Adds context, details on debt

By Sabrina Valle

Feb 24 (Reuters) - U.S. low-cost carrier Spirit Airlines said on Tuesday it has reached an agreement with its lenders that will help it emerge from bankruptcy by late spring or early summer.

The airline's parent company, Spirit Aviation Holdings FLYYQ.PK, filed for bankruptcy for a second time in August, citing dwindling cash reserves and mounting losses.

The deal offers Spirit a clearer, though still challenging, path toward survival after months of uncertainty, creditor infighting and failed merger and acquisition overtures. The carrier has been racing to secure liquidity and shed costs to rule out a liquidation scenario that its pilots’ union warned could erase South Florida’s largest airline.

Spirit told the bankruptcy court it expects to emerge as a leaner airline focused on routes and periods of strongest demand, with further cuts to high‑cost aircraft leases and improved utilization of its remaining Airbus AIR.PA fleet.

The company projects its total debt and lease obligations will shrink from $7.4 billion before the filing to roughly $2.1 billion post‑emergence.

The deal could raise hopes Spirit finds a way out through an acquisition. Spirit had previously drawn interest from Frontier Group ULCC.O, though it did not result in a viable deal.

The latest restructuring agreement could still allow the carrier to consider "potential future industry transactions" once it stabilizes, said Spirit’s lawyer, Marshall Huebner of law firm Davis Polk, at a Tuesday hearing.

Spirit said it will tighten its network around higher‑demand periods, boosting aircraft use on peak days while scaling back off‑peak flying and adjusting capacity to seasonal swings.

It also plans to broaden its premium seating options, including Spirit First and Premium Economy, and enhance its Free Spirit and co‑brand loyalty programs to drive repeat business while preserving its low‑fare positioning.

Spirit’s troubles are in part due to a tougher environment for discount airlines: excess capacity, tepid leisure travel demand and fare pressure intensified by legacy carriers flooding the market with low‑fare seats.

(Reporting by Sabrina Valle in New York and Shivansh Tiwary in Bengaluru; Editing by Shinjini Ganguli and Chris Reese)

((Shivansh.Tiwary@thomsonreuters.com; +91 9708363192; X: @Shivansh_19_;))