* Spirit entered bankruptcy in August with 214 aircraft

* Low-cost carrier has been seeking potential buyers

* Spirit hopes to emerge from bankruptcy by June

(Adds details from paragraph 2 onward)

By Sabrina Valle, Doyinsola Oladipo and Dietrich Knauth

March 13 (Reuters) - Spirit Aviation Holdings ( FLYYQ )

, the parent company of Spirit Airlines, said on

Friday it plans to shrink its fleet to about one-third of its

pre-bankruptcy size, according to a court filing.

The low-cost carrier, which has been marketing aircraft and

sounding out potential buyers, is pressing ahead with a deep

restructuring aimed at cutting costs and stabilizing its

finances after filing for bankruptcy twice within a year.

Spirit entered Chapter 11 protection in August last year

with 214 aircraft, then moved to cut roughly 100 aircraft in

October through lease rejections and retirements.

Earlier this week, a U.S. bankruptcy judge approved Spirit's

request to launch an auction process for roughly 20 additional

aircraft, from the 114 planes the airline currently operates.

Friday's announcement further advances its fleet-cutting plans.

"We are pleased to achieve another milestone that reflects

the confidence our lenders and noteholders have in our future,

with our plan better positioning Spirit to continue delivering

value to American consumers," said Dave Davis, president and

chief executive officer, in a statement.

Spirit said on Friday it intends to further reduce its fleet

to 76 to 80 aircraft by the third quarter of 2026, primarily

consisting of Airbus A320 and A321ceo jets, according to the

filing.

Under the proposed restructuring, Spirit's debt and lease

obligations are expected to be reduced to about $2 billion from

$7.4 billion before the filing.

The carrier warned on a hearing on Wednesday that volatility

in fuel prices linked to the war involving Iran has complicated

negotiations over its exit from Chapter 11.

The airline filed a restructuring support agreement and

proposed plan of reorganization with the U.S. Bankruptcy Court

for the Southern District of New York.

On Wednesday, U.S. Bankruptcy Judge Sean Lane cleared Spirit

to move forward with bidding procedures that includes CSDS Asset

Management as a "stalking-horse" bidder, setting a floor price

of about $530 million and allowing other potential buyers to

submit higher offers by April 20.

During the hearing, Spirit's lawyer, Marshall Huebner of

Davis Polk & Wardwell, said negotiations have taken longer than

expected in part because fuel costs - a major expense for

airlines - have become harder to forecast amid geopolitical

uncertainty linked to the Iran war. That volatility, he said,

has raised questions among creditors about Spirit's projected

liquidity and cash-flow assumptions.

Judge Lane said those concerns were understandable, noting

that airlines are particularly exposed to swings in fuel prices

driven by global events.

"Global uncertainty regarding fuel is just a fact of life

for any airline," Lane said.

Spirit is targeting confirmation of a Chapter 11 bankruptcy

plan by the end of May or possibly June, Huebner said.

The airline said it will focus on its strongest routes and

markets, including Fort Lauderdale, Orlando, Detroit and the New

York City area.

Spirit also said it expects to add aircraft between 2027 and

2030, tied to profitable growth opportunities, and plans to

expand its Spirit First and Premium Economy products, continuing

the rollout of premium economy seating across its fleet.