For an airline, Spirit has trouble staying airborne. After the Biden administration blocked JetBlue’sJBLU

buyout just months post-bankruptcy, the low-cost pioneer has “substantial doubt” it can operate beyond 12 months. Desperately needing cash, the crunch comes amid signs of recovery in the travel industry.

• Spirit has lagged the performance thresholds required by creditors, so it faces default without fresh capital — with even its payment processor demanding more collateral.
• To cut costs, the airline will furlough ~270 pilots, and demote 140 more — while also selling off aircraft, real estate, and airport gates to raise funds.

Crash landing: Spirit says elevated US capacity and weak leisure demand have squeezed revenues, creating a challenging pricing backdrop. As such, it’s testing upscale offerings to court higher-yield customers, a lane where Delta’sDAL

premium sales rose 5% and AmexAXP

spending hit records, signaling affluent demand remains resilient. Plus, the growth displayed by aviation suppliers like BoeingBA

and GE Aerospace’s ($GE) shows that commercial airlines are investing in capacity. In short, the skies are busy, just not where Spirit flies.