with a credit card processor recorded within deposits and other current assets in our consolidated balance sheets. Refer to "Notes to Consolidated Financial Statements-9. Credit Card Processing Arrangements" for additional information regarding our credit card processing arrangements.
Generally, one of our largest capital expenditure needs is funding the acquisition costs of our aircraft. Aircraft may be acquired through debt financing, cash purchases, direct leases or sale leaseback transactions. During the twelve months ended December 31, 2025, we took delivery of three aircraft under sale leaseback transactions and one under direct operating lease.
During the twelve months ended December 31, 2025, we made $212.0 million in debt payments (principal, interest and fees) on our outstanding aircraft debt obligations. In addition, aircraft rent payments were $462.2 million for the twelve months ended December 31, 2025 for aircraft which were financed under operating leases. Aircraft rent payments were $56.3 million for the twelve months ended December 31, 2025 for aircraft which would have been deemed finance leases resulting in failed sale leaseback transactions.
Under our purchase agreements for aircraft and engines, we are required to pay PDPs relating to future deliveries at various times prior to each delivery date. During the twelve months ended December 31, 2025, we paid $5.6 million in PDPs and $2.1 million of capitalized interest for future deliveries of aircraft and spare engines. In addition, during the twelve months ended December 31, 2025, we received $51.1 million in PDP refunds related to sale leaseback transactions completed during the period for aircraft that were originally part of our order book, as well as the amendment of our purchase agreement with Airbus to remove 52 aircraft from our order book. As of December 31, 2025, we had $38.8 million of PDPs on flight equipment, including capitalized interest, on our consolidated balance sheets.
Future aircraft deliveries may be paid in cash, leased or otherwise financed based on market conditions, our prevailing level of liquidity and capital market availability.
Net Cash Flows Provided (Used) By Operating Activities.Cash used by operating activities was $706.6 million in the Successor Period, cash used by operating activities was $223.7 million in the Current Predecessor Period, and cash used by operating activities was $758.1 million in the twelve months ended December 31, 2024. Cash used by operating activities in the Successor Period was primarily driven by the net loss in the period, as well as an increase in deposits and other assets and a decrease in air traffic liability. The cash used in the period was partially offset by reorganization items recognized during the period and higher non-cash expense of depreciation and amortization. Cash used by operating activities in the Current Predecessor Period was primarily related to the non-cash expense of reorganization items, partially offset by the increase in air traffic liability and the net income in the period.
Operating activities in 2024 used $758.1 million in cash compared to $246.7 million used in 2023. Cash used by operating activities during 2024 was primarily related to the net loss in the period, as well as an increase in deferred heavy maintenance and an increase in deposits and other assets. These increases were partially offset by higher non-cash expenses of depreciation and amortization, loss on disposal of assets and reorganization items, as well as an increase in other liabilities.
Net Cash Flows Provided (Used) By Investing Activities.Cash provided by investing activities in the Successor Period was $384.7 million, cash provided by investing activities in the Current Predecessor Period was $19.0 million, and cash provided by investing activities was $463.6 million in the twelve months ended December 31, 2024. Cash provided by investing activities during the Successor Period was primarily related to proceeds from the sale of property and equipment and proceeds from the maturity and sale of available-for-sale investment securities, partially offset by cash used to purchase property and equipment and available-for-sale investment securities. Cash provided by investing activities during the Current
Predecessor Period was primarily related to refunds of PDPs partially offset by the cash used to purchase property and equipment.
During 2024, investing activities provided $463.6 million, compared to $36.5 million used in 2023. The cash provided was primarily related to refunds of PDPs related to the aircraft deferrals (per the 2024 Amendment), the Direct Lease Transaction and PDP Transaction entered into during 2024, as well as cash proceeds from the sale of property and equipment, partially offset by the cash used to purchase property and equipment.
Net Cash Flows Provided (Used) By Financing Activities.Cash provided by financing activities was $621.0 million in the Successor Period, cash used by financing activities was $300.6 million in the Current Predecessor period, and cash provided by financing activities was $380.3 million in the twelve months ended December 31, 2024. During the Successor Period, the amount of cash provided was mainly driven by the proceeds of the issuance of long-term debt, partially offset by cash payments on debt obligations and payments to extinguish debt early. During the Current Predecessor Period, the amount of cash used was mainly driven by cash payments on debt obligations, partially offset by the proceeds of the issuance of Common Stock and warrants.
During 2024, financing activities provided $380.3 million. Cash provided was mainly driven by proceeds of the issuance of long-term debt and proceeds from the DIP financing. The cash provided was offset by cash payments on debt obligations and payments to extinguish debt early.
Commitments, Contingencies and Other Contractual Arrangements
2025 Chapter 11 Cases
As further discussed in "Notes to Consolidated Financial Statements-1. Summary of Significant Accounting Policies", on the Petition Date, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. Under the Bankruptcy Code, third-party actions to collect pre-petition indebtedness owed by the Debtors, as well as most litigation pending against the Debtors as of the Petition Date, are generally subject to an automatic stay. However, under the Bankruptcy Code, certain legal proceedings, such as those involving the assertion of a governmental entity's police or regulatory powers, may not be subject to the automatic stay and may continue unless ordered by the Bankruptcy Court. As a result, some proceedings may continue (or certain parties may attempt to argue that such proceedings should continue) notwithstanding the automatic stay.
Aircraft-Related Commitments and Financing Arrangements
Our contractual purchase commitments consist primarily of aircraft and engine acquisitions through manufacturers and aircraft leasing companies.
As of December 31, 2025, our purchase commitments for engine orders, including estimated amounts for contractual price escalations and pre-delivery payments, were expected to be $3.4 million for 2026, $60.5 million in 2027, $52.5 million in 2028 and none in 2029 and beyond. These commitments primarily relate to the 10 PW1100G-JM spare engines with deliveries through 2028 from our Engine Purchase Support Agreements.
We previously had agreements in place for 36 A320neos and A321neos to be financed through direct leases with a third-party lessor with deliveries scheduled in 2027 and 2028. However, on October 10, 2025, pursuant to the global restructuring term sheet with AerCap, these 36 direct leases were canceled, and we agreed to enter into 30 new post-petition leases, for which definitive agreements had not yet been executed as of December 31, 2025. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings" for additional information. As a result, as of December 31, 2025, we had not executed any new lease agreements and therefore, had no aircraft rent commitments for future aircraft deliveries.
During the third quarter of 2021, we entered into an Engine Purchase Support Agreement that requires us to purchase a certain number of spare engines in order to maintain a contractual ratio of spare engines to aircraft in the fleet. As of December 31, 2025, we were committed to purchase 10 PW1100G-JM spare engines, with deliveries through 2028.
During the third quarter of 2019, the United States announced its decision to levy tariffs on certain imports from the European Union, including commercial aircraft and related parts. These tariffs include aircraft and other parts that we are already contractually obligated to purchase, including those reflected above. In June 2021, the United States Trade
Representative announced that the United States and European Union had agreed to suspend reciprocal tariffs on large civilian aircraft for up to five years, pending discussions to resolve their trade dispute.
Separate from that dispute, the United States imposed reciprocal tariffs on imports from many trading partners, including the European Union, in April 2025, which would have withdrawn the June 2021 suspension and reimposed higher tariffs similar to other imports on aircraft and parts from the European Union.
On August 21, 2025, the United States and the European Union agreed on the terms of a new tariff agreement, under which the United States committed, effective September 1, 2025, to apply the higher of either the United States Most Favored Nation ("MFN") tariff rate or a tariff rate of 15%, comprised of the MFN tariff and a reciprocal tariff, on originating goods of the European Union. Under the MFN treatment, most aircraft and aircraft parts continued to be subject to a 0% tariff.
On February 20, 2026, the United States Supreme Court struck down broader tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). On the same day, the President terminated additional ad valorem duties previously imposed under Executive Order 14257, as amended, and imposed a temporary 10% import surcharge under section 122 of the Trade Act of 1974, effective February 24, 2026 through July 24, 2026. Certain qualifying civil aircraft and aircraft parts are exempt from that surcharge.
The current U.S. Administration continues to negotiate tariffs with various countries which may lead to expanding the scope of tariffs and significantly increasing the rates on goods imported into the United States. In response, foreign governments have imposed, and are expected to impose, retaliatory tariff measures against the United States. These or additional changes in U.S. or international trade policies, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions for the transportation industry, which may adversely impact our operations through increased supply chain challenges, commodity price volatility and a decline in discretionary spending and consumer confidence, among others. We continue to monitor the situation.
Interest commitments related to the secured debt financing of 48 aircraft as of December 31, 2025 were $45.9 million for 2026, $36.9 million in 2027, $18.7 million in 2028, $9.6 million in 2029, $3.4 million in 2030 and $0.4 million in 2031 and beyond. These amounts exclude any interest commitments related to debt instruments classified as liabilities subject to compromise on our consolidated balance sheets as of the Petition Date. Refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings", for additional information on the debt instruments classified as liabilities subject to compromise. For principal commitments related to our debt financing, refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations".
We have significant obligations for aircraft and spare engines, as we had 83 leased aircraft, of which 70 aircraft were financed under operating leases and 13 aircraft would have been deemed finance leases resulting in failed sale leaseback transactions, and 16 spare engines financed under operating leases.
Our fixed-rate operating leases with terms greater than 12 months are included within operating lease right-of-use assets with the corresponding liabilities included within current maturities of operating leases and operating leases, less current maturities on our consolidated balance sheets. Leases with a term of 12 months or less and variable-rate leases are not recorded on our consolidated balance sheets. Please see "Notes to Consolidated Financial Statements-15. Leases" for further discussion on our leases.
Contractual Arrangements
On July 25, 2023, RTX Corporation, the parent company of Pratt & Whitney, announced that it had determined that a rare condition in the powdered metal used to manufacture certain engine parts will require accelerated inspection of the PW 1100G-JM geared turbo fan ("GTF") fleet, which powers our A320neo family of aircraft. As a result, we have removed GTF engines from service and grounded some of our A320neo aircraft for inspection requirements.
On June 4, 2025, we entered into the Agreement with IAE, an affiliate of Pratt & Whitney, pursuant to which IAE provided us with a monthly credit, subject to certain conditions, as compensation for each of our aircraft unavailable for operational service due to GTF engine issues from January 1, 2025 through December 31, 2025. The credits are accounted for as vendor consideration in accordance with ASC 705-20 and are recognized as a reduction of the purchase price of the goods or services acquired from IAE during the period, which may include the purchase of maintenance, spare engines and short-term rentals of spare engines, based on an allocation that corresponds to our progress towards earning the credits.
During the twelve months ended December 31, 2025, we recorded $109.7 million of credits as a reduction in the cost basis of assets purchased from IAE within flight equipment and deferred heavy maintenance, net on our consolidated balance sheets and $25.6 million in credits on our consolidated statements of operations within maintenance, materials and repairs and
aircraft rent expenses. In addition, during the twelve months ended December 31, 2025, we recognized lower depreciation and amortization expense of $30.4 million ($24.3 million in the Successor Period and $6.1 million in the Current Predecessor Period), related to credits recognized as a reduction of the cost basis of assets purchased from IAE recorded within our consolidated statements of operations.
As of December 31, 2025, Pratt & Whitney issued $135.3 million in credits to us related to the aircraft on ground ("AOG") days through December 31, 2025. Of the total credits recognized as of December 31, 2025, $103.7 million and $6.0 million were recorded in the Successor Period and the Current Predecessor Period, respectively, as a reduction in the cost basis of assets purchased from IAE within flight equipment and deferred heavy maintenance, net on our consolidated balance sheets. In addition, during the Successor Period and the Current Predecessor Period, we recorded $21.0 million and $4.6 million, respectively, in credits on our consolidated statements of operations within maintenance, materials and repairs and aircraft rent expenses. In addition, during the Successor Period and the Current Predecessor Period, we recognized lower depreciation and amortization expense of $24.3 million and $6.1 million, respectively, related to credits recognized under the 2024 and 2025 Agreements with IAE, as a reduction of the cost basis of assets purchased from IAE recorded within our consolidated statements of operations. For additional information refer to "Notes to Consolidated Financial Statements-18. Commitments, Contingencies and Other Contractual Arrangements."
In connection with our ongoing 2025 Chapter 11 Bankruptcy Proceedings, the lease agreements related to certain aircraft subject to these inspections were rejected as part of the bankruptcy process and we did not receive any additional credits under this agreement related to these aircraft. In addition, in connection with the Chapter 11 Cases, we entered into a restructuring term sheet with IAE, dated December 3, 2025, and subsequently entered into a definitive agreement on February 4, 2026. For additional information refer to "Notes to Consolidated Financial Statements-3. 2025 Chapter 11 Bankruptcy Proceedings."
Other Commitments
We are contractually obligated to pay the following minimum guaranteed payments for our reservation system and other miscellaneous subscriptions and services as of December 31, 2025: $42.2 million for 2026, $33.3 million in 2027, $9.2 million in 2028, $4.1 million in 2029, $3.9 million in 2030 and $2.2 million in 2031 and thereafter. Our reservation system contract expires in 2028.
We have contractual obligations and commitments primarily with regard to future purchases of engines, payment of debt and lease arrangements. The following table discloses aggregate information about our contractual obligations as of December 31, 2025 and the periods in which payments are due (in millions):
| Total | 2026 | 2027 - 2028 | 2029 - 2030 | 2031 and beyond | ||||||||||||||||||||||||||||
|
Long-term debt (1)
|
$ | 1,259 | $ | 502 | $ | 517 | $ | 235 | $ | 5 | ||||||||||||||||||||||
|
Interest and fee commitments(2)
|
115 | 46 | 56 | 13 | - | |||||||||||||||||||||||||||
|
Finance and operating lease obligations (5)
|
3,514 | 272 | 489 | 444 | 2,309 | |||||||||||||||||||||||||||
|
Flight equipment purchase obligations (3)
|
116 | 3 | 113 | - | - | |||||||||||||||||||||||||||
|
Other (4)
|
95 | 42 | 43 | 8 | 2 | |||||||||||||||||||||||||||
| Total future payments on contractual obligations | $ | 5,099 | $ | 865 | $ | 1,218 | $ | 700 | $ | 2,316 | ||||||||||||||||||||||
(1)Includes principal only associated with our outstanding long-term debt instruments. Excludes the principal related to our debt obligations that have been classified as liabilities subject to compromise on our consolidated balance sheets as of the Petition Date. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations." and "Notes to Consolidated Financial Statements -3. 2025 Chapter 11 Bankruptcy Proceedings", for additional information.
(2)Related to our outstanding long-term debt instruments. Excludes the interest related to our debt obligations classified as liabilities subject to compromise on our consolidated balance sheets as of the Petition Date. Refer to "Notes to Consolidated Financial Statements-14. Debt and Other Obligations." and "Notes to Consolidated Financial Statements -3. 2025 Chapter 11 Bankruptcy Proceedings", for additional information.
(3)Includes estimated amounts for contractual price escalations and PDPs on flight equipment as of December 31, 2025.
(4)Primarily related to our reservation system and other miscellaneous subscriptions and services. Refer to "Notes to Consolidated Financial Statements-18. Commitments, Contingencies and Other Contractual Arrangements", for additional information.
(5)Certain of our lease obligations are included within liabilities subject to compromise on our consolidated balance sheets and may be settled at an amount lower than the contractually future minimum lease payments; therefore, the operating lease liability balances included within this table will differ from the operating lease liability balances included within our consolidated balance sheets. Refer to "Notes to Consolidated Financial Statements -15. Leases" for additional information.
Off-Balance Sheet Arrangements
As of December 31, 2025, we had a line of credit related to corporate credit cards of $6.1 million, collateralized by $6.0 million in restricted cash, from which we had drawn $0.6 million.
As of December 31, 2025, we had $12.6 million in surety bonds, primarily collateralized by a letter of credit and $36.7 million standby letters of credit collateralized by $38.5 million of restricted cash, representing an off balance-sheet commitment, of which $35.6 million were issued letters of credit.
GLOSSARY OF AIRLINE TERMS
Set forth below is a glossary of industry terms:
"Adjusted CASM" means operating expenses, excluding special charges (credits), loss (gain) on disposal of assets, furlough, termination and retention-related expenses recorded in the third quarter of 2024 and in the first quarter of 2025, litigation loss contingency adjustments recorded in the first and third quarters of 2024, divided by ASMs.
"Adjusted CASM ex-fuel" means operating expenses excluding aircraft fuel expense, special charges (credits), loss (gain) on disposal of assets, furlough, termination and retention-related expenses recorded in the third quarter of 2024 and in the first quarter of 2025, litigation loss contingency adjustments recorded in the first and third quarters of 2024, divided by ASMs.
"AFA-CWA" means the Association of Flight Attendants-CWA.
"Air traffic liability" or "ATL" means the value of tickets sold in advance of travel.
"ALPA" means the Air Line Pilots Association, International.
"AMFA" means the Aircraft Mechanics Fraternal Association.
"AOG" means Aircraft on Ground.
"ASIF" means an Aviation Security Infrastructure Fee assessed by the TSA on each airline.
"Available seat miles" or "ASMs" means the number of seats available for passengers multiplied by the number of miles the seats are flown, also referred to as "capacity."
"Average aircraft" means the average number of aircraft in our fleet as calculated on a daily basis.
"Average daily aircraft utilization" means block hours divided by number of days in the period divided by average aircraft.
"Average fuel cost per gallon" means total aircraft fuel expense divided by the total number of fuel gallons consumed.
"Average yield" means average operating revenue earned per RPM, calculated as total revenue divided by RPMs, also referred to as "passenger yield."
"Block hours" means the number of hours during which the aircraft is in revenue service, measured from the time of gate departure before take-off until the time of gate arrival at the destination.
"CASM" or "unit costs" means operating expenses divided by ASMs.
"CBA" means a collective bargaining agreement.
"CBP" means United States Customs and Border Protection.
"DOT" means the United States Department of Transportation.
"EETC" means enhanced equipment trust certificate.
"EPA" means the United States Environmental Protection Agency.
"FAA" means the United States Federal Aviation Administration.
"Fare revenue per passenger flight segment" means total fare passenger revenue divided by passenger flight segments.
"FCC" means the United States Federal Communications Commission.
"FLL Airport" means the Fort Lauderdale Hollywood International Airport.
"GDS" means Global Distribution System (e.g., Amadeus, Galileo, Sabre and Worldspan).
"IAMAW" means the International Association of Machinists and Aerospace Workers.
"Into-plane fuel cost per gallon" means into-plane fuel expense divided by number of fuel gallons consumed.
"Into-plane fuel expense" represents the cost of jet fuel and certain other charges such as fuel taxes and oil.
"Load factor" means the percentage of aircraft seats actually occupied on a flight (RPMs divided by ASMs).
"NMB" means the National Mediation Board.
"OTA" means Online Travel Agent (e.g., Orbitz and Travelocity).
"PAFCA" means the Professional Airline Flight Control Association.
"Passenger flight segments" means the total number of passengers flown on all flight segments.
"PDP" means pre-delivery deposit payment.
"Revenue passenger mile" or "RPM" means one revenue passenger transported one mile. RPMs equal revenue passengers multiplied by miles flown, also referred to as "traffic."
"RLA" means the United States Railway Labor Act.
"Total operating revenue per-ASM," "TRASM" or "unit revenue" means operating revenue divided by ASMs.
"TWU" means the Transport Workers Union of America.
"TSA" means the United States Transportation Security Administration.
Spirit Airlines Inc. published this content on March 16, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 16, 2026 at 21:23 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]