Published by Global Banking & Finance Review®
Posted on August 22, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleMoody's downgraded Spirit Airlines' credit rating deeper into junk status due to high cash burn and financial challenges, following a similar downgrade by Fitch.
By Matt Tracy
(Reuters) -U.S. airline operator Spirit Airlines took another hit to its credit rating on Friday after Moody's Ratings downgraded it two notches deeper into junk territory.
In a report accompanying the downgrade on Friday, analysts from the ratings agency highlighted Dania Beach, Florida-based Spirit's "higher than expected cash burn" compared to its previous forecast when Spirit emerged from bankruptcy in March.
"We forecast Spirit will burn more than $500 million of cash in 2025 due to weak domestic leisure demand, elevated domestic capacity and a challenging pricing environment," the analysts wrote.
The downgrade follows a similar ratings hit last week from Fitch Ratings, which cited a high likelihood of near-term default in its own one-notch downgrade.
Moody's and Fitch's ratings actions follow Spirit's public warning last week after its quarterly earnings report about "going concern" risks facing the company, just months after the carrier emerged from bankruptcy.
Analysts at Moody's noted on Friday how Spirit had just $408 million in unrestricted cash at the end of the second quarter and how it had fully tapped out its $275 million revolver, which matures in March 2028.
(Reporting by Matt Tracy; Editing by Mark Porter)
A credit rating is an assessment of the creditworthiness of a borrower, indicating the likelihood of default on debt obligations.
Cash burn refers to the rate at which a company uses up its cash reserves to cover expenses, often measured over a specific period.
Debt instruments are financial assets that represent a loan made by an investor to a borrower, typically including bonds and notes.
Explore more articles in the Finance category
