BURBANK, CALIFORNIA — Spirit Airlines filed for bankruptcy for the second time in recent years after experiencing serious financial turbulence and risking potential liquidation in early 2026. By April 2026, budget airlines, including Spirit, were experiencing financial challenges.

High fuel prices following the conflict in Iran increased operating costs for Spirit. The company pioneered a no-frills business model built on ultra-low base fares that unbundle services, charging extra fees for carry-on bags, checked luggage, food and drinks, seat selection, and printed boarding passes. The pricing approach has been referred to as unbundling, price partitioning, drip pricing, or nickel-and-diming.

Consumer surveys have indicated that Spirit is among the most disliked airlines in the industry. Ben Baldanza, the then-CEO of Spirit, once defended the model in comparison to a discount retailer. "We're Dollar General and we like being Dollar General because we save people lots of money," Baldanza said.

During the 2010s, Spirit and Frontier increased their market share relative to legacy airlines. Over the same period, Delta Air Lines and other legacy carriers introduced basic economy fares to compete more aggressively on price. Legacy airlines also adopted unbundling strategies similar to those used by budget carriers to offer lower headline ticket prices on online search engines.

Henry Harteveldt, an airline industry analyst, described the competitive pressure facing low-cost operators. "If one of our competitors cut their fares even by a dollar, we would lose those passengers to the other airline," Harteveldt said.