Spirit Airlines is gearing up to shrink to a tiny version of its former self in an attempt to survive, according to a new plan it unveiled in U.S. Bankruptcy Court on Tuesday.

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.

The airline 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.”

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.

Spirit’s 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 non-fleet 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.

“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’s new plan 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, a growing consumer shift in favor of more upscale travel and increased competition from larger airlines that offer stripped down fares.

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.

Novo Nordisk on Tuesday said it plans to slash the monthly list prices of its popular obesity and diabetes drugs in the U.S. by up to 50% starting in 2027, in a bid to make the treatments more accessible to patients with insurance coverage. 

The obesity injection Wegovy, its new pill counterpart, the diabetes shot Ozempic and the oral diabetes drug Rybelsus will have a new lower list price of $675 per month starting on Jan. 1, 2027. The Wegovy medicines both currently have list prices of around $1,350 per month, while the diabetes drugs have list prices of around $1,027 per month.

For the first time, Novo said its price cuts are targeting insured patients whose out-of-pocket costs are linked to list prices, such as people with high-deductible health plans or co-insurance benefit designs.

“Both of these patient populations should, beginning [in 2027], see a benefit with lower out-of-pocket burdens,” Jamey Millar, the company’s head of U.S. operations, told CNBC in an interview.

He added that Novo expects improvements in access and uptake among patients in the commercial insurance market, though the company is not giving any specific expectations.

The move could help Novo compete better with Eli Lilly, which now holds the majority share in the blockbuster GLP-1 market. Lilly’s more effective drugs and earlier foray into the direct-to-consumer space have allowed it to take the lead in the space, but the company has yet to significantly lower the U.S. list prices of its medicines.

It’s unclear exactly how much commercial insured patients typically pay out of pocket for Novo’s drugs. Those patients may pay as little as $25 per month for Novo’s drugs in “only the best of circumstances,” Millar said.

But patients in high-deductible plans would have to pay out-of-pocket “more or less the full list price of a drug until they reach that” threshold and the insurance benefit kicks in, he added. Millar said some of those patients defer treatment entirely because they don’t want to shoulder that expense. The number of patients using high-deductible plans has increased over the years due to the trade-off of lower premiums, he noted.

Meanwhile, Millar said other people have 25% to 33% of their co-insurance linked to the list prices of those drugs.

The Danish drugmaker has previously cut the direct-to-consumer prices of Wegovy and Ozempic, which primarily benefit cash-paying patients who often don’t have insurance coverage for the drugs. 

Novo offers its drugs to cash-paying patients for $149 to $499 per month, depending on the specific product and dose. Novo and Lilly have escalated a GLP-1 pricing war over the last year, especially following the landmark “most favored nation” deals they struck with President Donald Trump in November.

The move also coincides with new, lower Medicare prices going into effect for Novo’s obesity and diabetes drugs in 2027 following negotiations with the federal government under the Inflation Reduction Act. The new negotiated prices for Wegovy, Ozempic and Rybelsus will be $274 per month.