Spirit Airlines is gearing up to shrink to a tiny version of its former self, focusing on high-demand travel periods and routes as well as expanding premium-class seats in an attempt to survive, according to a new plan it unveiled in U.S. Bankruptcy Court on Tuesday.

Much of the airline’s focus will be on flying to destinations from its major Florida airports, Fort Lauderdale and Orlando, as well as from the New York area and Detroit, CEO Dave Davis told CNBC.

Flights that don’t touch those airports “will be an even smaller part of the network,” Davis said.

He declined to specify which routes could be cut, but noted high competition on cross-country flights, as well as some weakness in demand for visiting friends and relatives, a key segment of air travel, in Latin America. He said some Latin American flying would likely be trimmed but that the region would still be important to Spirit.

The airline will also focus more on peak travel days and will cut money-losing flights on Tuesdays and Wednesdays, Davis said.

The budget travel icon said it will get rid of even more of its Airbus fleet as it plans to exit its second bankruptcy in less than a year. It expects to emerge in late spring or early summer, Spirit’s lawyer, Marshall Huebner of Davis Polk, said at a hearing Tuesday.

Spirit said the changes will make the airline leaner and more competitive.

The company said under the plan it estimates it will have reduced costs and said its debt and lease obligations will be cut from $7.4 billion to $2.1 billion after this bankruptcy.

Spirit has reached an agreement in principle with its creditors for the plan, Huebner said, adding that secured lenders will make “material incremental liquidity available to Spirit via the release of cash collateral.”

Spirit will rework its network and schedules to increase aircraft utilization during high-demand periods and on popular routes and to lower use during travel lulls. The carrier also plans to expand its Spirit First and premium economy, as well as update its loyalty program.

Davis told CNBC that the airline is planning to roll out premium economy seating across the fleet and is considering adding a third row of its top-cabin product, the so-called “Big Front Seat.”

The new fleet would be made up of mostly older Airbus planes, “with the potential rejection of additional high cost NEO aircraft,” Huebner said, referring to the more modern Airbus A320 family of planes, adding that the exact size of Spirit’s fleet will depend on talks with counterparts like aircraft lessors.

He said Spirit’s annualized fleet cost would be cut another $550 million, down 65% from before its bankruptcy filing last year. The debtors have also eyed another $300 million in cost savings from nonfleet cuts, he said.

Spirit has already reduced some of its Airbus fleet and furloughed pilots and flight attendants to cut costs as it reduced its network, though some cabin crew members were called back to work ahead of spring break.

Davis acknowledged that attrition has depleted some staffing levels and said it is too early to tell whether the carrier will have to reduce staff to meet its new fleet footprint.

In its second bankruptcy, Spirit had held deal talks with Frontier Airlines, and with investment firm Castlelake. Nothing materialized, but Huebner hinted a combination could be back on the table.

“This emergence will allow Spirit to do many things from a position of strength and stability, including to consider potential future industry transactions,” Huebner said.

Davis said that more consolidation among low-cost airlines “makes sense” but added that “if we build a sustainably profitable entity here, we’ll have a lot of options in front of us.”

Spirit’s path will be challenging. It would pit a smaller version of Spirit against ever-larger competitors that dominate the U.S. market.

Some U.S. budget carriers have struggled due to a surge in labor and other costs post-Covid as well as a growing consumer shift in favor of more upscale travel, among other things.

“Because every single day counts, and every single dollar counts, the airline industry is just as competitive today with this deal in hand as it was last Friday, and we must — and will — lock down what we need from other stakeholders and then begin a high speed march to get this storied company out of Chapter 11 at the earliest possible date so that it can write its next chapters from a position of strength,” Huebner said. 

Spirit was uniquely challenged by a massive engine recall from Pratt & Whitney and a failed plan to get acquired by JetBlue Airways, a deal knocked down by a federal judge in early 2024.

Spirit forecast it would generate a net profit of $252 million last year, according to a court filing in December 2024. But it said in an August report that it lost nearly $257 million in a matter of months stretching from March 13, after it exited its first Chapter 11 bankruptcy, through the end of June. It filed for Chapter 11 bankruptcy protection again less than a month later.

Another challenge for Spirit is that large U.S. airlines like American Airlines, Delta Air Lines, and United Airlines have launched their own no-frills basic economy fares that look more like Spirit’s model, though they were attached to larger carriers.

Davis said Spirit still plays “an extremely important role” in the industry, though some competitors have prepared for the airline to shrink, if not cease operations entirely, adding flights on routes Spirit had abandoned.

“The reason fares are low, the reason basic economy fares are low on our legacy competitors, is because airlines like us exist,” he said. “If we didn’t exist, fares … would be substantially higher than they are right now, I can guarantee you.”

American travel companies are scrambling to reroute cruise ships and take care of tourists to Mexico after violence and chaos erupted in several coastal regions in the country following the killing of a cartel leader.

The U.S. State Department broadened its warning to travelers to shelter in place across multiple regions of Mexico, including the popular tourist hot spots of Cancun, Playa del Carmen, Cozumel, Tulum, Tijuana and Puerto Vallarta.

Violence erupted after the Mexican army killed Jalisco New Generation Cartel leader Nemesio Rubén Oseguera Cervantes. Known as “El Mencho,” he led one of fastest-growing criminal networks in Mexico, notorious for trafficking fentanyl, methamphetamine and cocaine to the United States and staging brazen attacks against government officials who challenged it, The Associated Press reported.

As roads were blockaded with burning vehicles, airlines canceled flights and cruise lines rerouted ships to avoid ports with potential problems.

Carnival Corp. said Princess Cruises’ Royal Princess and Holland America Line’s Zuiderdam were bypassing their planned stops in Puerto Vallarta on Monday. Norwegian Cruise Line said its ship the Norwegian Bliss has canceled its plans to call on Puerto Vallarta on Wednesday.

MSC Cruises USA said sailings to Cozumel and Costa Maya, Mexico, are currently operating as planned, but that shore excursions may be adjusted or canceled.

Though Royal Caribbean said it doesn’t have ships currently in the affected areas, CNBC has learned some of its excursions in Ensenada, Mexico, were affected.

Airbnb told CNBC it had activated its “major disruptive events policy” in Jalisco state and other affected regions. That policy overrides the host’s individual cancellation policy, allowing travelers and hosts to cancel reservations without consequences.

“We are monitoring this situation carefully and are focused on supporting guests and hosts in impacted areas,” an Airbnb spokesperson said.

In a note to investors, Truist travel and leisure analyst Patrick Scholes wrote that Hyatt has the most exposure of the international brands, with 8.5% of its room total coming from Mexico. Marriott has the second-highest exposure, with 3.3% of its overall rooms coming from Mexico.

Typical travel insurance policies often carry exclusions for terrorism, political violence or civil unrest.

Squaremouth, an online marketplace for travel insurance, warned would-be travelers that “the violence in Mexico is now a foreseeable event, or what the insurance industry calls a known event. So tourists can’t buy coverage now in order to cancel their trip.”

However, a Squaremouth spokesperson told CNBC, “If you are heading to Mexico soon, especially during spring break, buying CFAR [cancel for any reason] or IFAR [interruption for any reason] as add-ons is a smart decision given the uncertainty.”

A powerful blizzard ground air travel to a near halt at major airports serving New York City, Boston, Philadelphia and other areas of the eastern U.S. on Monday. Disruptions are set to last through at least Tuesday, again testing carriers on how quickly they can recover at the tail end of winter break.

Much of the East Coast from Maryland to Maine was under a blizzard warning, with heavy snow already totaling nearly 2 feet in parts of New Jersey and on Long Island, New York. High wind gusts are expected to last throughout the day, the National Weather Service said. The weather service warned that travel will be treacherous, with blowing snow causing low visibility.

More than 4,900 U.S. departures Monday, or close to 20% of the total scheduled U.S. departures, were canceled, as of 4:10 p.m. ET, according to aviation data firm Cirium. Daily cancellations usually run around 1% of the day’s schedule. Nearly a quarter of the inbound international flights were also canceled.

More than 1,000 departures and arrivals in and out of New York’s LaGuardia Airport, more than 90% of the day’s schedule, were canceled Monday. More than 90% of the flights at Boston Logan International Airport and more than 80% of the flights at Philadelphia International Airport and Newark Liberty International Airport in New Jersey were also scrubbed.

On Tuesday, 1,576 flights had already been canceled, around 7% of the daily schedule, Cirium said. Around half of the departures at Kennedy Airport, LaGuardia and Boston were canceled for Tuesday.

American Airlines said operations at the those three airports are set to resume on Tuesday, adding that flights have already resumed at Philadelphia and Ronald Reagan Washington National Airport.

Airlines routinely cancel flights ahead of major storms to avoid having aircraft and crews out of place and to make it easier to restart operations after the storm passes.

American, Delta Air Lines, JetBlue Airways, Spirit Airlines and United Airlines waived fees and fare differences for passengers if they can travel later this week, though some flexible rebooking policies are in place until March 4. Southwest Airlines said customers are eligible for a change without paying a difference in fare if they can rebook to fly or fly standby within two weeks.

The winter storm that hit much of the East Coast in January and was followed by bitter cold caused mass travel disruptions across a large swath of the U.S.

American had struggled to recover, drawing harsh criticism from flight crews, some of whom were stranded and had to sleep at airports, heightening tension between front-line employees and the company’s CEO, Robert Isom.

The storm cost American between $150 million and $200 million in revenue, the carrier said last month on an earnings call.

Uber said it’s acquiring SpotHero, a company that provides a parking reservation app for crowded downtowns, sporting events and concerts.

Terms weren’t disclosed, but Uber said on Monday that it plans to offer a “parking reservation experience, powered by SpotHero” within its own app to help users find parking for events, venues and airports.

“For the moments when people do choose to drive, SpotHero on the Uber app will make the experience easier than ever, and bring more people into the Uber ecosystem,” Uber CEO Dara Khosrowshahi said in a statement.

Earlier this month, Uber reported better-than-expected revenue for the fourth-quarter but issued soft profit guidance for the current period, sending the stock down. The company’s strongest revenue growth for the quarter was in its delivery business, which started with restaurants and now includes groceries and retail.

Uber’s expansion into new markets and geographies has turned into the dominant U.S. ride-hailing company. Its market cap currently sits at $146 billion, while Lyft is valued at just over $5 billion. Within food delivery, Uber faces stout competition from companies including DoorDash, which has a market cap of over $71 billion.

SpotHero last announced outside funding in 2019, when it raised $50 million in a round led by Macquarie Capital. The Chicago-based company launched in 2011, and now says it offers parking at more than 13,000 garages, lots and valets in over 400 cities in the U.S. and Canada.

“Joining forces with Uber will allow us to bring that experience to millions more drivers and make parking a natural part of the Uber platform,” SpotHero CEO Mark Lawrence said in a statement.

Uber said the acquisition is subject to regulatory approval and is expected to close in the first half of this year.

WATCH: Uber CEO Dara Khosrowshahi on Q4 results: All metrics of the business continue to be very strong