The airline's woes deepened after the collapse of its $3.8 billion planned merger with JetBlue Airways (JBLU.O) in January and the impact of RTX's (RTX.N) Pratt & Whitney Geared Turbofan (GTF) engines snag that has grounded many of its aircraft.
Spirit, recognized for its bright yellow livery, had been losing money despite strong travel demand, as it struggled with bloated costs.
The airline has entered into an agreement with its bondholders that is expected to reduce total debt and provide increased financial flexibility, it said on Monday.
Spirit started out as a long-haul trucking company in 1964 before shifting to aviation around 1983. It offered leisure packages to popular destinations under the name Charter One Airlines and rebranded to Spirit in 1992.
The discount carrier became popular with budget-conscious customers willing to forego amenities like checked bags and seat assignments.
Ultra-low-cost carriers, which excelled at keeping their expenses low and offering affordable, no-frills travel, have struggled since the pandemic as travelers prefer to pay extra for a more comfortable journey as they pursue experiences.
Spirit's troubles, along with those at some of its rival budget carriers, have spurred talks of a flawed business model among some Wall Street analysts.
