Thank You, Next: Spirit in Buyout Talks with Investment Firm Castlelake

Spirit Airlines is reportedly in talks with investment firm Castlelake about a possible acquisition as the airline looks for a way forward amid bankruptcy and mounting financial pressure.

Sources familiar with the situation told CNBC that Spirit’s board and bondholders are assessing Castlelake’s interest in acquiring the struggling carrier.

Second bankruptcy in under a year

The airline filed for Chapter 11 bankruptcy in August 2025, marking its second filing in less than a year after a previous restructuring failed to create sustainable financial stability.

These challenges follow Spirit’s initial Chapter 11 filing in November 2024, which occurred after a blocked merger with JetBlue Airways.

Although Spirit emerged from the first bankruptcy in early 2025, financial pressures intensified later in the year, resulting in the second filing.

Throughout this period, Spirit has faced weak domestic travel demand, high lease and operating costs, and fleet and staffing challenges. Together, these pressures worsened Spirit’s liquidity situation and emphasized the need for a strategic solution.

Castlelake offers a new path

Castlelake is a Minneapolis-based investment firm that has been increasingly active in aviation finance.

Discussions with Castlelake provide Spirit with a fresh potential route to stability after recent merger talks with Frontier Airlines ended without a deal.

For more details, read our explainer on Spirit’s Chapter 11 journey or watch our latest in-depth video, which breaks down what led to Spirit’s bankruptcy and how other low-cost airlines avoided this path.

Photo by Ankush Kesri on Unsplash